Sen. Grassley seeks funding extension for hospitals to ensure Medicare reimbursements reflect local wages

Senate Finance Committee Chair Chuck Grassley (R-Iowa) on Friday said that during the lame-duck session of Congress he will seek a six-month extension of a provision -- Section 508 of the 2003 Medicare law -- that allows reclassification of certain hospitals into different geographic regions for the application of the wage index to receive higher reimbursements, CQ HealthBeat reports (Reichard, CQ HealthBeat, 10/20).

The provision, which affects 120 hospitals, will expire in March 2007 (CongressDaily, 10/20).

Grassley said, "Medicare hospital payments need to adequately account for differences in wages so that hospitals are able to obtain staffing in a competitive workforce environment."

According to Grassley spokesperson Jill Kozeny, the extension would allow Congress to consider revisions to the Medicare wage index proposed by the Medicare Payment Advisory Commission. She added that the extension would cost less than $100 million.

Grassley said that he would seek the extension as part of a Medicare package that Congress might consider during the lame-duck session scheduled to begin on Nov. 13.

A Grassley aide said that negotiations on the Medicare package have begun between House and Senate staff (CQ HealthBeat, 10/20).