Deborah Heart & Lung seeks extra Medicare pay

Deborah Heart and Lung Center sits deep in New Jersey's Pine Barrens, about halfway between Center City and Seaside Heights on the Jersey Shore, and meets key criteria for classification as a rural hospital.

Gaining that rural designation would allow the Browns Mills tax-exempt organization to be designated a "Medicare Dependent Hospital" and bring it an additional $5 million a year in Medicare revenue.

The catch is that the federal Centers for Medicare and Medicaid Services has decided that New Jersey has no rural areas, blocking Deborah from the extra money, despite a favorable ruling in 2014 from a Medicare review board.

The latest effort is a bill introduced in Congress last month that would make Deborah, as well as small hospitals in two other so-called all-urban states - Delaware and Rhode Island - eligible for extra Medicare reimbursement if they are in rural areas.

The bill's sponsors, Sen. Robert Menendez (D., N.J.) and Rep. Tom MacArthur, whose district includes parts of Burlington and Ocean Counties, visited Deborah on Tuesday to talk about the legislation.

"This is just patently unfair to our hospitals," Menendez told a crowd at Deborah.

To qualify for extra reimbursement as a Medicare Dependent Hospital, a facility must be in a rural area, have fewer than 100 beds, and rely on Medicare for at least 60 percent of its patients.

In 2015, Medicare accounted for 65 percent of Deborah's business.  It has 89 beds and had $172 million in revenue last year.

Deborah, which is unusual in that it accepts private and government insurance as full payment and does not bill patients for any balances, in 2011 asked federal Medicare regulators, commonly called CMS, to reclassify it as a rural hospital.

It appealed to the Provider Reimbursement Review Board, which ruled in its favor in 2014.

CMS was unmoved.

That's when Deborah turned its attention to the possibility of legislative relief.

"We knew it was going to take an action of Congress to overturn that," said Grant Leidy, Deborah's chief financial officer.

CMS officials could not be reached for comment.

"This unfairness hurts the patients of South Jersey," he said.