[Congressional Record Volume 148, Number 92 (Wednesday, July 10, 2002)]
[Senate]
[Pages S6568-S6569]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      LOW MEDICARE REIMBURSEMENTS

  Mr. SPECTER. Madam President, I submit for the Congressional Record 
several additional supporting documents regarding Medicare Metropolitan 
Statistical Areas referenced in my statement on Monday, July 8, 2002.
  I therefore ask unanimous consent that the additional documents be 
printed in today's Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                      Berwick Hospital Center,

                                        Berwick, PA, July 3, 2002.
     Senator Arlen Specter,
     Scranton District Office,
     Scranton, PA.
       Dear Senator Specter: I am writing to reiterate our support 
     for the proposed increase in Medicare Reimbursement Rates for 
     hospitals in Northeastern Pennsylvania. The proposed increase 
     would mean an additional $800,000 in increased annual 
     reimbursement to Berwick Hospital Center.
       This increase, if granted, would go directly for training 
     and recruiting health care personnel who are in critically 
     short supply in our area. The hospital currently has 19 
     registered nurse and 6 licensed practical nurse vacancies. In 
     addition, there are 10 vacancies in the support departments, 
     such as laboratory and radiology. A significant factor in 
     these vacancies is the higher wages and benefits that are 
     paid in the Philadelphia and New York metropolitan areas that 
     are within a 2.5 hour drive from our hospital. Our hospital 
     cannot afford to match these urban wages due to the disparity 
     in our Medicare Reimbursement levels.
       As such, the proposed increase in Medicare Reimbursement is 
     critical to stop the out-migration of skilled health care 
     workers from our area. Since the average age of nurses in our 
     state is now approaching 45, in the next decade when the Baby 
     Boomer generation reaches retirement age, there will be no 
     nurses and other support personnel to take care of their 
     medical needs in our community. A concerned effort to improve 
     educational opportunities for high school graduates, as well 
     as improved wages for existing workers is needed.
       Finally, I would urge the Congress to take immediate action 
     on this issue. It will take years to reverse the current 
     trend, through support of new educational programs, and other 
     programs to retain the existing workforce. Postponing a 
     decision will make the current crisis worsen to the point 
     where the health care delivery system in our community will 
     not function.
                                  ____



                                    Marian Community Hospital,

                                     Carbondale, PA, July 8, 2002.
     Hon. Arlen Specter,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Specter: On behalf of Marian Community 
     Hospital, its Board of Directors, and the greater Carbondale 
     area community, which we serve, we thank you for the efforts 
     that you, Representative Sherwood and your respective staffs 
     have committed to addressing the disparity caused by the 
     Medicare wage index.
       We know that you are keenly aware of the challenges facing 
     the hospitals in our region but we would like to share with 
     you the following points that were communicated to our Board 
     of Directors through our current operating budget:
       Over half of the Hospital's healthcare service and 
     activities are provided to patients who are poor and elderly. 
     The reimbursement received from the federal government for 
     services provided to these patients under the Medicaid and 
     Medicare programs are not sufficient to cover the cost of 
     care (approximately 55% of the hospital's costs is for 
     salaries and fringe benefits).
       For the fourth year in a row, revenues from operations have 
     not been or expect to be adequate to cover the cost of 
     providing care and, accordingly, savings intended for 
     building and equipment replacement were used to cover the 
     unreimbursed costs (Pennsylvania Cost Containment Council 
     indicates these losses are consistent for those hospitals 
     residing in Northeastern Pennsylvania).

[[Page S6569]]

       The Hospital has been faced with a health professional 
     shortage requiring the payment for caregiver services through 
     overtime and use of temporary agencies at a level much 
     greater than anticipated. (Even when staff becomes available, 
     we have been forced to pay higher hourly rates to attract 
     health professionals to the Carbondale area.)
       This past spring, the Hospital's provider of professional 
     and general liability insurance (PHICO) become insolvent 
     requiring the use of expensive alternatives and financial 
     resources that were not planned until a solution could be 
     formulated with other Pennsylvania hospitals in a like 
     situation.
       Capital expenditures and replacement of medical equipment 
     in the current fiscal year will need to be reprioritized 
     until relief from unreimbursed costs can be resolved.
       Thank you again for your interest in our Hospital and in 
     the Northeast region of Pennsylvania. We are prepared to 
     participate in any way in hearings with your Committee to 
     resolve this crises.
           Respectfully yours,
                                                  Thomas L. Heron,
                                          Chief Financial Officer.
                                 ______
                                 


                                      Tyler Memorial Hospital,

                                    Tunkhannock, PA, July 8, 2002.
       Below please find a history of our hospital's reimbursement 
     rate under Medicare's prospective payment system:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                          Consumer price
                                               Labor        Wage index    Adjusted labor     Non-labor      Actual base      Increase          index
                                             component                                       component         rate          (percent)       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1998....................................       $2,732.26          0.8539       $2,333.08       $1,110.58       $3,443.66  ..............  ..............
1999....................................        2,739.36          0.8683        2,378.59        1,113.47        3,492.06            1.41            1.70
2000....................................        2,764.70          0.8524        2,356.63        1,123.76        3,480.39           -0.33            1.60
2001....................................        2,818.85          0.8578        2,418.01        1,145.78        3,563.79            2.40            2.70
2002....................................        2,908.65          0.8683        2,525.58        1,182.27        3,707.85            4.04            3.40
--------------------------------------------------------------------------------------------------------------------------------------------------------

       As you can see, in three of the last four years, our 
     increase in payment has fallen short of the increase in the 
     consumer price index. In 2000, our base payment rate actually 
     decreased because of a reduction in the wage index.
       With increases in our payments that do not surpass the 
     rising cost of healthcare, the hospital is put in a position 
     where, in order to staff the lone hospital within a 45-mile 
     radius, it must tap into its own cash reserves that were 
     earmarked for improved capital equipment.
       It's imperative that the wage index be increased to allow 
     the patients that we serve get the equipment and the care 
     that they deserve. Without that increase, it's only a matter 
     of time before the hospital's own cash reserves are depleted.
       In negotiating with an HMO, the hospital can bargain to 
     receive higher payments; with federal or state insurance, the 
     hospital has to take what is offered. Congress should do its 
     best to make sure that the payment it offers is a fair one.

                          ____________________