Wage Index Improvement Program

The Wage Index Improvement Program (WIIP) provides a detailed review of wage-related data hospitals include in Medicare cost reports to the Centers for Medicare & Medicaid Services (CMS).

California hospitals face a potential $55 million reduction in Medicare payments due to a budget neutrality factor related to the rural wage index. Budget neutrality is now achieved on a full state specific basis, whereby the California impact is absorbed by California hospitals alone. In the past, budget neutrality was achieved by a national adjustment by which approximately 2,500 providers shared in "funding" neutrality.

An estimated 100 urban California hospitals, known as Rural Floor Recipients (RFRs), are paid or will be paid based on the rural wage index that is higher than their urban area index.

This year HASC, CHA, and the regional associations in San Diego and Northern California are working with HFS Consultants, a firm with experience dealing with wage index matters.

The HFS study includes: on-site interviews with key hospital management personnel; in-depth analysis of wage index source information; gathering supporting documentation for findings that typically include, but are not limited to, contract labor, wage-related costs, hours related to paid salaries, physician Part A costs, and home office wage-related cost allocation; preparation and filling of wage data revisions; comparative analysis by peer group and annual trending; assistance in filing appeals as needed; identification of other wage reporting issues; and communication of other reimbursement strategies that may benefit the hospital.

Study funding is based on hospital size, regardless of whether it receives rural floor funding; since all hospitals share in the benefits.