Sen. Alexander, Ballad CEO say new Trump admin rule would prevent rural hospitals from closing


WASHINGTON (WJHL) – Sen. Lamar Alexander (R-TN) is praising a rule by President Donald Trump’s administration, saying it will prevent rural hospitals from closing in Tennessee.

The rule, if implemented, would update the formula that determines how much hospitals get reimbursed by Medicare. According to Alexander, that would be good news for rural hospitals.

“This formula takes into account, among other things, the cost of labor in that geographic area – called the area wage index,” Alexander said on the Senate floor Tuesday. “This new rule attempts to level the playing field between hospitals in areas that have higher wages and hospitals in areas with lower wages.”

Alexander, who serves as chairman of the Senate health committee, said that 107 rural hospitals have closed across 28 states since 2010. 12 of those were in Tennessee.

While speaking today, the senator mentioned the Tri-Cities region.

“Last month, Alan Levine, who leads Ballad Health, a health care system in East Tennessee, announced a $10 million investment in pay increases for nurses,” Alexander said. “Alan said this investment was, in part, because of a new rule proposed by the Trump Administration in April.”

Ballad Health President and CEO Alan Levine says the change is desperately needed in our region.

“The rule that HHS has promulgated is probably the best rural health policy I’ve seen come out of Washington in 20 years,” Levine said. “Rural hospitals have been struggling under the weight of the wage index and the rural floor, and they have, frankly, been paying for a shift of money from rural communities to urban centers up in New York, in California, and Massachusetts.” 

“Half of our hospitals lose money,” Levine added. “Half of our hospitals today have negative operating margins and that puts a huge strain of Johnson City Medical Center and Bristol Regional Medical Center. You have most of our rural hospitals lose money and Holston Valley, it has been well reported, has negative operating margins.”

Levine also said he is “grateful for the Trump administration recognizing the needs of rural communities and we certainly will put those dollars to good use here.”

The public comment period for the Medicare rule change has ended and the final decision is expected by October 1st.

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