The Save Struggling Hospitals Act would make permanent a Medicare policy designed to help hospitals in low-wage areas. Under current rules, hospitals in regions with below-average worker wages receive reduced Medicare payments because payment formulas are based on local wage levels. This bill would codify an existing temporary policy that increases payments to hospitals in areas below the 25th percentile in wages by half the difference between their local wage index and the national 25th percentile standard, effective from October 2019 forward. The adjustment would be applied in a budget-neutral manner, meaning any increases to low-wage hospitals would be offset by adjustments elsewhere, though hospitals below the 75th percentile wage threshold cannot have their payments decreased. This legislation primarily affects rural and economically disadvantaged hospitals that struggle to compete financially due to lower local wage costs, helping them maintain operations and services in their communities.
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