Providing Best-in-Industry Expertise: 

Wage Index Expert Review (WIER)

How We Refine Data

• Many hospitals use outside vendors, including accounting firms, to prepare their Medicare cost reports.  So when asked to have their wage data reviewed for errors, omissions and optimization opportunities, those hospitals routinely say, “My accountant handles that.”  But no matter how good a hospital’s cost report preparer may be (and this is especially true if the hospital uses an outside vendor for this service), he or she is destined to produce a Worksheet S-3, Parts II and III wage data filing that, for a variety of reasons, may not be fully optimized.

  Here's why:  The person or firm preparing a hospital’s cost report can only input the wage data into the Worksheet S-3 exactly as the hospital provides it.  They have no opportunity to refine any of the data unless they perform further research.  If errors, omissions or misclassifications of any wage data exist, those issues will simply be replicated on the Worksheet S-3.

  A few examples of what we do to refine a hospital’s wage data include:

  • Contract Labor – We scrutinize the General Ledger for outside vendor accounts whose salaries and hours are applicable to the wage index, such as pharmacy, nursing, etc.  An outside vendor may not have access to the General Ledger, and therefore must exclude all contract labor from the Worksheet S-3.

  • Wage-Related Costs – We review in detail the General Ledger to ensure that all wage-related costs have been included and properly allocated to the Worksheet S-3.  We allocate wage-related costs to optimize allowable amounts.  For example, costs in excluded areas do not need to be allocated strictly on a salary basis, but rather some costs may be allocated on an hourly basis.  An outside vendor may not have access to the General Ledger to determine if a reallocation of costs is possible.

  • Physician Contracts – We analyze physician contracts to determine if any of the physician salaries and hours apply to Part A Administrative functions, which can be included on the Worksheet S-3.  An outside vendor may not have access to the detail of the physician contracts to determine if any of the salaries and hours are applicable to Part A.  Therefore they must allocate all physician salaries and hours to Part B, which is excluded from the wage index.

  • Additional Data – We review all hospital wage data with a particular emphasis on researching any data that should have been included or modified to increase the hospital’s Average Hourly Wage (AHW).  Outside vendors and even hospital staff who prepare cost reports are often given insufficient information and/or are too busy meeting deadlines to even think about digging into the wage data for missed optimization opportunities.

These illustrate just a few of the many ways your hospital can benefit from participating in R-C Healthcare Management’s Wage Index Expert Review.  The potential benefit is clear – it pays to hire an expert to review your hospital’s wage data submission!

Please e-mail or call us at 800-862-5368  (in Arizona 602-995-9420) for more information.