Reforming the area wage index (AWI) formula has been a top priority for decades for THA and its members. Under the current AWI methodology, hospitals in states like Tennessee that have a large number of rural counties served by small community hospitals have been receiving disproportionately and unfairly low Medicare reimbursement.
Please join THA and hospitals across the state by thanking the Administration for finally addressing the issue in the 2020 inpatient prospective payment system (IPPS) proposed rule. Take this opportunity to share how these changes will help your hospital continue to provide high-quality care in your communities by retaining and investing in your dedicated workforce.
Comments on the rule are due June 24. THA needs your help spreading the news and sharing your stories.
Overview of the Proposed CMS Changes to AWI
The AWI language in the proposed rule represents the first meaningful effort by any Administration to address the flawed system and, if made final, will provide much needed relief to many hospitals in Tennessee, beginning Oct. 1.
The proposal would:
- Increase the wage index for hospitals with a wage index value below the 25th percentile (currently .8482). These hospitals’ wage indexes would be increased by half the difference between the otherwise applicable wage index value for that hospital and the 25th percentile wage index value across all hospitals.
- Decrease the wage index for hospitals above the 75th percentile (currently 1.0351) to offset the increases to the hospitals below the 25th
- Make the revised program operational for four years to allow increases in employee compensation in those areas below the 25th percentile enough time to be reflected in the wage index calculation.
- Remove the urban to rural reclassification option under the “rural floor” provision of the current law, so an urban hospital will not be able to reclassify to a rural hospital for purposes of raising the rural floor.
- Cap the decrease in AWI in FY 2020 to 5 percent to help phase-in any negative impact on hospitals that experience a decrease in their wage index from 2019 to 2020.
- Note the adjustment is a fair and reasonable glidepath for transition. The proposal is a four-year plan, with hospitals at the upper end of the AWI spectrum capped at no more than a 5 percent reduction in their AWI in 2020. Reinforce appreciation for this short-term adjustment while long-term reform is pursued.
Social Media Push
In addition to submitting a traditional comment letter to the Centers for Medicare & Medicaid Services (CMS) (see below for CMS comment letter talking points), hospitals also are strongly encouraged to support THA’s AWI social media campaign by actively posting your AWI messages and thanking CMS Administrator Seema Verma for this important change. Please also recruit your board members, county executives and other local leaders to use the hashtags below to support this initiative.
Please use the following hashtags on social media when you make or share a post about the proposed rule and be sure to tag THA: #RethinkingRuralHealth, #HealthyHospitals and #AreaWageIndex
Sample Social Media Posts:
Below are some suggested social media posts to share. Make them your own or use these samples as inspiration for other posts.
- “Thank you @SeemaCMS, @SecAzar and @POTUS for taking the first steps to reform the Medicare wage index. This will allow [insert hospital tag] to recruit and retain great staff and invest in our [rural] communities. #rethinkingruralhealth #HealthyHospitals #areawageindex”
- “Fixing the wage index will protect my community hospital from closing. Thank you @SeemaCMS for #RethinkingRuralHealth. #HealthyHospitals #AreaWageIndex”
- “Thank you for changing the wage index to ensure access to high quality health care in (city/county/area) and across our state #RethinkingRuralHealth #HealthyHospitals #AreaWageIndex”
Please also plan to retweet THA’s social posts leading up to June 24 and beyond to continue to encourage the Administration.
Do not forget to follow THA on LinkedIn, Facebook, Twitter and Instagram!
LinkedIn: Tennessee Hospital Association
Facebook: Tennessee Hospital Association
Download and customize your own AWI Graphics
Thank You Videos:
We would encourage hospitals to film and post videos to social media thanking Administrator Verma, U.S. Senators Lamar Alexander and Marsha Blackburn and the entire Tennessee congressional delegation for their efforts.
Top Line Messages for THA and Hospital CEOs to other stakeholders and press
- Hospitals care for more Medicare patients than any other group so any changes to Medicare reimbursement are very important.
- The area wage index is part of a decades-old, complex formula used to determine how much hospitals are paid. Because of flaws in the formula, hospitals in Tennessee have seen their Medicare payments decrease year after year while their costs for qualified, skilled staff have increased dramatically.
- Over the last 10 years, hospitals in Tennessee have lost $300 million because of the flawed Medicare model.
- The Centers for Medicare & Medicaid Services (CMS) has proposed to help hospitals in states like Tennessee, which are at the bottom of the formula.
- The problem is especially bad in rural Tennessee, where 10 hospitals have closed in recent years. These proposed changes by CMS would be a great step forward in protecting access to hospital services in rural Tennessee.
- The problem will continue to worsen over time if the proposed changes are not implemented in October.
Traditional CMS Comment Letter Template:
[Hospital Letter Head]
May XX, 2019 e-comment submitted electronically
The Honorable Seema Verma
Centers for Medicare & Medicaid Services
Room 445-G, Hubert H. Humphrey Building
200 Independence Avenue, S.W.
Washington, DC 20201
RE: CMS- 1716-P Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospitals Prospective Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates
Dear Administrator Verma:
[Hospital Name], on behalf of its [number of doctors, nurses, employees] and [name of community/county served], appreciates your decision to address the fundamentally flawed Medicare wage index. The wage index has disadvantaged hospitals like us for decades, and we applaud CMS for proposing relief through their “Agenda to Re-think Rural Health.”
Adjusting the wage index for states disadvantaged by the current formula is a fair way to maintain wage index protections for hospitals in states like Tennessee that has seen wage indexes decline year over year.
[Hospital Name] is committed to providing high quality, care to our patients 24 hours a day, 7 days a week, in our community. However, the downward spiral of the current AWI formula causes financial strains that has resulted in [insert information about changes you’ve had to implement because of low Medicare reimbursement].
- Tell your story
- What have you done to survive under the current wage index?
- Highlight real world implications of the wage index disparities.
- What have you done to stay open? Local taxes? Cost cutting?
- Have you had to reduce services?
- Are your margins declining?
- Put a human face to your story
- What would happen if the changes were not made?
- What would your community look like without your hospital? Who would take care of your community?
- Are you the only hospital in the area or in the county? How many people would lose access to care if you closed?
- Are there patient stories to highlight this point?
- For example: A snake bite, farming accident, car crash, heart attack patient that would have died in transport if they had to go to another hospital if yours closed?
- For example: Is there no longer a mammography machine in your community because the hospital cannot afford to replace it?
- How many new nurses could you hire? Or provide higher wages for your community?
Since 2010, 13 Tennessee hospitals have closed, with 10 of those serving rural communities, and the wage index is a significant factor. We do not want another hospital to close and jeopardize access to care.
Again, thank you for recognizing the Medicare wage index is flawed and for acting to provide relief to hospitals in the FY 2020 IPPS Rule (CMS –1716-P). This decision will create a level of stability for low wage index hospitals like [Hospital Name] and ensure every citizen has access to high quality care in our community.
Comments and social media posts on the proposed rule will be due by June 24. For more information, contact Mike Dietrich at THA, 615-401-7459.