Sen. Menendez Press Release

May 2, 2021 4:48 pm

JERSEY CITY, NJ – U.S. Senator Bob Menendez (D-N.J.) and Congressman Bill Pascrell, Jr. (N.J.-09), senior members of the Senate Finance and House Ways and Means Committees that respectively oversee national health policy, today announced that they have secured key provisions in the final FY2022 Centers for Medicare and Medicaid Services’ (CMS) proposed rulemaking that will pump at least $133 million more annually in federal funding into New Jersey hospitals, help them attract the best talent and provide high quality care, and address the national doctor shortage by adding more medical school residency slots.

“At a time when New Jersey’s hospitals, doctors and nurses have been on the frontlines of the COVID-19 pandemic, they need all the help they can get to continue to deliver the high quality care their patients expect and deserve,” said Sen. Menendez. “These moves by CMS to implement policies I have long fought for will inject millions of dollars in annual federal funding into New Jersey’s hospitals, help them attract the best talent and pay providers, and begin to meaningfully address the doctor shortage by creating new residency slots and supporting our local teaching hospitals.”

“Perhaps no state in our union was hit harder by COVID-19 than New Jersey. Our doctors and nurses on the frontlines are heroes of this pandemic and they must have the support they need to protect our communities,” said Rep. Pascrell. “Senator Menendez and I have repeatedly called on CMS to make these moves and I am gratified they are injecting millions of fresh dollars into the arms of New Jersey hospitals. This federal support will benefit patients by allowing our top-notch hospitals to retain and hire the best and the brightest.”

CMS will move to make permanent the so-called imputed rural floor, which would generate millions more annually in Medicare reimbursements for New Jersey’s hospitals.

Sen. Menendez authored and successfully fought to include a provision in the American Rescue Plan before it passed the Senate that permanently restores the so-called imputed rural floor policy that was eliminated by the Trump Administration, costing New Jersey hospitals millions of dollars annually. As a result, hospitals in New Jersey have been left at a competitive disadvantage due to depressed Medicare wage payments.

CMS first established the imputed rural floor in FY2005 in order to ensure equitable payment policies for rural hospitals located in states designated as “all-urban” by CMS. New Jersey is currently one of only three states, along with Delaware and Rhode Island, designated by CMS as “all-urban” based upon geographic size and statewide population, but that designation ignores the realities that there are rural areas within those densely populated states and hospitals operating in those communities that face the same challenges as rural hospitals located in other states. Permanently restoring the imputed rural floor allows New Jersey’s hospitals to effectively compete for the highest quality health care talent available by providing parity with neighboring states.

Sen. Menendez and Rep. Pascrell have, for years, successfully led efforts to extend the so-called imputed rural floor policy. It was last extended in 2017, but the Trump Administration allowed it to lapse at the end of FY2018, putting New Jersey hospitals at a competitive disadvantage due to depressed Medicare wage payments and costing them millions annually.

CMS will raise the imputed rural floor in FY2022 above expectation, delivering even more resources for New Jersey’s hospitals.

By raising the imputed rural floor in FY2022, the New Jersey Hospital Association (NJHA) estimates New Jersey hospitals will potentially receive an additional $133 million in Medicare reimbursements.

CMS will delay for at least one year the creation of a separate Medicare Area Wage Index in Central Jersey that would cost area hospitals an estimated $100 million.

Sen. Menendez and Rep. Pascrell led the delegation’s objection to a Trump-era rule that would create a new Medicare Area Wage Index in Central Jersey by removing three counties—Middlesex, Monmouth, and Ocean—from the New York-Newark-Jersey City core-based statistical area (CBSA). The one-year delay in its implementation gives them additional time as they continue to fight to reverse the rule, which would cut Medicare reimbursements by 17% for providers operating in those three counties, costing them approximately $100 million, according to NJHA estimates. It also puts these hospitals at a competitive disadvantage in attracting the best talent when nearby hospitals in northern New Jersey or New York City are reimbursed by Medicare at a higher rate.

CMS will begin to phase-in 1,000 additional physician residency slots, at 200 slots a year over the next five years beginning in FY2022, to address a national doctor shortage.

In December, Sen. Menendez secured the first increase in Medicare-funded graduate medical education (GME) slots in nearly a quarter century to help address the national doctor shortage. Language included in the FY2021 spending package adding 1,000 new physician residency slots was based on the senator’s bipartisan Resident Physician Shortage Reduction Act.

That same spending package passed in December included the Supporting Graduate Medical Education at Community Hospitals Act, sponsored by Sens. Menendez and Cory Booker and Reps. Pascrell and Josh Gottheimer (N.J.-05). The bill removed the arbitrary cap on GME slots, paving the way for the additional 1,000 slots to be added, and was designed to help community hospitals like Holy Name Medical Center in Teaneck, N.J., allowing them to invest in teaching programs that will keep New Jersey’s health workforce competitive.

“Training medical students—the next generation of doctors—is more important than ever having just come through this global health crisis,” said Michael Maron, president and CEO of Holy Name Medical Center. “Without the hard work and support from Senator Menendez and Congressman Pascrell, the impact of New Jersey’s critical physician shortage would be felt by every resident in the state. We are grateful for their efforts and look forward to having the resources to continue to care for New Jersey families.”

New Jersey currently suffers from a shortage of physicians. According to data from NJHA, a third of New Jersey’s practicing physicians are over 60 years-old, the third highest in the nation, and the state ranks 46th in the nation in the percentage of doctors under 40, according to the Association of American Medical Colleges.

Each year, New Jersey has approximately 3,100 physician residents in training at 43 hospitals. At the same time, NJHA estimates that New Jersey has approximately 32 medical students and resident physicians in training per 100,000 residents compared to 81 and 62 in neighboring New York and Pennsylvania, respectively.