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Support of the Medicare Wage Index Change

Posted on June 11, 2019
From the office of Jason Pilant, President and Chief Administrative Officer of Roane Medical Center:

Roane Medical Center and Covenant Health have long advocated for changes to the Medicare Wage Index (MWI) formula.  This severely flawed formula has negatively impacted hospitals in East Tennessee for over a decade.  Finally, after years of effort, on April 23, 2019, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule to increase wage index values for hospitals with a wage index value below the 25th percentile (comparison below)  The agency also would decrease the wage index for hospitals with values above the 75th percentile to make this policy budget-neutral.  CMS proposes that this policy would be effective for at least four years, beginning in October 2019.

A few points regarding this:

  • Knoxville area hospitals only receive  71.68% of labor portion of rate (comparisons below).
  • CMS has issued a proposed rule increasing rate for those hospitals that fall below the 25th percentile (0.8482) and providing comment period.
  • Hospitals index will increase by half of the difference. 
  • Knoxville (and Roane) hospitals’ index would increase from 0.7168 to  0.7825. 
  • The proposed CMS rule  must be budget neutral. 

While this is not a permanent solution, this is a very significant first step toward a more fair process to reward hospitals that work aggressively to control costs.  This is only a proposed rule and CMS is now accepting public comments on the proposal until 4:59 pm EDT June 24th, 2019.  CMS must consider all the public comments it receives before issuing the final rule, likely in August or September.  The hospitals that are negatively impacted by this change are primarily located in politically powerful states such as California, New York and Massachusetts, and there is no doubt they will aggressively lobby CMS to not implement this proposal.  Therefore, it is critically important that CMS hear from everyone in our local communities if possible. 


Please Use This Link https://www.regulations.gov/document?D=CMS-2019-0073-0003


I would like to ask you to please write to CMS and encourage them to implement the rule as proposed.  Submitting comments is easily done online (link above)) and will take as little as one minute of your time.  For your convenience, people can cut and paste this wording, I strongly support the CMS proposed rule CMS-1716-P and its proposed changes to the Medicare Area Wage Index” in lieu of the attached support letter. 

Three important things to remember: 
1. Deadline

Comments must be received no later than 4:59 p.m. EDT on June 24, 2019.

2. Publicly available

All comments received during the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. 

 3. Confirmation

The number of positive comments CMS receives is very important!  


Thank you in advance for your attention to this critical matter regarding healthcare in our area.




Jason Pilant MBA, FACHE


Roane Medical Center