News Tagged as Wage Index

From: CMS Administrator – April 11, 2012

CMS submitted a report to Congress titled “Plan to Reform the Medicare Wage Index” as required by the Affordable Care Act.  The recommendation made in the report is to move to a “Commuting Based Wage Index” (CBWI) that will reflect actual employment patterns of hospitals and would reduce large wage index differences between nearby hospitals.

The approach proposed in this report would focus on hospital employee commuting patterns to better define labor markets.  The geographic reporting regions are proposed to be on a ZIP code or Census Tract basis.  The resulting indices developed   would be on a hospital specific basis.

If this proposed approach were to be adopted, the report discusses additional data reporting that will need to be established in order to implement this CBWI.  Given this need to track additional data, it would appear that this CBWI if accepted by Congress would be at least two Federal Fiscal years from implementation if it were acted on quickly.

Read more: Report to Congress – Wage Index Reform

This case involved one hospital located in the Fort Wayne MSA that requested correction to total paid hours to exclude services paid but not-worked from its wage data for purposes of calculating the wage index. The Provider supplied documentation of the paid, un-worked hours to the FI. The FI rejected the Provider’s request stating that the Provider’s information was not supported with detailed documentation. The Provider according to the FI included only summary documentation in support of their request and rejected the request. The Provider’s subsequent request to CMS was also denied.

The Board ruled in favor of the FI. They concluded that the Provider did not provide adequate documentation in their request.

Read more: Medicare Wage Index – Fort Wayne MSA (Indiana)

CMS Releases Updated Wage Data File – FFY 2013

From: CMS – 2/22/12

CMS released the revised FY 2013 wage index and occupational mix files earlier this week.  The wage data in this file includes the FI/MAC desk reviews.  An average hourly wage comparison by CBSA file is also included comparing the current wage information to FY 2012. 

March 5^th is the next deadline for hospitals to submit requests (including supporting documentation) for:

1. Corrections to errors in the February 2012 PUF or mishandling wage index data.
2. Revisions of the desk review adjustments (appeal) to their wage index data included in the February 2012 PUF.

The FIs/MACs must receive these requests and the supporting documentation by this March 5, 2012 deadline.

From: CMS E-mail Notification – 1/10/12

Text of CMS E-mail:

Section 302 of the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA) extends Section 508 reclassifications and certain special exception wage indexes for 2 months, from October 1, 2011, through November 30, 2011. For the period beginning on October 1, 2011, and ending on November 30, 2011, Section 302 also requires removing Section 508 and special exception wage data from the calculation of the reclassified wage index if doing so raises the reclassified wage index. All hospitals affected by Section 302 of the TPTCCA shall be assigned a special wage index effective for only October and November 2011. We will apply the provision to both inpatient and outpatient hospital payments. For hospital outpatient payments only, special exception hospitals and other reclassified hospitals that would have a higher wage index based on the removal of section 508 and special exception hospitals’ wage data will receive a special exception wage index from January 1, 2012, through February 29, 2012.

IPPS and OPPS claims from section 508 hospitals, IPPS special exception hospitals and IPPS non section 508 hospitals affected by section 302 with discharge dates on or after October 1, 2011, through November 30, 2011, will be reprocessed no later than December 31, 2012, in accordance with the TPTCCA.

OPPS claims for hospitals reclassified for special exceptions and other affected reclassified hospitals that completed processing before the wage index was updated will be reprocessed by early February, 2012.

Please note that for OPPS hospitals, a section 508 hospital that has geographic reclassification extended from October 1, 2011, to November 30, 2011, will revert to its previously scheduled October 1, 2011, reclassification or its home area wage index from December 1, 2011, to December 31, 2011. OPPS special exception hospitals and reclassified hospitals that benefit based on removal of section 508 and special exception hospital data shall revert to the CY2012 rule wage index, beginning March 1, 2012. IPPS hospitals shall revert to their wage index promulgated in the FY2012 rule located on our website at http://www.CMS.gov/AcuteInpatientPPS/FR2012/itemdetail.asp?itemID=CMS1250520.

Wage Index Issues – Youngstown – Warren 02 MSA WI Group

PRRB 2012-D5 – January 6, 2012 (FFY 2002)

The Providers are challenging the Youngstown-Warren Metropolitan Statistical Area (MSA) Wage Index applicable to the Federal Fiscal Year 2002 as improperly established under the Medicare PPS. The final determination being appealed is the notice of the FFY 2002 hospital wage index published by CMS in the Federal Register (Final Rule FR 8/1/02).

This is a significant decision as it reflects another of  a series of decisions that were initiated from the Medicare PPS wage index audit.  The appeal included the following specific issues that were estimated to have a $267K impact to Medicare PPS reimbursements:

1. Disputing the inclusion of “Bonus” hours
2. Disputing the inclusion of “Call Back” Hours
3. Exclusion of contracted Pathology service costs
4. Exclusion of contracted Per fusionist service costs
5. Exclusion of self-insurance workers compensation costs
6. Exclusion of on-site day care costs

The Group prevailed in issues 1 – 5 of the appeal.  Issue 6 was denied.  The PRRB stated that day care service costs were already included in the initial wage data and the claim reflected a duplication of costs.

Wage Index Pension Cost Guidelines

From CMS Website – posted 11/21/11

CMS recently posted updated spreadsheets and instructions for the development of FY 2013 pension costs. The spreadsheet contains 4 tabs that include: 

1. Pension Costs Instructions
2. Prefunded Pension Costs Instructions
3. Pension Costs Calculation
4. Prefunded Pension Costs Calculation

Reminder: FFY 2013 Wage Index Development – December 5, 2011 Deadline Approaching

The deadline for hospitals to request revisions to their Worksheet S-3 wage data and occupational mix data is rapidly approaching.  The FIs/MACs must receive revision requests and supporting documentation by this date.

The link provided above will take you to the FY 2013 Hospital wage index development timetable.

FY 2013 Hospital Wage Index Development Timetable

(October 2011 through October 2012) 

The wage index development timetable has been released by CMS. The deadline for hospitals to request revisions to their Worksheet S-3 wage data and occupational mix data as included in the October PUFs and to provide documentation to support the request is December 5, 2011.

Click here…

Wage Index – Hall Render Wage Index Group Appeal

PRRB 2012-D1 – October 6, 2011

There are two wage index related issues included in this appeal:

1. Whether the FI and CMS properly determined the wage indices for several Kentucky and Ohio Hospitals for FFY 2009. This issue involved short term disability related hours that were included in total paid hours for the average hourly wage determination. The providers argued that these types of costs should be considered “other wage related” in nature and therefore the hours should be excluded. The PRRB ruled in favor the providers that these costs should be considered “other wage related.”
    
2. Whether the FI and CMS and Medicaid properly determined the wage indices for two CBSAs. This issue involved is effectively *bonus pay*  to employees to work unpopular or undesirable hours. The payroll system includes hours for this pay that the provider argued should be excluded. Bonus type pay does not need to have hours included. The PRRB ruled in favor of the providers for this issue.

This is the first wage index appeal that we have seen ruled on by the PRRB. The appeals are filed off of the wage index audit. It will be interesting to see how the decision is implemented from a reimbursement perspective. This most likely will be drawn out, as we can expect that the CMS-Administrator will review the case and reverse the PRRB’s decision.

Just a reminder that the Occupational Mix wage data using 2010 calendar payroll information is due on June 30, 2011.