Schumer Demands Orange And Dutchess County Hospitals Be Included In Hospital Reclassification Deal Announced Today

In light of todays announcement that Senate leaders will pursue an extension of Section 508 of the Medicare Modernization Act, U.S. Senator Charles E. Schumer, a member of the Senate Finance Committee, pledged today to work to include all New York Section 508 hospitals. This morning, the Chair of the Senate Finance Committee, Charles Grassley (RIA) announced in Pennsylvania his intentions to extend Section 508, which includes language that provided millions of dollars to Northern Dutchess Hospital in Dutchess County, and Bon Secours Community Hospital, Orange Regional Medical Center, St. Anthony Community Hospital and St. Lukes Cornwall Hospital in Orange County.

We are by no means out of the woods yet, but this is a good indication of great progress being made, Schumer said. I will be fighting tooth and nail to make sure they understand the devastating impact on hospitals in Orange and Dutchess Counties if they were left out.

Hospitals are paid by Medicare in a complicated formula, one factor of which is determined by the location of the hospital. Hospitals get paid more if they are considered to be in more expensive labor markets (called MSAs) that must offer higher salaries to attract nurses and other staff.

According to Medicare, Orange and Dutchess County hospitals should get paid less than hospitals in New York City. However, since staff who work in Orange and Dutchess County could also easily commute to New York City, the hospitals staffing costs are often higher than Medicares MSA system is able to recognize.

In 2003, Congress passed the Medicare Modernization Act, which contained the Medicare prescription drug benefit among many other provisions. Section 508 of this law provided onetime hospital reclassifications to move Orange and Dutchess County hospitals into the higherpaying New York City and Long Island MSAs. Section 508 will expire at the end of March, 2007, which will drop the hospitals down to their natural funding levels and cost them millions of dollars.

Schumer today said he will work with Grassley on a number of other hospital reclassification issues for New York State. For example, St. Francis Hospital and Vassar Brothers Medical Center currently receive money from the fund established by Section 508, but only began to receive it after it was noted that they had been accidentally left out of the Medicare regulations implementing the 2003 law. Any extension of Section 508 will need to be carefully worded to make sure that St. Francis and Vassar Brothers are successfully included this time.

St. Lukes Cornwall is helped greatly by Section 508, but still needs additional help. St. Lukes Cornwall was reclassified into the Long Island MSA under Section 508, while the other Orange County hospitals were all put into the higherpaying New York City MSA. Although St. Lukes Cornwall receives more currently than it would without Section 508, Senator Schumer is working to bring it to parity with the other Orange County hospitals.