Wage Index Review Services
Medicare is required to update the area wage index annually. Because the area wage index is developed using core based statistical areas and rural areas, hospitals in these groups have a vested interest in assuring the average hourly wage is properly reported.
As a hospital, you understand that a change in your area’s overall wage index can lead to a significant reimbursement opportunity. But because of the complex rules associated with reporting wage data, hospitals often don’t benefit from these opportunities.
How we can help
At RSM McGladrey, our wage index review services help you comply with the complex reporting rules and identify areas for improvement — often enhancing your reported average hourly wage and increasing your group’s area wage index. We have worked with a wide variety of geographic areas to help our clients increase revenue streams.
Our approach to wage index reviews includes the following phases:
Analysis
- Review the as-filed wage data worksheets of the Medicare cost report and books of record to identify all allowable wages, employee benefits and hours
- Perform a detailed reconciliation of salaries, employee benefits and hours by department to ensure proper matching by cost center
- Review the benefit allocation for appropriate matching with physicians
Focused audit
- Review the books of record to identify costs that may be included in the wage data but may be recorded in other accounts
- Examine the payroll hours report to pinpoint hours that may be associated with dollars not actually worked and may be excluded for wage index purposes as benefit hours
- Evaluate the contracted labor and purchased service accounts
Strategy
- Discuss strategic changes to your cost report that incorporates non-allowable A-8 offsets or B-1 allocations into the wage index
Revision process
- Submit detailed revisionsand work papers to your fiscal intermediary
- Negotiate proposed revisionsand adjustments
- Monitor and estimate thewage index and occupational mix adjustment for each public use file throughoutthe revision process until thepublication of the final PPS inpatient hospital rule
