Skip to Main Content
Don't have an account? Create Account

CMS Revises Medicare DSH, Wage Index Figures

In a correction notice effective Oct. 1, the Centers for Medicare & Medicaid Services (CMS) makes numerous revisions to the fiscal year 2017 Inpatient Prospective Payment System final rule.

While most of the revisions are minor typographical changes, the most notable changes include those to the hospital wage index and Medicare disproportionate share hospital (DSH) payment calculations. CMS says it incorrectly calculated Factor 3 — each hospital’s uncompensated care share — for some hospitals, resulting in the need to recalculate the factor for all hospitals. The agency uses Factor 3 to determine the amount of DSH uncompensated care payments it distributes to each hospital. The updated Factor 3 numbers for all hospitals are available in revised Table 18 of the final rule.

Additionally, CMS had provided the incorrect wage index reclassification status of four hospitals in the final rule. CMS corrects the reclassification status of these hospitals in the correction notice and recalculates the final wage indexes for all hospitals. Revised wage index information is available in Table 2 of the final rule.

As a result of wage index and Medicare DSH Factor 3 changes, CMS recalculated and made minor changes to the budget neutrality factors, the fixed-loss cost threshold for outliers, and the national operating standardized amounts.

Contact Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

Share

About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.