Skip to Main Content

Wage Index

FY 2020 Geographic Reclassification Deadlines

Deadline to submit an application for a FY 2020 MGCRB reclassification and a request for cancellation of a withdrawal or termination (reinstatement): September 4, 2018

Date of FY 2020 Wage Index Reclassification Determinations Issued by the MGCRB: TBD

Deadline for Hospitals to appeal FY 2020 MGCRB Wage Index Reclassification Determinations: TBD (Per 412.278, 15 days after Determinations Issued by the MGCRB)

Deadline to withdraw an application or terminate an approved 3-year MGCRB reclassification (must be received by the MGCRB with a copy to CMS at wageindex@cms.hhs.gov within 45 days from the date NPRM is issued): TBD

Deadline to waive Lugar/accept out-migration adjustment or reinstate Lugar/cancel outmigration adjustment(must send written notification to CMS at wageindex@cms.hhs.gov within 45 days from the date of public display of NPRM): TBD. To ensure proper accounting, we request hospitals to include their CCN, and either “waive Lugar” or “reinstate Lugar”, in the subject line of these requests.

Deadline for hospital to be treated as rural in the FY 2020 wage index and budget neutrality calculations (412.103 lock in): TBD

Note: The MGCRB is independent of CMS and the deadlines listed on this website are a courtesy only. The MGCRB makes the final decision regarding the date of the deadlines above and whether a request is timely. The public should confirm any deadline above with the MGCRB. 

For complete details on MGCRB reclassification, please click on the link to the MGCRB web page in the Related Links section below.


Note: To view the wage index data files, see the "Wage Index Files" link in the left navigational area of this page or see the "Related Links Inside CMS" section below.

Section 1886(d)(3)(E) of the Social Security Act requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary must adjust the standardized amounts “for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level.”  This adjustment factor is the wage index.  We currently define hospital geographic areas (labor market areas) based on the definitions of Core-Based Statistical Areas (CBSAs) established by the Office of Management and Budget and announced in December 2003. The wage index also reflects the geographic reclassification of hospitals to another labor market area in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act.

The Act further requires that we update the wage index annually, based on a survey of wages and wage-related costs of short-term, acute care hospitals.  Data included in the wage index derive from the Medicare Cost Report, the Hospital Wage Index Occupational Mix Survey, hospitals' payroll records, contracts, and other wage-related documentation.  In computing the wage index, we derive an average hourly wage for each labor market area (total wage costs divided by total hours for all hospitals in the geographic area) and a national average hourly wage (total wage costs divided by total hours for all hospitals in the nation).  A labor market area's wage index value is the ratio of the area's average hourly wage to the national average hourly wage.  The wage index adjustment factor is applied only to the labor portion of the standardized amounts.

.