The expression “Back to the drawing board” is associated with failure of a plan or design and the need to start fresh. The phrase actually originated as the caption to a cartoon in a 1941 New Yorker magazine. The cartoon shows military men racing toward a crashed plane and a man, with a roll of plans under his arm, walking away saying “Well, back to the old drawing board!”
CMS often takes this approach in determining how to reimburse providers for Medicare services, including how wage data is handled for Inpatient Prospective Payment System (IPPS) hospitals.
The reporting of wage index data in one form or another has been required since the implementation of DRGs and the IPPS in 1983. Initially, CMS collected the data every few years, but in 1989 Congress passed legislation directing CMS to update the index annually. The first Medicare wage data was from 1990 cost reports and was used to adjust 1994 IPPS rates. This four-year lag continues today due to the length of the cost reporting cycle and the need to allow time for review and correction.
An occupational mix adjustment was introduced also, but was not implemented for various reasons until 1990 with the passage of the Benefits Improvement and Protection Act (BIPA). BIPA mandated the collection of data on the occupational mix of employees’ data via a survey every three years.
The next occupational mix survey is due July 3, 2017. Hospitals paid under IPPS must submit wage and hour data for full-time, part-time, contracted employees, and Home Office allocated salaries.
Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:
Questions? Please contact Marie White at 612.253.6546 or firstname.lastname@example.org.