The FFY 2008 Final Rule was published on August 22, 2007. The Final Rule stated that contract labor for Administrative & General, Dietary, Housekeeping and management contracts would be included in the FFY 2008 wage index. Since this data has been included in the FFY 2008 wage index, hospital administrators should ensure Worksheet S-3, Part II, Line 9.03, 22.01, 26.01 and 27.01 are properly completed for the FFY 2009 wage index.

While the inclusion of Dietary and Housekeeping contract labor may actually decrease a facility's average hourly rate, the Administrative & General and management contracts have the potential to increase the average hourly rate significantly. In any event, the goal should be to get it right (i.e. compliant) regardless of the impact. For those facilities with current management contracts in place, steps should be taken to ensure the number of labor hours that are associated with the payments can be identified.

If the hours cannot be identified, the hospital should make changes to the contract or billing procedures to ensure that the hours can be identified for future periods. If the hours cannot be identified, the payments will not be able to be included in the wage index. Another proactive step that should be considered by management is to implement an electronic method to accumulate contract labor hours throughout the fiscal year. This can save hours of your staff's time or reduce the amount of consulting fees paid.

Excerpted from:

More on reporting Medicare contract labor...

Publication Date: Wednesday, January 07, 2009