Wage Index Webinar Questions and Answers: August 21, 2023

Will this be recorded so we can refer to later?

Yes. Here is the link: Jurisdiction J and M Wage Index Updates and Review Webinar.

Where on CMS.gov can we find wage index files and information?

Wage Index Files

What happens in the event that we only have invoices and not a contract to support patient related contract labor?

The minimum required supporting documentation for contract labor is the contract itself. The MAC must have valid contracts on file in order to allow the contract labor.

For the contract labor log, is the W//S A cost center data field the same as the cost report line number?

Yes, the cost center would refer to the worksheet A "cost center" line that the costs are filed on.

Does the MAC really want all of a hospital's contracts? This could be hundreds of contracts, especially with the home office allocations?

The minimum required supporting documentation for contract labor is the contract itself. The MAC must have valid contracts on file in order to allow the contract labor.

PHE, which most of these are under, had to only have two weeks within a year?

The covid related reminder that was sent last year still applies to a very small portion of this wage index review period. If providers need a copy of this covid related reminder, please email JJWageIndex@palmettogba.com (JJ providers) or Costreport.WageIndex@palmettogba.com (JM providers).

When determining the invoice dates outside the cost reporting period for contract labor, it is based off the actual date on the invoice, correct? Not when it was paid? For example, there is an invoice dated 12/31/20 with a net 30 due date. It's paid by the provider in January 2021. That's excluded on 2021 cost report but allowed on the 2020 cost report? For a provider with a 12/31 FY.

The cost report is on a GAAP/accrual basis and contract labor should be reported in the period performed.

A slide indicated that Phys Part A must not be in a general service cost center. Can you provide the regulatory citation for this?

There is no specific regulatory citation. Palmetto/CMS views Physician Part A services in “General Service Cost Centers” as non-allowable since the services only benefit the general patient population.

If a cost report has already been NPR'd, are they still subject to the Wage Index Review?

Yes — the wage index review is performed outside of the desk review process. Therefore, if the FYE falls within CMS's review period for wage index, it will be reviewed. If material adjustments are made during wage index we would reopen the report to incorporate those wage index adjustments.

For providers who have hundreds of contracts due to the volume of their contract labor and size of the hospital system, it is a burden to provide all contracts for every vendor. Can you please provide an explanation for needing every contract? Could we just supply the sample selected?

The minimum required supporting documentation for contract labor is the contract itself. The MAC must have valid contracts on file in order to allow the contract labor.

If filing an amended cost report to document Wage Index changes, how far in advance of the 9/1 deadline does it need to be filed?

Amended cost reports can take up to 30 days to be accepted. Our acceptance team will work diligently to accept any wage amendments as quickly as possible, but it cannot be guaranteed to be accepted within 30 days of the wage correction deadline. Please reach out to your contract's wage coordinator if you plan to submit an amended report for wage changes. JJWageIndex@palmettogba.com (JJ providers) or Costreport.WageIndex@palmettogba.com (JM providers).

From Line 40: What level of detail is expected to be provided in the TPA report?

The MAC should be able to ascertain that the TPA report came directly from the third-party administrator, and the report should be broken down at a provider/CCN level of claims detail.

What do I need to do if I did not receive a documentation request letter? Also, will we get a copy of the audio of this webinar?

Please email JJWageIndex@palmettogba.com (JJ providers) or Costreport.WageIndex@palmettogba.com (JM providers) with any inquires. Please also email these boxes if a provider contact has changed and needs to be updated for our wage index records.

After 9/1 deadline how soon will providers be notified of additional request subject to the two-day deadline?

Palmetto strives to get initial follow-up requests to providers within three–four weeks of the project begin date. There will always be requests throughout our 10 week process, however (samples pulled, additional issues noted or questions that arise during reviews, etc).

An invoice is proof of cost and payment, why is this not considered sufficient?

The minimum required supporting documentation for contract labor is the contract itself. The MAC must have valid contracts on file in order to allow the contract labor.

Have there been any discussions across the MACs in regard to contract labor? Palmetto GBA has taken a far more aggressive stance regarding contract language and application of adjustments. This penalizes hospitals audited by Palmetto GBA vs other MACs.

MACs meet regularly together to discuss CMS requirements and interpretations of regulations, including but not limited to wage index updates. Palmetto strives to conduct reviews in a similar manner to all other MACs. It is noted that CMS scrutiny of contract labor has increased in recent years.

Is Contract Labor (Lines 11; 12; 13; 28) reported on the cash bases of accounting? Services occurred during the fiscal year and actual payment occurred after the end of fiscal year. Include in year of service or year of payment.

The cost report is on a GAAP/accrual basis and contract labor should be reported in the period performed.

Is the contract labor listing template mandatory?

The contract labor listing isn't required but is highly encouraged. We will need all the data contained within this template, so as long as that data is submitted, the format of that data isn't as important.

Does the Provider have to transfer all their data to the contract labor listing templates?

The contract labor listing isn't required but is highly encouraged. We will need all the data contained within this template, so as long as that data is submitted, the format of that data isn't as important.

Do all contracts need to be submitted by 9/1 or can we submit once requested by an auditor?

Yes. If the contracts have not been previously submitted and/or the contract is new in current year, the contract must be submitted by the initial requested deadline. Remember that if contracts were submitted in previous years or with the as-filed cost report, there is no need to resubmit these.

Should we except to see audit adjustments before late November so we have an opportunity to review before HCRIS deadline at end of year?

Our auditors will issue adjustments to providers as soon as our Round 1 reviews are completed. However, the provider has from mid-November 2023 until February 2024 to rebut any Round 1 adjustments that the MAC makes.

Should all contract labor invoices be submitted at the time the information request is submitted?

Yes. If the contracts have not been previously submitted and/or the contract is new in current year, the contract must be submitted. Remember that if contracts were submitted in previous years or with the as-filed cost report, there is no need to resubmit these.

We haven't had to submit all contract labor contracts in the past. Is this being newly enforced this year?

This has been a requirement for Palmetto for the past five plus years. It has been part of our information request out to providers each year and we send these information requests typically a month before wage index reviews begin. It is noted that CMS has increased scrutiny of our contract labor reviews in recent years.

Was the Covid19reminder.docx not issued this year with the documentation requests?

The covid related reminder that was sent last year still applies to a very small portion of this wage index review period. If providers need a copy of this covid related reminder, please email JJWageIndex@palmettogba.com (JJ providers) or Costreport.WageIndex@palmettogba.com (JM providers).

Is it either submit contracts or receive invoice selection?

The minimum required supporting documentation for contract labor is the contract itself. The MAC must have valid contracts on file in order to allow the contract labor.

If a contract is not submitted by 9/1, will the cost be thrown out, or can we provide the contract after 9/1?

JJ and JM requested in July 2023, that all supporting contracts be submitted by September 1, 2023 (if not previously submitted). If we do not have contracts in house by 9/1, we will review to determine allowability and may possibly make additional information requests. Palmetto reminded providers with the July request that any additional information requests after 9/1 would not allow providers much time for response. If we have to request after 9/1 we will likely allow providers two to three days to respond, otherwise the costs will be written off. Providers will have until February 2024 to rebut any findings that the MAC determines during Round 1 of wage index reviews.

Some health systems have several hundred contract labor vendor contracts. How can we submit hundreds of contracts through eServices?

The provider may email them in a zip file to our wage index email boxes as well if this is easier. JJWageIndex@palmettogba.com (JJ providers) or Costreport.WageIndex@palmettogba.com (JM providers). Keep in mind that if contracts were submitted in previous years or with as-filed cost report information, they do not need to be resubmitted again.

Are contracts only for S-3 Line 11?

A valid contract must be in force by the provider, for any contract labor claimed on the wage index worksheets. 

Why would the auditor ask for all contracts and not just for the vendor being sampled?

The minimum required supporting documentation for contract labor is the contract itself. The MAC must have valid contracts on file in order to allow the contract labor.

For intermittent labor purchased, not every service has a contract...but does have an approved purchase order between the third party vendor and the hospital?

Purchased orders do not constitute a valid contract. For any contract labor claimed there must be a valid signed contract on file with the facility.

If there was no issue with a Contract Labor contract in PY, do you still have to send the contract for this year?

Yes. If the contracts have not been previously submitted and/or the contract is new in current year, the contract must be submitted. Remember that if contracts were submitted in previous years or with the as-filed cost report, there is no need to resubmit these.

Would an engagement letter from a consulting firm (example, financial statement audit firm) that shows total dollars, but not average hourly wage, would that be an acceptable contract?

If the document is signed by both parties, contains all contract terms, including cost information and time to be spent performing the contract, we would likely accept that as a "contract" — it just depends on if the document contains all required aspects of a typical contract. The MAC must be able to determine actual labor costs paid and actual labor hours worked.

What if the contracts are included in the as filed cost report?

The MAC auditors should have access to any information submitted with the as-filed cost report. This information does not need to be resubmitted during wage reviews.

Are contracts required for every contract area, including contract nursing?

Yes — any contract labor claimed must have a valid signed contract submitted to be allowed.

In the past CMS had "Contract Labor" reviewed every three years unless they exceeded the threshold. Are you telling us Contract labor is now being reviewed every year?

CMS thresholds are internal and not public to the providers. However, MACs will review on the CMS determined schedule and MAC can confirm that CMS scrutiny of contract labor has increased in recent years.

Providers have strong incentives to pay according to the contract, so you can rest assured that the provider is paying per contract. I know this will not change the requirement but wanted to mention this.

The MAC will work to review and determine actual labor costs paid and actual labor hours worked. The amounts paid should be in agreement with the written contract in force during the period.

Engagement letters are signed by both parties. Would this be acceptable as a contract?

If the document is signed by both parties, contains all contract terms, including cost information and time to be spent performing the contract, we would likely accept that as a "contract" — it just depends on if the document contains all required aspects of a typical contract.

If an invoice has a different amount than the contract, is the entire amount disallowed or only partial?

The MAC will work to review and determine actual labor costs paid and actual labor hours worked. The amounts paid should be in agreement with the written contract in force during the period.

Contract Labor: Include in the year service was performed or service was paid?

The cost report is on a GAAP/accrual basis and contract labor should be reported in the period performed.

Are you saying if the invoice amount exceeds the contract amount you will accept the contracted amount on the listing?

The MAC will work to review and determine actual labor costs paid and actual labor hours worked. The amounts paid should be in agreement with the written contract in force during the period.

Issues were identified with Qualivis for contract labor on the last round. What is the expectation for documentation from this contractor?

We have to be able to ensure that the document came directly from the vendor — provider attestations are not acceptable. If the supporting documentation came from the vendor at a level that we need for review (signed contract, actual labor hours worked, actual labor costs paid), we would accept this information as support.

So if we have 250 vendors and thousands of invoices, we need to submit 250 contracts?

Yes, to claim contract labor costs, we do require the contracts to be submitted at a minimum. Keep in mind that if contracts were submitted during prior year reviews, you do not have to resubmit those contracts.

For Qualivis: Are you saying excel workbook from Qualivis breaking down allowed vs. non-allowed is okay?

We must be able to ensure that the document came directly from the vendor — provider attestations are not acceptable. If the supporting documentation came from the vendor at a level that we need for review, we would accept this information as support.

What if a contract does not state an AHW?

The MAC must be able to determine that a signed contract was in place, and that actual labor hours worked, and actual labor costs paid are being claimed on the applicable wage index line.

It's difficult for current staff to know what Contracts were submitted in prior years due to staff turnover at facilities. Is there a listing the MAC has as to what has been submitted in prior years?

The MAC does not maintain a global listing of contacts already in-house — but provider staff is welcome to reach out to JJWageIndex@palmettogba.com (JJ providers) or Costreport.WageIndex@palmettogba.com (JM providers) with specific inquiries as to contracts already received.

A lot of our contracts don't have AHW, but the invoices have hours listed. Is that sufficient?

The MAC must be able to determine that a signed contract was in place, and that actual labor hours worked, and actual labor costs paid are being claimed on the applicable wage index line.

What is the minimum language required for Medical Director contracts?

This is provider and contract specific. The MAC will review various criteria to determine if the costs are allowable. Any relevant contract information should be included (job duties, pay, requirements for bonuses, etc.).

Does the contract labor log require the cost report line or GL cost center, for the cost center field?

Yes, this is required.

Do you have an example of a report from a vendor with "all inclusive" language in the contract that was sufficient support to allow the contract labor?

If "all inclusive" rates are paid, these cannot be claimed on the wage index worksheet without a breakdown of labor only costs. CMS instructs providers to include only labor costs within the wage index. No supplies, travel, etc may be included.