The Provider Reimbursement Review Board ruled in favor of twelve acute care hospitals located in the Norfolk area in a case involving the Medicare wage index paid to those hospitals.  Norfolk MSA Wage Index Group, PRRB Dec. No. 2010-D41 ( Aug. 3, 2010).  The CMS Administrator  declined to review the case, which means that the Board decision is final.  The decision will result in approximately $2.3 million in additional Medicare reimbursement to the Norfolk hospitals.

The case involved the accuracy of the wage index paid to the hospitals in federal fiscal year 2004. Three of the hospitals had requested that the Medicare Fiscal Intermediary correct their wage data to add additional costs. The Fiscal Intermediary audited the hospitals’ documentation supporting the costs and denied the request. Because an area’s wage index is based on the wage data for all hospitals located in the area, the wage index for the Norfolk area was adversely affected and all of the Norfolk acute care hospitals appealed the decision to the Board.

At issue were contract labor costs, claims associated with the hospitals’ self-insured health plan, and home office costs. The Fiscal Intermediary’s general contention was that the documentation submitted by the hospitals was incomplete. The Board decision is significant because it stated that “the Intermediary has a duty to follow up and to make inquiries seeking clarification and additional documentation, especially on minimal data elements. . .”

Please contact Barbara Straub Williams at Barbara.Williams@ppsv.com or 202. 872.6733 with any questions.

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