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Wage Index - The Last Frontier
As the Centers for Medicare and Medicaid Services (CMS) continues to tighten hospital payments and potential cuts loom on the horizon, your hospital's Wage Index has become one of the few areas where you can have a direct impact and potentially increase future Medicare payments.
The Wage Index calculation is the basis used by CMS to determine the adjustments made to the labor portion of your Medicare Base rate. A hospital's calculated Average Hour Wage (AHW) is compared to the national average rate and an adjustment factor is determined. The factor will be below 1.0 if the hospital rate is below the national AHW and above 1.0 if the hospital is above the national AHW.
With the deadline for any Federal Fiscal Year 2015 Wage Index revisions fast approaching, you should be capturing all opportunities to increase your AHW.
Potential Areas of Opportunity
- Recalculate the hours reported:
A review of your hospital's payroll file may provide opportunity to reduce the hours and increase your hospital's AHW. - Pension cost claimed:
CMS has made recent changes on how you claim Pension expenses, which has enabled some hospitals to significantly increase their employee benefit cost included in the Wage Index calculation. - Contracted Admin Labor: Many hospitals continue to under claim the cost and hours associated with contracted labor, such as executive staffing, legal, audit, and consulting.
These services are generally paid at a much higher rate which can have a dramatic impact on your hospital's AHW.
To learn more, please join us for a free webinar on Tuesday, August 20 from 11:00am - 12:00pm to see how correcting your hospital's Wage Index can help you enhance your Medicare payments.
If you have any questions, please contact Eddie Phibbs, Ryan White, or your Eide Bailly representative. |
