Porsche vs. Honda: Spend Less to Get More!

When it comes to purchasing a car, most people budget for features they want in a vehicle, such as automatic transmission, air bags and power door locks/windows. There might be additional upgrades available, but they aren’t necessary for you to get around. As long as the vehicle enables you to get from point A to B, you’re good to go. A similar situation exists for Medicare hospitals in regards to nursing personnel. CMS wants you to employ the appropriate level of nursing staff for the care to be provided.

Every three years, a Prospective Payment Hospital (PPS) hospital is required to submit a survey that identifies the wages and hours of its employees by certain job categories. CMS then uses this data to come up with a factor that either increases or decreases the wage index. An increase can occur if a hospital uses lower wage LPNs and aides, rather than RNs. CMS does this to equalize the wages paid as a hospital should not be “rewarded” for using all RNs when a lower professional level is appropriate.

The survey is due to your MAC by July 1, 2017.

Tip #23:

Start reviewing your wages and hours by job category early to ensure you have the most accurate data to submit for Occupational Mix.

Further guidance should be available on the website of the Medicare Administrative Contractor (MAC) you are assigned to.

Questions? Please contact Marie White at 612.253.6546 or mewhite@eidebailly.com.

Wage Index Contract Labor – It Takes a Village

Marie White

Marie White

There’s an expression, “It takes a village to raise a child.” The same could be said for a hospital—it takes a village to run a hospital. Beyond the nurses and doctors who take care of the patients, there are housekeepers, radiology and laboratory techs, maintenance folks, and a myriad of others who all contribute to the day-to-day operations of the hospital.

Worksheet S-3, Part II is used to report wage and hour data which is needed to update the hospital wage index applied to the labor-related portion of the national average standardized amounts of the PPS. It is important for hospitals to ensure that the data reported on Worksheet S-3, Parts II, III and IV, are accurate.

Tip #4:

For Wage Index contract labor you may include clinical/patient care-related and/or executive/administrative services (Pub 15-2, §4005.2).

Further guidance on the types of expenses that should be included on S-3, Part II can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-2

Questions? Please contact Marie White at 612.253.6546 or mewhite@eidebailly.com.