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Michigan hospital association

Federal Fiscal Year 2016-2018 Occupational Mix Adjustment Survey April-May 2014. By DALE E. BAKER BAKER HEALTHCARE CONSULTING, INC. Michigan hospital association. Michigan Hospital Association: Vickie Kunz Email – vkunz@mha.org Telephone – 517-703-8608

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Michigan hospital association

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  1. Federal Fiscal Year 2016-2018 Occupational Mix Adjustment Survey April-May 2014 By DALE E. BAKER BAKER HEALTHCARE CONSULTING, INC. Michigan hospital association

  2. Michigan Hospital Association:Vickie KunzEmail – vkunz@mha.orgTelephone – 517-703-8608 Consultant:Dale E. BakerBaker Healthcare ConsultingEmail – dbaker@baker-healthcare.comTelephone – 317-631-3613 CONTACTS

  3. CMS used Bureau of Labor Statistics (BLS) data • Strategy is reverse logic! • We need to: • Minimize RN hours • Maximize nursing aides, orderlies and attendants, and medical assistants • Our comments: • For computing the OMA – Centers for Medicare & Medicaid Services (CMS) uses the National Average Hourly Wages (AHW). Local areas have little impact on National. • Our focus is on hours but we report salaries (excluding fringes) including agency nursing fees (travelers, registry, per diem & contract employees) as well as hours, including vacation, holiday & sick hours and pay. Medicare wage index occupational mix adjustment (OMA)

  4. Carefully consider the classifications for the OMA Survey – for calendar 2013 to be submitted by 7/1/14. Direct input from Nursing Administration Executive(s) is needed – nursing model and roles will vary from hospital to hospital. Prepare Nursing Administration Executive(s) to respond to Medicare Administrative Contractor (CMS auditors) questions if asked (along with finance personnel). We do not seek uniformity – Nursing roles vary hospital to hospital. OBJECTIVES OF OMA PROJECT

  5. A wage index is computed for each metropolitan area and statewide rural areas. The wage index adjusts the "Labor Related Portion" or either 62% or 69% of the DRG payment. Computation of current Detroit-Livonia-Dearborn (FFY 2014) wage index: AHW based on the acute care hospitals in the Detroit area $35.6582 Divide by National AHW FY 2014 ÷38.3698 Budget neutrality Factor x .99015 Computed Detroit natural wage index – FY 2014 .9201 The above average hourly wage includes certain fringe benefits. CMS applies the OMA when computing the AHW and the wage index. This adjustment is not transparent. THE WAGE INDEXWHAT IT IS & WHY IT’S IMPORTANT

  6. Academics thought small rural hospitals had lower skill mix level and a resulting reduced average hourly wage. Congress wished to improve the equity of the wage index by computing wage indexes based on national average skill mix. But for FY 2015 OMA benefits 38 rural areas and decreases payment to 20 rural areas. Why? When legislated, no one thought about minimum staffing levels – that can result in higher skill mix for small rurals compared to urban hospitals. OMA has never worked right. WHAT WERE THEY THINKING?

  7. Review Functionality – not just job titles More accurately identify employee classification in accordance with the instructions Improve payment FFY 2016-2018 Hours are the driver of the OMA, CMS uses National AHWs and local hours. GOAL OF REVIEW

  8. QUESTIONS

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