Summary of Proposed 2015 Changes in Medicare Wage Index
The Centers for Medicare and Medicaid Services (CMS) is proposing the use of a revised system of delineating the Core Based Statistical Areas (CBSAs) used to determine the Medicare wage index in a geographic region. For member convenience, LeadingAge NY has summarized the impact of the proposed changes by New York counties; please click here for the Summary of Wage Index Changes.
In addition, LeadingAge has posted a spreadsheet that allows members to calculate the total impact of the proposed rule on Skilled Nursing Facility (SNF) Prospective Payment System (PPS) rates for the federal fiscal year starting Oct. 1, 2014. This calculation tool incorporates the proposed transitional wage index. To access the LeadingAge SNF PPS rate calculation tool, you may click here or go to the LeadingAge national website and look under the Members tab for Nursing Homes and then Payment and Finance. Please contact me if you have difficulty accessing the spreadsheet.
In the proposed rule, CMS is phasing in the change in definition of CBSAs to correspond to the new Office of Management and Budget (OMB) guidelines. The two most critical pieces to keep in mind are that some providers may have changed from rural to urban or vice versa, and the transitional wage index will differ from what the index would have been without the proposed change.
According to CMS:
The Office of Management and Budget (OMB) issued OMB Bulletin No. 13-01, which contained a number of significant changes related to the delineation of Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, and guidance on uses of the delineation of these areas. To align with these changes, CMS is proposing revisions to the wage index based on the newest OMB delineations for the FY 2015 SNF PPS wage index. CMS is also proposing to use the new OMB delineations to identify a provider’s urban or rural status for the purpose of determining which set of rate tables would apply to the provider. This is consistent with other Medicare payment rules which will also include similar revisions this year as a result of the new OMB delineations.
In an effort to mitigate the potential negative wage index impacts for some providers of this proposed adoption of the revised OMB delineations, CMS is proposing to implement these changes by providing a one-year transition with a blended wage index for all providers. The wage index for each provider would consist of a blend of 50 percent of the FY 2015 wage index using the current OMB delineations and 50 percent of the FY 2015 wage index using the revised OMB delineations. A similar transition wage index was used when CMS adopted the OMB’s Core-Based Statistical Area (CBSA) definitions in FY 2006.
Source: CMS SNF PPS Fact Sheet
The LeadingAge NY Summary of Wage Index Changes provides a listing of these changes broken down by county. The wage index is used as a multiplier against the base PPS rates to adjust for regional wage differences. It is important that members look for their specific county within each CBSA to determine the impact on your organization for both SNF PPS rates effective Oct. 1, 2014 and home health agency PPS rates effective Jan. 1, 2015. In particular, both Jefferson and Yates counties moved from “Rural” to “Urban” with a resulting net positive impact on the wage indices for these areas.
Under the heading of “FY 2014 CBSA Delineations/FY 2015 Data” the chart lists what the “Urban/Rural” status and wage index would be without the transition. Under the heading of “FY 2015 CBSA Delineations/FY 2015 Data” are listed the “Urban/Rural” status and indices under the proposed change.
Finally, please note that the base year hospital wage data being used to calculate the Medicare wage index is being moved from 2010 to 2011 under the proposed rule.
Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827