The CMS will issue a notice in the next few days clarifying how hospitals can qualify for wage-index reclassification. The CMS last month put out a policy allowing hospitals in low-wage areas to request that Medicare consider them part of a community with higher wages, which would raise the applying facility's reimbursement. However, the CMS received several questions and complaints about the policy and will clarify some "technical issues," CMS acting Administrator Dennis Smith told the Senate Finance Committee. Smith later told Modern Healthcare that the changes are unlikely to significantly affect which hospitals will be eligible for reclassification. He did not specify what the changes would be. Under one set of criteria the CMS outlined last month, the applying hospital must be in a state with fewer than 10 people per square mile. According to Census Bureau data, only five states qualify -- Alaska, Montana, North and South Dakota and Wyoming. Some additional hospitals may qualify under separate criteria requiring that the applying facility's average hourly wage be at least 82% of the three-year average hourly wage of the region it wants to join. The Medicare reform law authorizes $900 million over three years to finance the reclassifications.
In the same hearing, Sen. Kent Conrad (D-N.D.) told HHS Secretary Tommy Thompson that the reform legislation would never have passed the House or Senate if Congress had known how expensive it would be. "We're going to open up the bill this year," Conrad said. Thompson said the Bush administration has no interest in revisiting the legislation. Recent White House estimates put the 10-year cost of the law at $534 billion instead of the $395 billion budgeted by Congress. -- by Jeff Tieman