Preliminary Wage Index Data PDF Print E-mail

Preliminary Wage Index Data for the Development of the Federal Fiscal Year (FFY) 2010 Wage Index

These reports show the preliminary 2006 Cost Report Worksheet S-3 data released by the Centers for Medicare and Medicaid Services (CMS) on October 6, 2008.  This data is the first in a series of wage data public use file (PUF) releases to be published throughout FFY 2009 and will be used to develop the final FFY 2010 Medicare wage indexes.  The Wage Index Reports are intended to give hospitals a way to review their preliminary wage data in a readable format, with comparisons to their CBSA, State, and the US.

Under CMS’ hospital wage index development timetable, hospitals have until December 8, 2008 to submit requests to their fiscal intermediary (FI) to make corrections to this wage data.

Data Source:  The preliminary 2006 wage data is taken from Worksheet S-3 from the 2006 Cost Reports submitted to HCRIS through June 30, 2008.  The final 2005 wage data is taken from the 2005 Cost Reports as revised and finalized for the FFY 2009 wage indexes.

Table 1:  The first table includes all lines from Worksheet S-3 Part II of the Cost Report.  This report is intended to provide a comparison of the preliminary 2006 and final 2005 wage data that each hospital submitted to CMS.  This report can be used to review the preliminary 2006 wage data release and highlight potential errors in the reporting of the Worksheet S-3 data using variances.

The analysis of wage-related costs at the bottom of the table is intended to provide a general idea of how total salaries compare to wage-related costs.  As a general rule, the ratio of wage-related costs (Lines 13-20) to total salaries (Line 1) should be greater than 20%. 

Table 2:  The second table includes only lines relevant to the wage index calculation from Worksheet S-3 Part II of the Cost Report.  This report is intended to provide a comparison of the preliminary 2006 wage data for the hospital, its Core-based Statistical Area (CBSA), State, and the Nation. This report will help in the review of the preliminary 2006 data release, allowing the user to focus on the areas where the average hourly wage (AHW) or ratio of fringe benefits to salaries are significantly different from the CBSA, State, or Nation.

The analysis at the bottom of this report compares the preliminary 2006 and final 2005 AHWs for the hospital, its CBSA, State, and the Nation.  The AHW provided on these final lines (highlighted) is calculated using CMS’ methodology of total salaries and hours adjusted to remove teaching, Certified Registered Nurse Anesthetists (CRNA), Part B, and excluded areas:

((Line 1 + Line  9 + Line 13) – (Line 3 + Line 6)).

This AHW calculation does not take the final steps in CMS’ methodology to allocate overhead costs and overhead wage-related costs to areas excluded from the AHW calculation and does not incorporate the common period adjustment.

Note:  Table 1 shows the changes to all lines from Worksheet S-3 Part II of the Cost Report, while Table 2 looks specifically at the Worksheet S-3 Part II lines used in CMS’ wage index calculation.  Therefore, the percentage change in AHW shown on Line 1 of Table 1 may not be comparable to the percentage change in the AHW calculated on Table 2 due to the addition or subtraction of individual Cost Report lines.