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ALBANY, NY — Congressman Paul D. Tonko and U.S. Senate Majority Leader Charles E. Schumer celebrated the finalized rule announced by the Centers for Medicare & Medicaid Services (CMS) that would address a longstanding inequity, known as the Medicare Wage Index (MWI), that has short-changed Capital Region hospitals in Medicare reimbursement rates. This formula adjustment, which Tonko and Schumer have advocated to fix for years, will bring more than $190 million annually to Capital Region hospitals and an estimated $967+ million across New York State each year.

“This victory highlights the exercise of taking a concern and elevating it into an issue,” Congressman Tonko said. “After years working to right this wrong done to our Capital Region, I am thrilled that CMS has at last heeded our call to fix the long-broken Medicare Wage Index formula. This fix to the formula means an influx of hundreds of millions to our local hospitals — long burdened by the added strain from the COVID-19 pandemic — to address staff pay and retention, update medical equipment and technology, and further invest in patient care. In short, this MWI adjustment means improved, quality care for our region.”

Tonko continued, “This fight could not have been won alone: I’m deeply grateful to our senators and House leadership for uplifting this effort, and to the hospital leaders, staff, and patients who shared their stories and insights with me and were there every step of the way to amend this injustice and deliver this vital funding to our region. After years spearheading this effort, this adjustment will be pivotal in making our hospitals and communities whole.”

“This is one of the biggest shots in the arm for federal funding Upstate NY hospitals have seen in decades, that will be a monumental boost to healthcare for our families and to help our healthcare providers fix budget shortfalls, address doctor and nurse shortages and so much more. For years, our hardworking healthcare providers that have faced unfairly low Medicare payments, receiving cents on the dollar for the care they provide, but now after over a decade of fighting I am proud to announce I have secured the rules change which will bring nearly $1 billion every single year to hospitals across Upstate NY,” said Senator Schumer. “Years from now, we will look back at today as a pivotal moment for our Upstate New York hospitals. From Buffalo to Binghamton, and Albany to Watertown, hospitals big and small, in rural and urban areas, will finally get the support and full reimbursements they have long deserved and have been denied for too long.”

For years, the Medicare Wage Index for the Capital Region has rested around 86 cents on the dollar, while nearby regions in New York, Massachusetts, and Connecticut were provided much higher rates. The finalized CMS rule for the FY24 Inpatient Prospective Payment System (IPPS) will bring the Capital Region’s MWI up to around $1.22, delivering more than $190 million in federal funding to NY-20 hospitals each year. 

Tonko’s push to raise the Medicare Wage Index dates back more than a decade to his days in the NYS Assembly. Throughout that time, he has worked alongside local hospitals to raise attention to this issue and push for action. In Congress, he led the charge pressing leadership to boost the MWI, including a fix to this reimbursement rate in the HEROES Act. That bill, along with the MWI provision, was passed out of the House in 2020 but stalled in the Senate.

Tonko continued to beat the drum after announcing the CMS proposed rule for IPPS earlier this year and visited each local hospital to discuss the impact this funding would mean to staff pay and retention, patient care, and the community as a whole.

Following this push for community-driven input, Tonko went to the Centers for Medicare & Medicaid Services (CMS) to hand deliver a letter ahead of the CMS public comment period deadline urging the fix to the MWI formula. Weeks later, he had a one-on-one meeting with CMS Administrator Chiquita Brooks-LaSure to discuss MWI and urge the proposed rule to be finalized. He also spoke with Department of Health and Human Services Secretary Xavier Becerra about the importance of this formula adjustment.

The new FY24 Inpatient Prospective Payment System (IPPS) rule will now increase the Capital Region’s adjustment to 122 percent of what the average hospital receives in wage adjustments, finally acknowledging that the region needs much higher than averages wages to compete and bring in the best providers, thereby bringing hundreds of millions in federal funding to Capital Region hospitals each year helping to improve healthcare for the communities they serve. A breakdown of the impact for Capital Region hospitals can be found below.

“To say this is welcome news would be an understatement,” said Paul Milton, President & CEO of Ellis Medicine in Schenectady, NY. “All along, we knew a fair change to the Medicare Wage Index would be a game changer for health care in the Capital Region. “We want to thank Congressman Tonko and Senate Majority Leader Schumer and for their persistence in keeping this issue front and center and pushing for fair reimbursement for the care we provide. For decades, our region has been underfunded because of depressed reimbursements that do not reflect the true cost of doing business in the Capital Region. When hospitals are reimbursed fairly for the care they provide, they can invest in the future and enhance access to quality care. With this decision, CMS has taken a critical step to help stabilize upstate New York hospitals, simply by putting us on an even playing field.”

“As non-profit organizations, our hospitals reinvest every single dollar into the care we provide, and in recent years we have all been additionally challenged by inflation, skyrocketing labor and supply costs,” said Dennis P. McKenna, MD, President and CEO of the Albany Med Health System. “This important and long-overdue adjustment to the Medicare wage index allows us to continue to grow our workforce, manage rising expenses, and provide our communities the care they expect and deserve. We thank Congressman Tonko and Senators Schumer and Gillibrand for their unwavering advocacy.”

“The gratitude I feel right now hearing the news the Medicare Wage Index increase has been approved is overwhelming,” said Steven D. Hanks, MD MMM FACP FFSMB, President & CEO, St. Joseph’s Health and St. Peter’s Health Partners. “Congressman Paul Tonko's support over the years has been key to realizing this long-standing effort, and his commitment to the future of our health care systems has never wavered. Both he and Senate Majority Leader Chuck Schumer have long been staunch advocates for health care in our region and we could not have reached this milestone without their strong voices in Washington, D.C., advocating for the communities we serve and the health care heroes who care for those communities. This is a tremendous victory, as the realization of this effort will go a long way towards stabilizing health care in our region, and ensuring we can continue to provide safe, compassionate care to the communities we serve, well into the future.”

“The wage index update brings equity and stability to the capital region," said Jill J. VanKuren, President and CEO of Saratoga Hospital.  "Recruitment and retention of high quality staff continues to be our number one challenge.  This update will help us close the gap.”

Overall, Schumer and Tonko explained that the new finalized rule change today will amend the Medicare formula to include an estimated $967+ million in increased federal funding for hospital systems across Upstate New York. You can find an estimated region by region breakdown below: