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IOM reports on proposed Medicare geographic adjustments

July 23, 2012
Most hospitals would see Medicare inpatient prospective payment system payments (PPS) increase or decrease by less than 5% if the Centers for Medicare & Medicaid Services adopted changes to the hospital wage index proposed last year by the Institute of Medicine (IOM), according to a report released last week by the IOM committee.

The committee last year proposed moving to one source of wage and benefits data for the hospital wage index and physician geographic practice costs indexes; changing to one set of payment areas and labor markets; using smoothing techniques based on commuting patterns to lessen wage differentials across geographic boundaries; and expanding the range of occupations included in the index calculations.

The AHA has a task force on the Medicare area wage index.

The task force will review the IOM analysis and its impact on hospitals.

For more on the report, visithttp://iom.edu/Reports/2012/Geographic-Adjustment-in-Medicare-Payment-Phase-II.aspx.