News Releases

2024 Wage Index Project Generates an Estimated $16 Million for the Northeast Ohio Hospital Community

The 2024 Northeast Ohio hospital Medicare wage index project, led by The Center for Health Affairs, is bringing an estimated $16 million in additional reimbursement this year to the region’s hospitals compared to what they would have otherwise received.

Based on location, hospitals are assigned to one of more than 700 Core-Based Statistical Areas (CBSA) with each CBSA being assigned a wage index factor. Data from 2020 Medicare cost reports was used to determine the 2024 wage index for each CBSA.

As in 2023, the Cleveland average hourly wage (AHW) increase for the 2024 calculation lagged behind the national AHW, resulting in a decrease in the Cleveland area CBSA wage index. The calculated wage index for the Northeast Ohio CBSA average hourly wage rate for 2024 — from data originally reported on the area hospitals’ filed Medicare Cost Reports — was 0.8261 versus the 2023 wage index of 0.8786. Following a series of reviews by Medicare auditors as well as by local consultants working with and on behalf of local hospitals, the final wage index was set at 0.8509.

About the Wage Index

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. Over just the last five years, the project has returned $58.2 million in increased reimbursement.

Consultants at Comprehensive Reimbursement Inc. 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 $165,480 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 region. The wage index  is calculated based on the data reported by each hospital. This means each individual hospital can influence the reimbursement of all hospitals in the region. The commitment of Northeast Ohio Hospitals to the project has enabled them to achieve gains each year.

For more on The Center’s Medicare wage index work, contact us