The impact of the removal of the low‐wage index hospital policy on urban and rural hospitals

The low-wage index hospital policy (LWIHP), implemented in fiscal year (FY) 2020, temporarily increased Medicare wage index values for hospitals in the lowest quartile to address geographic differences in reimbursement. Following a federal court ruling, the Centers for Medicare & Medicaid Servic...

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Veröffentlicht in:The Journal of rural health Jg. 41; H. 4; S. e70090
Hauptverfasser: Karim, Saleema A., Thompson, Kristie W., Pink, George H., Holmes, George M.
Format: Journal Article
Sprache:Englisch
Veröffentlicht: England 01.09.2025
Schlagworte:
Centers for Medicare and Medicaid Services, U.S. - organization & administration
Centers for Medicare and Medicaid Services, U.S. - statistics & numerical data
Hospitals, Rural - economics
Hospitals, Rural - statistics & numerical data
Hospitals, Urban - economics
Hospitals, Urban - statistics & numerical data
Humans
Medicare - economics
Medicare - statistics & numerical data
Prospective Payment System - statistics & numerical data
Salaries and Fringe Benefits - statistics & numerical data
Salaries and Fringe Benefits - trends
United States
United States
rural hospital
low‐wage index policy
ISSN:0890-765X, 1748-0361, 1748-0361
Online-Zugang:Volltext
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Zusammenfassung:The low-wage index hospital policy (LWIHP), implemented in fiscal year (FY) 2020, temporarily increased Medicare wage index values for hospitals in the lowest quartile to address geographic differences in reimbursement. Following a federal court ruling, the Centers for Medicare & Medicaid Services (CMS) rescinded the LWIHP in the FY 2025 Interim Final Rule and introduced a one-time transitional payment adjustment for hospitals experiencing wage index reductions greater than 5%. This study describes the characteristics of hospitals most affected by the removal of the LWIHP, stratified by urban and rural status. Using publicly available CMS administrative datasets, we identified inpatient prospective payment system (IPPS) hospitals with reductions in their FY 2025 wage index from the removal of the LWIHP. Hospitals were grouped into three categories: no change, a reduction of 0%-5%, and a reduction of >5%. Descriptive statistics summarized financial, organizational, and community characteristics across the three wage index categories, stratified by urban and rural status. Among 3152 IPPS hospitals, 46% of rural hospitals and 18.5% of urban hospitals experienced wage index reductions. Rural hospitals in the most affected category (>5% reduction) were more likely to be unaffiliated, government-owned, and located in counties with lower income, higher poverty, and lower population density. Hospitals most affected by the removal of the LWIHP, particularly rural facilities, serve communities with limited economic resources. These findings highlight the importance of Medicare payment policies that consider geographic and structural disadvantages to maintain health care access in underserved areas.
Bibliographie:ObjectType-Article-1
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ISSN:0890-765X
1748-0361
1748-0361
DOI:10.1111/jrh.70090