Wage Index

Section 1886(j)(6) of the Social Security Act (the Act) requires the Secretary to adjust the proportion of rehabilitation facilities’ costs attributable to wages and wage-related costs by a factor reflecting the relative hospital wage level in the geographic area of the  inpatient rehabilitation facility (IRF) compared to the national average wage level for those facilities.  We use CBSA labor market area definitions and the prior year’s pre-floor, pre-reclassified acute care hospital inpatient wage index to adjust IRF payments. Any adjustments made under Section 1886(j)(6) of the Act for a fiscal year are done in a budget neutral manner.