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March 28, 2012 (Cleveland)

Preliminary Results Announced: Wage Index on the Rise, $10 Million Regional Gain



Northeast Ohio hospitals can expect just over $10 million in additional reimbursement thanks to The Center’s Federal Fiscal Year (FFY) 2013 wage index project. For months, The Center for Health Affairs and its contracted wage index professionals from the Reimbursement Alliance (RA) Group have been working with the region’s hospitals on a project to maximize wage index; preliminary results suggest these efforts have truly paid off. 

As a result of this year’s project, wage index factor is expected to increase, rising from 0.8892 in FFY 2012 to 0.9056 in FFY 2013. Average hourly wage also increased, rising from its pre-project value of $33.01 to $33.40. For Greater Cleveland hospitals the project translates to an additional $8.06 million in inpatient reimbursement and $2.02 million in outpatient reimbursement. These figures do not include any additional revenue that might be associated with commercial business that is tied to Medicare rates.

Wage index is a factor 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. The wage index assigned to a region by CMS can have a significant impact on the level of reimbursement that region receives for Medicare patients, which is why it is so important for Northeast Ohio hospitals to regularly review the data used to derive the wage index and present it to CMS as advantageously as possible. 

For more information please contact Lisa Anderson at lisa.anderson@chanet.org or 216.255.3660 or Deanna Moore at deanna.moore@chanet.org or 216.255.3614.

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