Mending Medicare

Maine ranks 50th among the states, dead last, in Medicare reimbursement. This has long been a concern of the state’s hospitals, struggling to keep costs down and services available, of Gov. King, who is foming a coalition of other under-reimbursed states, of the congressional delegation, which is backing increased Medicare funding and changes in the funding formula.

These persistent expressions of concern are paying off. The Health Care Finance Authority, the federal agency that administers Medicare now is concerned as well. As the result of a meeting late last month organized by Sen. Susan Collins, HCFA chief Nancy-Ann Min DeParle agreed to work more closely with Maine’s 39 hospitals on improved reporting of the factors that determine reimbursement. More importantly, she agreed that the current formula has a distinct bias that adversely effects rural states and promised to work on correcting it.

The anti-rural bias is inadvertent but undeniable. Maine is reimbursed 80 cents for every Medicare dollar it spends. Vermont, in 49th place, get 84 cents. Among the rest of the bottom 10 are Iowa, South Dakota, Alaska, Wyoming and Montana. The top 10, states that get as much as $1.11 in federal reimbursement for every state dollar, include states with large urban centers — such as Maryland, Texas, Rhode Island, New York, Pennsylvania.

Yet the urban/rural disparity is not across the board. Ohio, the seventh most populous state in the country, is fourth from the bottom in Medicare reimbursement. Alabama and Arkansas, similar demographically to Maine, are at the high end. Clearly, urban/rural is a component, but not the entire picture.

Part of the problem is that the reimbursement formula has failed to keep up with changing times. An example is the additional reimbursement that goes to what HCFA designates as Medicare Dependent Hospitals, facilities in which more that 60 percent of the patients use Medicare. This designation was made in 1987, when Maine had no such hospitals. Today it has nine.

With federal budget surpluses now more than able to accomodate a remedy, Sens. Collins and Olympia Snowe both are wisely backing legislation that would update the funding formula and counteract the aspects of the Balanced Budget Act that threaten to further clobber rural health care. The Maine Hospital Association deserves credit for its pursuit of equity, Gov. King for working with other governors, and HCFA for recognizing that this issue is bigger than Maine.