U.S. Sen. Doug Jones, D-AL, who has long been an advocate for rural hospitals, applauded a move by the Centers for Medicare and Medicaid Services (CMS) that would address the Medicare Wage Index reimbursement formula.

The group announced the plan Tuesday on the heels of a meeting between Jones and CMS Administrator Seema Verma, which led to a bipartisan letter being drafted by the Alabama delegation calling for the agency to provide relief for Alabama hospitals by addressing the reimbursement rate.

Alabama has the lowest reimbursement rate in the nation, according to the Alabama Hospital Association, and almost 90 percent of Alabama hospitals are operating in the red and struggling to stay open.

Since 2011, 13 Alabama hospitals have closed – seven of those were situated in rural parts of the state.

“As I have traveled across Alabama meeting healthcare leaders in both rural and urban communities, I have heard two refrains consistently: fix the Medicare Wage Index formula and expand Medicaid,” Jones said in a press release. “The decision by CMS to propose a new reimbursement formula is welcome news and a great first step for the healthcare providers across our state who have struggled for years with an inexplicably low reimbursement rate.”

Vaughan Regional Medical Center (VRMC) CEO David McCormack said the low reimbursement rate has caused many members of his staff to go without raises for the past three years or more.

“It really puts hospitals, not just our hospital but hospitals across the state, especially in rural areas, at a real disadvantage,” McCormack said. “We’re not able to pay the wages they get in other areas [because] the hospitals in Alabama are paid at a lower rate than any other hospitals across the country.”

McCormack said a change to the index would mean he could provide his staff with a pay increase and invest in much-needed additions and upgrades to the hospital.

“We’d have additional funds to give our staff raises, to spend a little bit of money on capital equipment and facilities,” McCormack said. “We’re very fortunate in our state – the hospitals have been operating at a low reimbursement rate for so long that we’ve learned how to do it and still meet the quality standards that are required for our patients. We really watch every penny.”

The reimbursement rate is of significant concern to McCormack and VRMC – at least 65 percent of the patients who visit the hospital are insured through Medicaid or Medicare.

“These hospitals provide care to all Alabamians, regardless of their insurance status, and they have to absorb the costs when that care isn’t reimbursed,” Jones said in the release. “That puts the entire system on a slippery financial footing and can hurt the broader community if a hospital is forced to close its doors.”

McCormack said there is no risk of VRMC closing its doors, even if the reimbursement rate is not adjusted to benefit Alabama and other areas struggling with low returns, mainly because of the commitment of his staff.

“Healthcare’s very important to this community and the whole state of Alabama,” McCormack said, noting that roughly 100,000 Alabamians work in the healthcare industry, making it the state’s largest employer. “I don’t think the government appreciates the dedication and skill of people who work in healthcare.”

McCormack remains optimistic that change will come.

“This right here is a good first step,” McCormack said. “To at least acknowledge that there’s such a disparity is a good thing, but we still need to expand Medicaid in the state.”

According to Jones’ press release, expanding Medicaid in Alabama would bring $2 billion worth of tax money back to the state within the first year and provide health coverage to some 326,000 residents.