Alaska and Hawaii Delegations Seek Medicare Reimbursement Flexibility for Rural Hospitals

WASHINGTON—U.S. Senators Dan Sullivan and Lisa Murkowski (both R-Alaska), and Senators Brian Schatz and Mazie Hirono (both D-Hawaii), introduced legislation this week to increase the amount that hospitals in Alaska and Hawaii can be reimbursed by Medicare to perform outpatient procedures for enrolled seniors. Historically, rural states have faced significant cost disparities for Medicare reimbursement that drive up costs for both hospitals and patients. This legislation would recognize the unique cost-of-living challenges that hospitals in Alaska and Hawaii face, and would increase reimbursement for ultra-rural hospitals to ensure that they can continue to serve seniors in rural locations.

The legislation follows a letter sent to the Department of Health and Human Services by Senators Sullivan and Murkowski requesting more reimbursement-rate flexibility for Medicare inpatient procedures in Alaska and Hawaii.

“The federal government’s one-size-fits-all Medicare formulas are simply not working for rural states—a challenge that has saddled health care providers and senior citizens in Alaska with outrageous costs relative to other states,” Senator Sullivan said. “Without flexibility in these formulas, hospitals across Alaska are struggling to maintain the level of care our seniors deserve. Our priority must be ensuring seniors on Medicare across the state can continue to access the inpatient and outpatient health services they rely on.”

“Medicare formulas continue to fall short in addressing the challenges that rural states face. Alaska’s health care system relies on health care facilities to provide care in some of the most remote locations, contributing to increases in cost of care,” said Senator Murkowski. “This legislation will offer greater flexibility for these Medicare formulas, so our facilities can provide critical care to our seniors and rural Alaskans.”

“To make sure hospitals in communities across Hawaii can continue to serve the seniors that rely on them, Medicare must recognize the real cost of providing health care in our state,” said Senator Schatz. “Our bill will help boost reimbursements to providers in Hawaii and make sure seniors have access to the health care services they deserve.”

“Hawaii’s unique geography and high cost of living makes accessing and providing health care more difficult, which is why hospitals in Hawaii have long received higher Medicare reimbursement for inpatient care than those in other states,” said Senator Hirono. “This bill would similarly raise outpatient Medicare reimbursements in Hawaii, helping to ensure our hospitals—especially on neighbor islands—have the resources they need to provide outpatient care for our communities.”

The corresponding letter can be found here