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November 03, 2021 (Cleveland, OH )

The Center's Wage Index Project to Bring Hospitals An Additional $14.3 Million in 2022

Northeast Ohio hospitals will receive an estimated $14.3 million in additional Medicare revenue in federal fiscal year 2022 as a result of The Center for Health Affairs’ Medicare wage index project. Under the hospital inpatient prospective payment system final rules, the final wage index for the Cleveland core-based statistical area (CBSA) is 0.8860, an increase from the 0.8651 originally reported at the beginning of the wage index project and also up from last year’s index, which came in at 0.8788.

The Center’s annual Medicare wage index project over the years has helped the region’s hospitals capture many millions of dollars in Medicare revenue that would otherwise have been forgone. Consultants at Reimbursement Alliance Group work with participating hospitals to ensure the final data being submitted to the Centers for Medicare and Medicaid Services (CMS) through Medicare cost reports is accurate and comprehensive. The gains from the project far exceed the cost, which this year was $162,000 across the participating hospitals and included a discount negotiated by The Center for Health Affairs.

The wage index is used by CMS to account for regional differences in the cost of wages in the Medicare reimbursement formula and has a significant impact on reimbursement for care to Medicare patients. Since other payers often factor in what Medicare pays when determining their own reimbursement level, the results of the wage index project results can ripple throughout hospital payments.

A key factor in the success of the project is the participation of all hospitals in the Cleveland CBSA. The wage index is calculated based on the data reported by every hospital in a region. This means each individual hospital can influence the reimbursement of all hospitals in the CBSA. The commitment of hospitals in the region to the project has enabled them to achieve gains each year.

For more on The Center’s wage index project and its impact on Medicare revenue, contact us.