Brady Introduces the Repeal of the Obamacare Bay State Boondoggle Act

As Chairman of Committee on Ways and Means Health Subcommittee, I introduced H.R. 1479, the Repeal of the Obamacare Bay State Boondoggle Act.

The legislation repeals the "Bay State Boondoggle," a sweetheart deal included in ObamaCare that is taking hundreds of millions of dollars each year from hospitals around the country and giving it to hospitals in Massachusetts (MA).

Former Speaker Nancy Pelosi told Americans that, "we have to pass the bill to find out what’s in it." What we saw were a number of backroom deals that did nothing to decrease the cost of health care. It’s time to repeal Obamacare’s backroom deals. Because of the controversial 'Bay State Boondoggle,' hospitals in nearly every state, many in underserved areas, have missed out on much needed funding, and unless Congress acts these hospitals will continue to struggle to care for those in need. It is my hope that Congress will act soon to repeal this misguided policy. It’s time to stop rewarding one state at the expense of all the others.

Background:

The Centers for Medicare and Medicare Services (CMS) is required to adjust Medicare hospital wage reimbursements to reflect the geographic area where services are delivered. This allows for recognition that the average hourly wage for an emergency triage nurse is higher in urban areas than it is in rural areas. The Medicare wage hospital wage index also includes “floors” to ensure that the wage index for rural hospitals is not higher than urban hospitals. Prior to ObamaCare, CMS was implementing a change that would tie application of all hospital wage index floors to a state budget neutrality calculation -- meaning a change to the wage index rural floor in a state would reallocate money only within that state.

ObamaCare changed this state budget neutrality to a national budget neutrality. Soon after ObamaCare was signed into law, a 15-bed hospital in MA was purchased by a large MA health system and was re-designated from a critical access hospital (the wage index does not apply to critical access hospitals) to an acute care hospital (wage index does apply). This 15-bed acute hospital set a new rural floor for the state of MA. Prior to ObamaCare this change would have triggered a reallocation of funds only within MA. But, because of ObamaCare’s change to national budget neutrality for the rural floor, hospitals in 40 other states ended up paying for the MA change.

The Repeal the Bay State Boondoggle Act repeals the ObamaCare earmark and would convert any changes to Medicare hospital wage index floors back to a state-specific budget neutrality calculation. Overall, the legislation has no budgetary impact.