Some hospitals underpaid due to faulty Medicare wage index

Emily Rappleye (Twitter) - Print  | 

The HHS Office of Inspector General found "significant vulnerabilities" in the Medicare wage index, leading to an estimated $140.5 million in improper payments from just five of its most recent reviews of hospital wage data.

The OIG has conducted 41 reviews of hospital wage data from 2004-17, according to a recent OIG report. Hospitals self-report wage data to help create area wage indexes, which ensure hospitals are paid relative to local labor prices. The wage index is budget-neutral, so the OIG findings indicate some hospitals benefited from the estimated $140.5 million in overpayments, while others were underpaid by approximately the same amount.

The OIG report details the following four main issues with the Medicare wage index:   

The report recommends HHS and CMS start penalizing hospitals for any instance of inaccurate or incomplete data, consider reforming the index or repeal the problematic provisions, and work to create a data auditing system. 

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