In its 2024 Final Rule, the Centers for Medicare and Medicaid Services changed its wage index calculation in response to numerous lawsuits. Stakeholders will need to plan for the possibility of significant changes in facility reimbursement. This paper discusses how the wage index calculation works, and provides a case study of the large changes in New York. We discuss:
- What is Medicare’s Hospital Wage Index
- Recent wage index changes
- Area wage index calculation
- Reclassifications and their impact on the 2024 rural wage index calculation
- Case Study: A hospital’s use of reclassification rules to maximize reimbursement
- Commentary and observations