The hospital wage index is part of Medicare’s hospital inpatient prospective payment system. Under the IPPS, hospitals are reimbursed from Medicare based on two factors: the patient’s condition/treatment strategy and the market conditions of the hospital’s location. Within the “market conditions” factor is the wage index, or the average hourly wage for a hospital worker in a given metropolitan area. Since wages differ across the United States based on geographical location, CMS factors this into hospitals’ Medicare reimbursements.
According to a notice from CMS, hospitals — excluding critical access hospitals — have until Nov. 21 to review the preliminary wage index files and request revisions to their data. CMS will issue its proposed rule for the FY 2015 IPPS next spring, with the final rule expected by next August.
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