Clipboard: State’s Medicare windfall in jeopardy

A $250 million Medicare windfall for Massachusetts hospitals appears to be on the brink of expiring. The state’s congressional delegation is pushing to preserve the annual payments that critics have dubbed the “Bay State boondoggle,” Tracy Jan writes in today’s Globe:

“We’re all on high alert,” Representative Richard Neal, a Democrat from Springfield, said in an interview following the hourlong meeting during which he briefed the delegation about the impact of the House bill.

Neal said Massachusetts members would argue that the state’s hospitals are a national treasure and urge Congress “not to do anything in haste, because you jeopardize one of the crown jewels of the American medical system.”

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Massachusetts landed the money in an arrangement that sets a portion of Medicare payments based on wages paid at rural hospitals. Nantucket Cottage Hospital, where wages are high because of its location on a high-cost island, is the only facility in the state designated as a rural hospital.

Jan explained in a previous story that 21 states that lost money as a result of the arrangement—the payments come from a national pool of money that is capped—were campaigning to take the money back. She wrote in January:

“Here you have a small hospital on an island in the Atlantic Ocean basically setting the payments for all the hospitals in Massachusetts, and as a result, reducing the payments for hospitals all across the country,” said Herb Kuhn, president of the Missouri Hospital Association. “It’s unfair and unjustified.”

As a result, Kuhn said, Missouri hospitals lose $15.6 million a year. According to the most recent federal data available, states like Texas, New York, Michigan, Florida, and Illinois are the biggest losers, forfeiting tens of millions of dollars each year under the current system.

The Senate has already voted to end the payments, and a similar bill was introduced in the House this week.