Home Health & Hospice Week

Will unfair exceptions finally go away?

CMS is recommending a new hospital wage index system to Congress, but don't expect it to remedy the home care industry's wage index problems.

In a report submitted to Congress this month, the Centers for Medicare & Medicaid Ser-vices offers the "Commuting Based Wage Index" system for hospitals. The new system aims to eliminate problems like significant differences in wage index levels for nearby hospitals. "The CBWI is based upon actual employment patterns of hospitals," Health and Human Services Secretary Kathleen Sebelius says in an April 11 letter to congressional leaders.

The new wage index system might not actually change much for home care providers. CMS could apply the new CBWI to non-hospital providers via a number of proximity-based methods, the report suggests. Or "adopting the CBWI for hospitals would not preclude continuing to use the current Medicare pre-reclassification wage index for these other providers," CMS adds.

Home care providers are unlikely to see any solutions tailored to them. "Given that the Hospice and Home Health payment methods use the beneficiary residence or place of service to adjust payments, the relevant commuting patterns would be from the employee residence to the beneficiary residence," the report notes. "This would add a new level of complexity to the collection of commuting data and is unlikely to be feasible."

Home care providers criticize the current system's year-to-year volatility. But they also decry how competing employers -- hospitals -- can benefit from a wage index exception while they can not.

That element might go away under the CBWI, the report suggests. "Multiple exceptions ... have been implemented in an attempt to correct perceived inequities. However, many of these exceptions and adjustments may have created or further exacerbated distortions in labor market values. The issue of 'cliffs,' or significant differences in wage index values between proximate hospitals, can often be attributed to one hospital benefitting from such an exception and adjustment when another cannot," the report observes. "These existing statutory exceptions to the wage index may likely no longer be applicable and should therefore be reviewed for their continued relevance."

A link to the report and its companion documents is at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Reform.html -- scroll down to "Downloads."