Home Health & Hospice Week

 Wage Index Makes a Big Difference

Depending on changes to your local wage index, you could see a significantly higher payment rate in 2004 - or a much lower one.

Home health agencies serving rural areas of the Virgin Islands will see a whopping 16.27 percent increase to their wage index, while HHAs furnishing services to rural areas of Puerto Rico and Hawaii will see a 9.25 percent decrease and 7.71 percent decrease, respectively, to their indices, according to the notice.

Metropolitan statistical areas that win big in the wage index update include Champaign-Urbana, IL (a 14.28 percent increase to an index of 1.0635), Lubbock, TX (a 14.17 percent increase to 0.9646) and Hagerstown and Washington, MD (a 10.79 percent increase to 0.9268).

Less fortunate MSAs are Dover and Kent, DE (a 9.13 percent drop to an index of 0.9356), Galveston and Texas City, TX (an 8.22 percent decline to 0.9465) and Jonesboro and Craighead, AR (an 8.02 percent decrease to 0.7749).

To figure the payment rate for an individual patient, you first must multiply the base rate ($2,230.65 in FY 2004) by the patient's case-mix weight. The case-mix weight is determined by the home health resource group assigned, which in turn is determined by the patient's OASIS assessment.

You then divide the number into a labor and non-labor portion - CMS has kept that ratio at 0.77668 and 0.22332 respectively in FY 2004 (see charts, "Fiscal Year 2004"). After multiplying the labor portion by the wage index for the area in which the service was rendered, an agency adds the two portions back together to arrive at the final payment amount.