The Medicare Payment Advisory Commission floated a draft recommendation that would allow the CMS to use wage data from the Bureau of Labor Statistics rather than from hospital cost reports to compute the hospital wage index. MedPAC said that under the current approach, which also requires a separate adjustment for occupational mix, wage data are often volatile, riddled with exceptions and may not reflect input prices.
By using BLS data, MedPAC said the data collected would be more representative of the entire market, less likely to change over time and would automatically adjust for occupational mix. The new formula could also be tailored to other provider types and would be less of a data burden on hospitals, according to a March 9 MedPAC presentation.
The American Hospital Association has convened its own work group of state, regional and metropolitan hospital association executives to consider possible reform of the wage index. In a letter sent to MedPAC Chairman Glenn Hackbarth, the AHA said it has several concerns with the draft proposal, including that the recommendation would allow nonhospital wages to influence the final equation. -- by Matthew DoBias