HJAR May/Jun 2022

MEDICARE AWI the question is whether CMS will make changes prospectively or attempt to pull back the funding already provided to hos- pitals in low wage index areas. CHANGES NEEDED The pandemic has shown us that Arkan- sas hospitals are not only competing against other local facilities for workforce, but we are also competing regionally and nation- ally for the same pool of nurses, respiratory therapists, etc. The notion that an area wage index is needed because costs are lower in certain areas of the country is outdated. TheAWI in its current form is influenced by Congress, CMS, hospitals, and the courts. Because any change threatens that one hospital will receive more funding at the expense of another hospital, the present cir- cumstance pits hospitals against each other, states against each other, and Congressio- nal delegations against each other. Even the possibility of scrapping the entire system and starting over will lead to protectionism from those receiving the most money. Unless more funding is appropriated to the pool to encourage reform, we are destined to continue battling over incre- mental changes that have sizeable conse- quences. The circularity issue is most egre- gious. CMS’s last rule change raised those hospitals in the lowest quartile — a step in the right direction. CMS should maintain a funding floor to minimize the impact of ever greater differences between the highest and lowest wage indices. n “The AWI gives financial benefit to hospitals in regions that are already able to provide higher wages while decreasing funding to hospitals in other areas. Hospitals that moderate increases in hourly wages due to financial considerations, such as high government payer mix and low commercial pay rates, become low-cost providers, unable to keep up with other regions’ pay increases.” 12 MAY / JUN 2022 I  HEALTHCARE JOURNAL OF ARKANSAS