News Releases

Wage Index Initiative Moves Forward

In an effort to maximize reimbursement for its member hospitals, The Center for Health Affairs once again contracted with the Reimbursement Alliance Group to conduct a wage index analysis of Northeast Ohio hospitals for federal fiscal year 2013.  Like last year’s project, work began in the fall with site visits and data review for each of the member hospitals.   These visits have now ended and the revised information has been submitted to the region’s fiscal intermediary, the agency that conducts the next step in the wage index process.  Over the next few months The Center’s consultants will monitor the progress of the fiscal intermediary’s review and respond to any questions that may arise.

Used by the Centers for Medicare and Medicaid Services (CMS) to account for regional differences in the cost of wages in the Medicare reimbursement formula, wage index can have a significant impact on the level of reimbursement that region receives for Medicare patients.  Careful review can uncover adjustments that ultimately make a significant impact on reimbursement in the region.  In fiscal year 2012, for instance, The Center for Health Affairs member hospitals will receive a projected $8.4 million in additional reimbursement as a result of the wage index initiative.

The Center believes it is important to work together as a region to provide the most accurate data possible to CMS and to ensure that its member hospitals receive the highest reimbursement possible and will continue to pursue that goal; however, many experts have begun questioning the validity of the current process used to determine wage index across the nation.  Today, almost four out of ten hospitals have some sort of exception to their wage index.  In addition, recent tactics used by hospitals in Massachusetts to raise the wage index for all hospitals in that state at the cost of hospitals across the country also point to the need for careful review of the current process.  Scrutiny has intensified in recent months and has culminated in CMS convening a wage index task force to review the current methodology.  The Center will continue to monitor the progress of this group and inform its membership of any changes that may arise as a result of its work.

For additional information on The Center’s wage index project or developments related to the CMS wage index task force, please contact Lisa Anderson at 216.255.3660 or lisa.anderson@chanet.org or Deanna Moore at 216.255.3614 or deanna.moore@chanet.org.