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Contract Labor: Impact on Wage Index

Outsourcing is a common practice in all areas of business, including the healthcare sector. Although this is a major expense for a hospital, it can have an effect on the wage index factor impacting Medicare reimbursement. The wage index factor is determined through a hospital’s wage index average hourly wage which includes both employees on the hospital payroll and certain contracted vendors. This factor is used to calculate the wage component of a hospital’s DRG payment rate. If a hospital’s contract labor is identified and reported correctly, it could raise its wage index factor significantly.

Blue & Co.’s Wage Index team has significant experience in identifying contract labor for reporting on the Wage Index Survey. We can also assist in answering questions about how CMS uses the Wage Index Survey and how it impacts Medicare reimbursement.

We can help ensure you are in compliance with CMS regulations and work with your hospital to appropriately capture all the information required.

Please contact one of the following people if you would like more information:
Carolyn Chaplin at cchaplin@blueandco.com
Kyle Smith at kcsmith@blueandco.com

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