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Reps. Gabbard, Case, and Young Introduce Bill to Give Medicare More Flexibility to Meet Local Needs

Washington, July 1, 2020

Washington, DC—Today, Reps. Tulsi Gabbard (HI-02), Ed Case (HI-01), and Don Young (AK-at large) introduced the Equitable Payments for Nursing Facilities Act, a bipartisan bill that would authorize the Secretary of the U.S. Department of Health and Human Services to make adjustments to payment rates for Skilled Nursing Facilities (SNFs) in Hawai‘i and Alaska under Medicare. The Secretary currently can do this for hospitals, but does not have the flexibility to make similar adjustments for SNFs which — like hospitals — must account for cost of living challenges in caring for patients.

Senators Brian Schatz (AK), Mazie Hirono (AK), Lisa Murkowski (AK), and Dan Sullivan (AK) will be introducing its identical, companion bill in the Senate.

“As Americans continue to live longer, many of our elderly will require long-term nursing care through skilled nursing facilities. These facilities need adequate resources to meet this need — especially in Hawai‘i, where the cost of living and providing care is so high. Nursing facilities serve some of our most vulnerable residents, and Medicare must account for the higher costs of providing this care. A one-size-fits-all payment approach that does not take into account the cost of living in states like ours and Alaska simply doesn’t work,” said Rep. Tulsi Gabbard. “This bill overcomes a barrier in the current law and gives HHS the flexibility it needs to make these adjustments to provide support that is more closely aligned to local costs.”

“Skilled nursing facilities are a critical component of our healthcare system, and the providers pour their hearts into caring for patients,” said Rep. Don Young. “Unfortunately, due to the high cost of living in Alaska and Hawaii, these facilities face increased operational difficulties. Workforce challenges further threaten the availability of care for those who need it, making this an urgent priority. I am proud to introduce the Equitable Payments for Nursing Facilities Act with my good friends Representatives Tulsi Gabbard and Ed Case to help ensure that our skilled nursing facilities have the support needed to continue delivering high-quality care.”

“For years, healthcare providers in Hawai‘i have struggled with ensuring access to and providing quality care, while having to deal with the mounting cost of doing business in an island state,” said Rep. Ed Case. “In my state, there are 48 skilled nursing facilities that, while considered to be on the front-lines dealing with the ongoing COVID-19 pandemic, are still having to face their own crisis with the ever increasing costs of building maintenance, supplies, equipment and labor.  We have long  recognized the dilemma health care providers face here in Hawai‘i — we should make the adjustments now so that people can continue to have the quality health care they need, especially in this era of COVID-19.”

The bill is supported by the Healthcare Association of Hawai‘i and the Alaska State Hospital and Nursing Home Association.

“This legislation is necessary to increase payment equity and provide sufficient resources for nursing facilities to continue providing high-quality care to residents in Hawai‘i. Skilled nursing facility providers continue to provide care to an increasingly vulnerable and medically complex population, but struggle with rates that fail to take into account the higher costs of living and doing business in this state,” said Hilton Raethel, the President and CEO of the Healthcare Association of Hawai‘i. “We appreciate this legislation because it takes into account the need for more equitable resources in Hawai‘i to ensure access to quality care.”

“Alaska and Hawai‘i are geographically unique compared to the rest of the U.S., so it is no surprise that our respective health care systems have access to care challenges that are incomprehensible elsewhere.  Modifying Medicare reimbursement for skilled nursing facilities to reflect cost-of-living adjustments is a simple, necessary step to support access to high-quality care in our states. We thank Alaska's Congressional Delegation for its partnership and leadership in bringing payment equity to those who care for our elderly and most vulnerable,” said Jared Kosin, President and CEO of the Alaska State Hospital and Nursing Home Association.

Background: The Centers for Medicare and Medicaid Services (CMS) has acknowledged that the costs to provide care in Hawai‘i and Alaska are significantly higher than their national counterparts, and provided a cost of living adjustment (COLA) to help Hawai‘i and Alaska hospitals contend with these higher costs.

Under current law, Section 1886 of the Social Security Act grants the CMS the authority to provide adjustments to payment amounts in consideration of the unique circumstances of hospitals located in Hawai‘i and Alaska — but this only is allowed for hospitals and inpatient psychiatric facilities, not skilled nursing facilities (SNFs).

The Equitable Payments for Nursing Facilities Act would authorize the Secretary of Health and Human Services to make adjustments to payment rates for SNFs in Hawai‘i and Alaska under Medicare, similar to current law for hospitals and inpatient rehabilitation facilities under Section 1886, creating parity. It would amend Section 1888(e)(4)(G) of the SSA (42 USC 1395yy(e)(4)(G)) to create parity between hospitals, inpatient rehabilitation facilities, and SNFs in Hawai‘i and Alaska.

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