Review of Medicare Contractor Processes for Reviewing Pennsylvania Hospitals' Wage Data

We conducted this review as a result of a congressional request regarding possible disparate treatment of western and eastern Pennsylvania hospitals during Highmark Medicare Services' (Highmark) wage data reviews.

We found that Highmark followed CMS requirements when reviewing Altoona Regional Health System's wage data that CMS used to calculate the fiscal years (FY) 2004 through 2009 wage indexes. Highmark completed its reviews within the prescribed timeframes, and Highmark's adjustments were consistent with guidance. Additionally, Highmark and Wisconsin Physicians Service followed CMS requirements when reviewing 20 other Pennsylvania hospitals' wage data that CMS used to calculate the FY 2009 wage indexes. The two Medicare contractors completed their reviews within established timeframes and provided documentation to support their adjustments to the hospitals' wage data.

Because we found no evidence of disparate treatment based on the Medicare contractor that reviewed the wage data or a hospital's geographic location, we made no recommendations.