CMS Turns the Page on the Wage Index—Summary of Recent, Multi-Billion Dollar Changes to Medicare's Wage Index Policies
- October 01, 2023
- Daniel J. Hettich , King & Spalding LLP
- Alek Pivec , King & Spalding LLP
The wage index dictates how billions of Medicare dollars are shuffled around the country to reimburse hospitals for their labor costs. As such, it can fairly be considered one of the most consequential adjustments to the inpatient and outpatient prospective payment systems (IPPS and OPPS). As a zero-sum game, the wage index is also controversial. Every dollar that the wage index allocates to hospitals in one geographic area is deducted from what would have otherwise been allocated to hospitals outside of that area.
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