Performance Improvement 2009. What Impact Would Shifting from Centers for Medicare & Medicaid Services' Wage Index to the Medicare Payment Advisory Commission's Alternative Have?


This impact analysis compared the Centers for Medicare & Medicaid Services’ (CMS’) wage index with the Medicare Payment Advisory Commission (MedPAC) recommended hospital compensation index. The Tax Relief and Health Care Act of 2006 required the MedPAC to recommend alternatives for revising the hospital wage index. In developing its recommendations, the Act required CMS to consider MedPAC's work.

Under MedPAC's recommended index, the differences between hospitals with the highest and lowest wage index would be reduced. Furthermore, adopting MedPAC's recommended index would lead a substantial number of hospitals to experience change in their index values of more than 5 percent. As part of ongoing work, the study is investigating reasons for underlying differences between the CMS wage index and MedPAC's compensation index. The latter incorporates Bureau of Labor Statistics, not CMS, wage data.

Report Title: Impact Analysis for the 2009 Final Rule: Interim Report Revision of Medicare Wage Index
Agency Sponsor: CMS-ORDI, Office of Research, Development, and Information
Federal Contact: Craig Caplan, 410-786-4165
Performer: Acumen
PIC ID: 8958

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"PerformanceImprovement2009.pdf" (pdf, 1.26Mb)

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