Home Health & Hospice Week

You could finally have the same index as your hospital neighbors.

Hospitals and home care providers will be on a level playing field when recruiting staff, if the Medicare Payment Advisory Commission gets its way.

Congress has required the influential advisory body to produce a report on wage index issues by June 30, MedPAC noted in its March 9 meeting. And the commission plans to recommend a hospital wage index system that doesn't allow for reclassification.

Unfair: Other providers such as home health agencies and skilled nursing facilities "get that pre-reclassification wage index even when the hospital next to you ... is getting a different wage index, a higher wage index," noted MedPAC staffer David Glass in the meeting. "People have raised that as something that they don't think is very fair."

The new system would be based on Bureau of Labor and Statistics and census data rather than solely on hospital cost report data. That could combat the HHS Office of Inspector General's recent claim that wage data from hospital cost reports is inaccurate. Seventeen of 21 hospitals the OIG audited overstated their wage data, the OIG says in a March 14 report.

While MedPAC's proposed system has flaws, "it is a step forward for home care's wage index," judges William Dombi with the National Association for Home Care & Hospice's Center for Health Care Law. The new system would provide more fairness when competing with hospitals for your labor pool and would tone down some of the year-to-year volatility seen in the current index, Dombi tells Eli.

As expected, hospital reps are opposing the revamp. The American Hospital Association and consultant Dale Baker with Baker Healthcare Consulting in Indianapolis spoke out against the changes in the meeting's public comment period.

"The AHA has some major concerns and reservations about the BLS data," AHA's Danielle Lloyd said.

Hospital wage data is very accurate and can be relied upon for wage indexing, Baker contended. The OIG based its report on "raw" data and got misleading results, he added.

Home Health-Specific Index Proposed

Wage index changes might not stop with reclassification. MedPAC is considering recommending a home health-specific wage index based on the BLS data, MedPAC staffer Jeff Stensland indicated in the meeting.

Under the new proposal, "we could readily tailor separate wage indexes for each sector," Stensland told commissioners. "We will be investigating whether there would be enough difference in the SNF, home health and hospital wage index to justify these three different wage indexes."

Action likely: Congress already seems eager to pick up on the wage index issue. On the heels of the OIG's report, Charles Grassley (R-IA), the Senate Finance Committee's highest-ranking minority member and former committee chair, added a wage index measure to the Senate's fiscal year 2008 budget resolution.

The amendment puts aside money to revamp the hospital wage index system. "It's unfair when a government calculation does not work," Grassley says in a release. "This unfairness not only adversely affects the hospital, but it also ultimately affects the community."

Note: The OIG report is at www.oig.hhs.gov/oas/reports/region1/10500504.pdf.