Posted on June 16, 2017
Each year, the Centers for Medicare & Medicaid Services (CMS) develops the Medicare wage index, which adjusts Medicare payments for geographic wage variations. Hospital input is necessary to ensure the wage index is based on accurate data.
The wage index is developed using the wage and hours data that hospitals report. As part of that process, the CMS allows hospitals to review the data it obtained from hospital cost reports and request any necessary changes. In addition, the CMS adjusts the wage index for staffing differences based on the occupational mix adjustment developed from occupational mix survey results. Hospitals are required to complete the survey every three years.
Hospitals are currently completing the 2016 occupational mix survey, which is due to Medicare Administrative Contractors (MACs) by July 3. In mid-May, the CMS released preliminary hospital wage data that is being used to develop the fiscal year (FY) 2019 Medicare wage index. For the FY 2019 wage index, the CMS is using wages and hours reported on hospital cost reports ending between Sept. 30, 2015, and Aug. 31, 2016. Hospitals should review their preliminary data and submit requests for changes, along with supporting documentation, to their MAC by Sept. 1.
To assist hospitals in reviewing the data, the MHA distributed hospital-specific worksheets May 30 to provide a three-year comparison. In addition, the MHA hosted two educational webinars to help hospitals ensure their data is accurately reported for purposes of both the wage index and the occupational mix adjustment.
A recording and other materials from the April 19 webinar on the occupational mix survey are accessible online. Also available are materials from the June 15 webinar on the preliminary data, including a Medicare workbook, background materials and an audio recording.
The wage index is used to adjust up to nearly 70 percent of hospital inpatient payment rates and 60 percent of outpatient payment rates. It is also used to adjust Medicare payments for other prospective payment systems, including post-acute-care payments for skilled nursing facilities, long-term acute care hospitals, inpatient rehabilitation facilities and inpatient psychiatric facilities. The occupational mix adjustment, developed using the occupational mix survey results, can increase or decrease the area wage index significantly.
The MHA encourages hospitals to submit a completed occupational mix survey and any necessary requests for data changes before the deadlines noted above. Members with questions should contact Vickie Kunz at the MHA.
Posted in: Member News