Rural state hospitals want Obama to nix healthcare law's special deal for Massachusetts

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"Hospitals nationwide are already struggling with reduced government payments and the potential for cuts through the federal deficit reduction discussions and health care reform. Scarce Medicare funding should reward value and efficiency in health care, not be diverted based on artful manipulation of obscure payment formulas."

The panel that recommends Medicare payment policy to Congress raised concerns with the provision last summer.

"This is a clear example of how the current system of exceptions is not an equitable method of adjusting for input prices," the Medicare Payment Advisory Commission wrote to then-Medicare Administrator Donald Berwick back in June. "A new wage index system is needed."

The new letter was signed by hospital groups from Alabama, Arkansas, Delaware, Georgia, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Ohio, Nebraska, North Carolina, Oklahoma, Oregon, South Carolina, South Dakota, Virginia, West Virginia and Wisconsin.