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Proposed Wage Index CBSA Changes

OMB proposes major changes to rural geographic areas 
Toyon Associates is pleased to provide this update on emerging reimbursement issues.  
Wage Index CBSA Update – Proposed changes to rural and urban CBSA classifications.
Issue and Background
The Office of Management and Budget (OMB) proposed significant changes that will financially impact hospitals in both urban and rural areas. If finalized, this change would alter the wage index landscape of Core Based Statistical Areas (CBSAs), which will also impact wage index reclassifications, rural redesignations under 42 CFR § 412.103, 340B thresholds and sole community hospital eligibility.  
To qualify as an urban geographic area, the OMB is proposing to increase the requirement from 50,000 to 100,000 people. This proposed change results in 144 CBSAs shifting from urban status, which based on the proposed timeline will likely start with Federal Year 2025.
Toyon’s Take | Next Steps
Stakeholders have until March 19, 2021 to submit comment. Please refer to the January 19, 2021 Federal Register, Vol. 86, No. 11 FR OMB Notice and request for comment (page 5263, OMB Recommendations (PDF version)
Please see Exhibit A (below) for the CBSAs that would change from urban to rural under OMBs proposal. Toyon is also estimating the potential financial impact of these market changes and will make our analysis available to our clients. In the meantime, please feel free to contact Ryan Sader to discuss these potential changes and related opportunities around wage index reclassifications, rural redesignation, etc. 
Contact:  Ryan Sader
888.514.9312, ext. 3240
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