N.J. to win with Medicare change, Pa. to lose

New Jersey is among seven states that will benefit from a provision of the federal health care law that became official this week.

The change involves rules used to adjust Medicare reimbursements to hospitals for the difference in labor costs around the country.

New Jersey stands to gain $54 million each year. That is second only to the amount Massachusetts will get.

Hospital officials in many states are criticizing the change, but Sean Hopkins, with the New Jersey Hospital Association, said it is fair.

“As with any rule, there are pluses and minuses. There are other components of the inpatient (prospective payment system) rule that are not favorable to New Jersey, or other hospitals in the entire country,” Hopkins said. “The coding offset that Centers for Medicare and Medicaid Service implemented that would reduce every hospital’s Medicare payments by 2 percent, that’s gonna be an onerous hit to hospitals throughout the entire country.”

Pennsylvania will lose more than $17 million a year in reimbursements due to the change.

Ken Braithwaite, regional director of the Delaware Valley Healthcare Council, said the discrepancy highlights a larger issue.

“That’s that the complexity and nature of the Medicare regulations have allowed various constituencies to attempt to amend the rules to their advantage,” Braithwaite said. “This underscores why the area wage index current calculation and process is problematic.”