WSW Secures the Imputed Rural Floor and Significant Additional Medicare Reimbursement for Hospitals in Massachusetts, New Jersey, and Rhode Island

In Brief

Secured over $1 billion in Medicare reimbursement for hospitals across Massachusetts, New Jersey, and Rhode Island, correcting a long-standing payment inequity and ensuring the policy continues to deliver funding indefinitely.
Achieved permanent legislative codification of the imputed rural floor in the American Rescue Plan Act after a 19-year advocacy campaign, successfully defending the policy against eight separate repeal attempts to provide long-term stability for the coalition.
Established a landmark policy precedent by securing the first new, non-budget-neutral Medicare spending authorized by Congress since the Affordable Care Act, demonstrating the ability to break through formidable barriers to achieve significant equity corrections.

Massachusetts, New Jersey, and Rhode Island were the only states designated as “all urban” under Medicare, leaving hundreds of hospitals without the “rural floor” wage index protection that prevented Medicare payment from falling below a state’s rural wage level. This structural disadvantage meant these hospitals were systematically underpaid compared to hospitals in other states, threatening their ability to serve vulnerable populations.

WSW led a three-state coalition and pursued a multi-track advocacy strategy across regulatory, legislative, and executive channels. We developed sophisticated methodologies demonstrating how an “imputed” rural floor would mirror existing Medicare policy for other states, making the proposal technically defensible and intellectually consistent with established precedent. Our team coordinated closely with key Members of Congress and Senators from the three states, committee staff, CMS leadership, and administration officials to build bipartisan support for this equity correction.

Over 19 years, we secured creation of the imputed rural floor through CMS regulation (2004), fought off eight attempts to eliminate it, restored national budget neutrality through the Affordable Care Act (2010), and ultimately achieved permanent codification in the American Rescue Plan Act (2021). This policy has delivered over $1 billion to hospitals across three states since 2005 and continues indefinitely. The permanent exemption from budget neutrality represents the first new Medicare spending authorized by Congress since the ACA, demonstrating that well-framed equity corrections can break through Medicare’s most formidable policy barriers.