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Home News Region/State Yager: 'Fundamentally flawed' wage index has played role in hospital closures

Yager: ‘Fundamentally flawed’ wage index has played role in hospital closures

NASHVILLE — Senate Republican Caucus Chairman Ken Yager, R-Kingston, has called for adoption of a proposed rule pending before the Centers for Medicare & Medicaid Services (CMS) to help rural hospitals receive a fairer reimbursement rate for health care services by changing the Area Wage Index (AWI) formula.

Yager, who represents Scott County and the 12th Senatorial District, submitted a letter to Medicaid Services Administrator Seema Verma, pointing out that all 95 counties in Tennessee currently fall among the very lowest reimbursement rates in the U.S. and that the proposed rule offers a lifeline for hospitals throughout the state.

Yager’s letter, which was an official response to a public comment period on the CMS proposal, came as one of the hospitals in his district, Jamestown Regional Medical Center, closed its doors. The hospital’s parent company, Rennova Health, said the closure was temporary.

Earlier this year, Yager co-sponsored Senate Joint Resolution 98, passed by the Tennessee General Assembly to urge CMS to revise its wage index formula.

“The wage index has created a challenging environment that has negatively impacted the health care system in Tennessee,” Yager wrote. “The fundamentally flawed wage index has played a key role in hospital closures in Tennessee. Without the relief CMS has proposed, Tennessee hospitals will continue to suffer and more may be forced to close their doors to the many Tennesseans who need care.”

Yager said that federal rules and regulations put into place in recent years have put the state’s rural hospitals at a disadvantage.

“They are being discriminated against through the way Medicare is being reimbursed,” he said. “I strongly support this rule change, which would be a tremendous shot in the arm to boost the viability of our hospitals, and was pleased to write a letter of support for reform. It would be a huge step forward in starting to level the playing field and ensuring the long-term viability of our health care network in Tennessee.”

Yager applauded work done by U.S. Senators Lamar Alexander, R-Tenn., and Marsha Blackburn, R-Tenn., as well as that of Congressman Chuck Fleischmann, R-Chattanooga, to bring the need for the wage index change to the attention of the Trump administration.

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“They have worked diligently to get this proposed rule change before CMS and we are very grateful for the tremendous effort that they have made to help our hospitals,” Yager said.

The new rule could take effect as soon as this fall, if adopted.

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Independent Herald
Contact the Independent Herald at newsroom@ihoneida.com. Follow us on Twitter, @indherald.
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