Low Volume Payment Adjustment
Deadline September 1

On April 1, 2014, the Protecting Access to Medicare Act of 2014 was signed into law. One of the provisions of this law, Section 105, extends the Medicare Inpatient hospital low-volume payment adjustment until March 31, 2015, for hospitals under the inpatient prospective payment system. This adjustment allows hospitals 15 miles or greater from the nearest "subsection (d)" (section 1886(d) of the Act) hospital (IPPS hospital) as defined in 412.92 (c)(1) and have less than 1,600 Medicare discharges as specified in 412.101 to receive additional Medicare payments.

To receive the Low Volume payment, hospitals must attest to their Medicare Administrative Contractor that they meet the discharge and mileage requirements. On May 12, 2014, CMS published official notice through CMS Transmittal R2951CP Change Request 8761 that a request for the low volume payment adjustment must be made in writing to your contractor by September 1, 2014.

CR 8214 also states: "A hospital that qualified for the low-volume payment adjustment in FY 2011, 2012 & 2013 may continue to receive a low-volume payment adjustment in FY 2014, without reapplying, if it continues to meet the Medicare discharge criterion, based on the most recently available MedPAR data," (shown in Table 14 of the Federal Register notice and provided in the link below) "and the distance criterion. However, the hospital must verify in writing to its FI or MAC that it continues to be more than 15 miles from any other "subsection (d)" hospital no later than September 1, 2014."

CMS-1607-P Table 14

If you have questions about the low volume payment adjustment or need assistance making this request, please contact Steve Rader, Scott Braun or your Eide Bailly representative.

Wage Index - Submission Deadline Finalized
Deadline October 6

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.

The deadline for any Federal Fiscal Year 2016 Wage Index revisions has been moved up to October 6, 2014, and is fast approaching. Now is the time to capture all opportunities to increase your AHW.

Potential Areas of Opportunity 
 

• Recalculate the hours reported: A review of your hospital's payroll file may provide an 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 (those with a Defined Benefit Plan) to significantly increase their employee benefit cost included in the Wage Index calculation.
   
• Contracted Administrative 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.  
   

Should you have any questions, please contact one of our team members below or your Eide Bailly representative.