CMS has started the process to develop the FY 2009 wage index based on wage data from cost reporting periods beginning in the federal FY 2005. If the same methodology is used as for the FY 2008 wage index, the FY 2009 wage index will include an occupational mix adjustment based on the 6-month survey of hospitals covering January 1–June 30, 2006. CMS has posted on its website the timetable for the various steps in the wage index process, as well as public use files (PUFs) containing four sets of preliminary wage index data:

unaudited FY 05 worksheet S-3 wage data;
1st quarter CY 06 occupational mix survey;
2nd quarter CY 06 occupational mix survey; and
combined 6 month CY 06 occupational mix survey.

Pursuant to the timetable, the following dates are critical to hospitals:

December 7, 2007: Deadline for hospitals to request any revisions to their Worksheet S-3 wage data and any changes to the occupational mix data in the PUFs.

March 11, 2008: Deadline for hospitals to submit any requests and supporting documentation (1) to correct errors in the PUFs that will be posted in February due to mishandling of data, or (2) to request revisions of any desk review adjustments made by the Fiscal Intermediary (FI) or Medicare Administrative Contractor (MAC).

April 21, 2008: Deadline for hospitals to appeal FI/MAC determinations by requesting CMS intervention.

The entire timetable can be found at: www.ober.com/shared_resources/news/newsletters/
payment-matters/2007/2009-wageindex-timetable.pdf.

Ober|Kaler's Comments: What is unknown at this time is whether CMS will significantly change the wage index methodology beginning in FY 2009. Congress has ordered CMS to include in its FY 2009 proposed rule (to be published around May 1, 2008) one or more proposals to revise the wage index, including consideration of the MedPAC recommendation that the wage index be based on data from the Bureau of Labor Statistics rather than on hospital cost report data.

It is hard to believe that CMS would totally revise the wage index methodology for FY 2009 without providing for some transition period between the old and new methods. Therefore, hospitals should begin now to review their wage and hour data on their 2005 cost reports and to check the data in the public use file, so that any necessary data change requests can be made timely by December 7th. Unless a hospital complies with all of the above deadlines for requesting changes to its wage data, the hospital subsequently will not be able to appeal to the Provider Reimbursement Review Board any issues of the FI/MAC’s or CMS’s refusal to make changes to the data.