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Committee on Ways and Means
 Subcommittee on Health

For Immediate Release
Contact: Press Office 202-225-8933
July 18, 2002

WASHINGTON - Next week, lawmakers will hold a hearing to discuss and assess the formula used for calculating Medicare payments. The Subcommittee on Health will also hear suggestions for improving the appeals process available to medical facilities and physicians.

The wage index is a vital factor when calculating Medicare’s payments to medical facilities. This index analyzes the labor costs within a geographic area in order to give the Medicare program an average cost of operations for hospitals, nursing facilities and home health agencies within that region. Payments to physicians are also based on similar geographic factors.

“The operation of the wage index is extremely complex,” said Chairman Nancy Johnson (R-CT). “Not only does it consume an inordinate amount of time to adjudicate changes on a case-by-case basis, we have heard a number of complaints about the huge disparities across regions and apparent inequities between providers who are situated just miles apart. This hearing will shed some much-needed light on this complex area.”