This Wednesday is the deadline for hospitals to comment on proposed changes to Medicare's wage index, but only a handful have responded-perhaps because hospitals are preoccupied by Congress' work on healthcare reform.
Last week, a staffer in HCFA's hospital payment policy division, who declined to be identified, said she'd received only 15 comments from the nation's 5,400 nongovernmental hospitals about the wage index proposals.
Under the proposed rules, published in the Federal Register in May, HCFA may change the way it calculates a hospital's wage index (June 13, p. 22). The wage index determines about 70% of the Medicare reimbursement hospitals receive, making it a crucial and often controversial element of the payment formula.
Under the proposed regulations, HCFA asked for comments on three wage index proposals. One is M25, which would combine 25% of an individual hospital's specific wage index with 75% of the metropolitan statistical area wage index. Another is M50, which combines the same indexes in a 50-50 split. Third is the State Labor Market Option, dubbed SLMO, which would allow states to craft their own wage index system. Such a system would have to be "budget-neutral," meaning it would not be allowed to raise or lower total program spending.
The M25 and M50 formulas combine three systems that have been "highly criticized," said Dale Baker, president of Indianapolis-based Baker Healthcare Consultants. Those three are the metropolitan statistical area-based system, a hospital-specific wage index and a "nearest neighbors" system. The nearest-neighbors system recently was under consideration by HCFA as a way to base the wage index on hospitals within a certain radius.
Healthcare reform proposals being debated by Congress and a lack of details about the proposed wage index changes are probably behind the shortage of comments, Mr. Baker said. For example, HCFA didn't include enough information in the proposed regulations for an individual hospital to determine whether it would be hurt or helped by the changes, he said.