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Is your organization's wage index accurate? One study reveals that an incorrect wage index for a single hospital can skew the wage index for an entire labor market area--especially in areas with a small number of hospitals.

The relationship between a hospital's average hourly wage and the wage index for its labor market area can be challenging to understand. The methods used by the Centers for Medicare and Medicaid Services to calculate the wage index are complex, and it might seem that data for an individual hospital cannot materially impact the process.

However, a recent study reveals that an overstatement or understatement of wage data can have a substantial impact on payment. This is particularly true in areas that have only one hospital and in areas where one hospital's labor costs are significantly higher or lower than those of other area hospitals. In some instances, wage index ...

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