Medicare Wage Index

The Medicare wage index is calculated annually to determine the labor portion of the Diagnosis-related group (DRG) paid to PPS hospitals by CMS for Medicare patients. With each of the 456 CBSAs receiving its own wage index; the differences in the index, and associated payments, are considerable. We conservatively estimate that each 0.010 difference in the wage index equals approximately $70.00 for each Medicare discharge. With the high wage index around 1.8000 and the low around 0.7000, the difference in reimbursement is substantial.

Webdale Healthcare was the first consulting firm to offer hospitals a review of their data from the Form S-3 to optimize it and the resulting reimbursement. Since then we have developed tools and processes to ensure that our clients receive the maximum revenue from Medicare. Each client receives direct attention from a principal of the firm who works with the hospital until the Final Rule is published in August of the following year.

Webdale Healthcare understands that hospitals have different levels of need in preparation of their wage index revisions. Therefore, we offer two levels of consulting service to clients; the extensive Wage Index Expert Review (WIER) or the supporting level Wage Index Improvement Program (WIIP). Some clients opt for using both levels over a multi-year engagement.

Wage Index Expert Review

Webdale Healthcare provides an extensive process called Wage Index Expert Review (WIER).

This program provides:

  • On-site, detailed analysis of participating hospital’s Form 2552, Worksheet S-3, Parts II through IV, and all source data contributing to it.
  • Carefully scrutinize hospital’s data with our proprietary audit program.
  • Trace every line item on the S-3 back to its source data for verification and review for mathematical accuracy and federal regulation compliance.
  • After our experts fully analyzes all of the source data, we then research any out-of-standard areas.
  • In addition, we evaluate other data impacting the wage index that may have the potential to increase the hospital’s average hourly wage and thereby generate additional reimbursement.
  • Our experienced wage index experts work with each hospital’s CFO, payroll, personnel, reimbursement and nursing service departments to ensure we present accurate and optimized data in the Form 2552, Worksheet S-3, Parts II through IV.
  • We work with hospital to prepare revisions, along with support documentation for final submission.
  • After revisions are submitted, we work with hospital’s throughout the FI desk audit, answering questions during the audit; helping with appeals when necessary.
  • Our services continue until revisions are properly reflected in each Public Use File, until the Final Rule is issued in August.

We suggest new clients begin with WIER. In multi-year engagements, hospitals can continue with WIER, or use WIIP in subsequent years; repeating WIER every few years.

Wage Index Improvement Program

We understand that many hospitals have considerable experience with the wage data revision process and may not require the more extensive WIER program. WIIP was developed for experienced reimbursement personnel who may only require help on an overview basis.

WIIP is also an excellent starting point for associations and councils organizing a group initiative which includes:

  • Begins with a seminar/webinar outlining the wage index and factors affecting it, the revision process, items of particular interest and published numbers for the group.
  • All hospitals in a WIIP engagement receive an analysis of their current and prior Worksheet S-3.
  • Comparison of the hospital’s data to that of Webdale Healthcare proprietary database for outliers and appropriateness.
  • Unlimited consultative access via telephone and email for questions and guidance.
  • Ongoing follow-up during the revision process.
  • Aid in revision submission and audit defense, if necessary.
  • Ongoing tracking to assure all revisions are properly reflected in the public use files.
  • As with WIER, the engagement continues until the Final Rule is published the following August.

We suggest that new clients begin with the WIER. In multi-year engagements, hospitals can continue with WIER, or use WIIP in subsequent years, repeating the WIER every few years.