Jackson County, Ala. - U.S. Rep. Bud Cramer (D-Ala.) held a press conference today at the Jackson County Hospital to discuss the 2003 House Medicare Bill and the benefits it will bring to Alabama hospitals.  The House of Representatives passed the Medicare bill, H.R. 1, on June 27, 2003.

"I am pleased to report that Congress has passed this legislation that will result in increased Medicare payments for Alabama hospitals," said Cramer.  "This bill corrects a Medicare provision called the wage index that is unfair to Alabama hospitals.  Rural and small hospitals in North Alabama form the backbone of our healthcare system in Alabama and our seniors and families need these facilities.  But because of the way the Medicare program was structured, they were losing money every day."

Under the old Medicare formula, hospitals in some parts of the country are paid twice as much as hospitals in Alabama for the same procedures.  The Medicare bill that passed the House would put Alabama hospitals in line with other hospitals across the country.  Through this bill, the Jackson County Hospital would receive over $2.3 million over the next ten years.  The total 10-year impact for all Alabama hospitals would be nearly $500 million.

The formula used to calculate Medicare payments to hospitals relied heavily on the personnel costs of hospitals.  While non-labor related costs like supplies and equipment are similar nationwide, labor-related costs are different in rural areas and small cities.  States like Alabama have a lower cost of living than other parts of the country, which means that hospitals in Alabama received lower Medicare payments than hospitals in more populous states for the same services under the old formula. 

Cramer added, "Not only does the old formula punish Alabama hospitals by paying them less for the same services, but it also puts them at a disadvantage when they compete to bring doctors and nurses to work in these hospitals.  I'm pleased that we have taken this first step toward addressing Medicare payment inequities in order to ensure that our hospitals can continue offering quality healthcare services in their communities."