Local hospitals want equity in Medicare reimbursement.

Hospital administrators will talk Monday with Kerry Weems, administrator of the Center for Medicare and Medicaid Services, and Sen. Kent Conrad, D-N.D., about health-care concerns, including Medicare reimbursement. North Dakota's urban hospitals want to be reimbursed closer to what other urban areas in the United States are reimbursed through Medicare.

The meeting is at 1 p.m. in the Bismarck Civic Center. Sen. Byron Dorgan, D-N.D., and Rep. Earl Pomeroy, D-N.D., also are expected to attend.

Reimbursements for hospitals are based on an index that looks at wages in a geographic area defined by population and compares it to the national average.

Hospitals in Bismarck started receiving lower reimbursements in October when legislation that put them on an index tied to Fargo's wage index expired. The wage index pays hospitals for services and takes into account differences in personnel costs that can vary by area.

"We're forced to do more with less," St. Alexius CEO Andy Wilson said.

On one reimbursable procedure, for example, it cost the hospital about $300,000 per month, he said. Ideally, the hospital would like to be reimbursed at a rate similar to Duluth, Minn. Combined, St. Alexius and Medcenter One would receive about $5 million more a year in Medicare reimbursement for this one procedure if it received a higher reimbursement rate.

Local hospital administrators are seeking a legislative amendment that would provide more equitable funding.

The proposal is for a Frontier State Strategy, which gives a higher wage index for rural states, those with 2 million people or less and a density of 25 people or less per square mile. States that meet this definition are North Dakota, South Dakota, Nebraska, Montana, Wyoming, Idaho, New Mexico and Alaska.

"In the long term, we want the frontier state strategy to get paid no less than the national average for comparable care," Medcenter One CEO Jim Cooper said.

The different reimbursement rates were meant to account for the variable cost of providing health-care in rural and metropolitan areas. The reimbursement reflects what the labor market pays, said Valerie Miller, a senior health insurance analyst and wage index team leader with the Center for Medicare and Medicaid Services in Washington, D.C. Wage indexes go up when market wages increase greater than the national average and go down when the national average increases greater than the market wages, she said.

Local hospital administrators don't buy into the argument that it costs more in metropolitan areas to provide health-care. Metropolitan areas can leverage resources to purchase technology, and it is easier to attract employees. While the cost of living is generally less in rural areas, hospitals are expected to offer salaries that are competitive with major metropolitan areas to attract and retain employees, Wilson and Cooper said.

"You get the same level of care, or higher level of care," in a rural community, Wilson said.

For example, people expect to get the same kind of treatment for heart attack as in a larger metropolitan area, and reimbursement for the treatment should not vary by region, he said.

If the hospitals received a higher reimbursement, it would allow them to offer more competitive wages and allow them to buy some of the costlier pieces of medical equipment, Cooper said.

The wage index shouldn't affect the level of care, Miller said, and the reimbursement should only be a reflection in the cost-of-living differences. Also, the wage index takes into account hospital-reported wage data, she said.

"The service itself is reimbursed at the same rate" across the country, she said. "The wage index recognizes wages vary … Someone in Connecticut might have a higher hourly rate than someone in Mississippi."

Bismarck hospital administrators are seeking support for the frontier state strategy from the state's congressional delegation, as well as other groups.

Recently, the Bismarck-Mandan Chamber of Commerce supported the concept through a resolution.

"It will be extremely difficult to do," Conrad said about passing such legislation.

It will need to be part of a health-care reform package, he said, and cost about $26 million in new reimbursement for the eight states. This money would have to come from a spending reduction, an offset or new revenue, he said, but If the legislation is passed, it would let North Dakota and other smaller states compete with urban areas while providing the same quality of services.

If a frontier state strategy is passed, it would need to be budget neutral, Miller said.

(Reach reporter Sara Kincaid at 250-8251 or sara.kincaid@;bismarcktribune.com.)