FFY 2023 IPPS Final Rule: Wage Index

The FFY 2023 occupational mix adjusted national average hourly wage is $47.73, representing an increase of 2.9% from FFY 2022 (from FFY 2021 to FFY 2022 the AHW increase was 2.6%). In FFY 2023, CMS finalizes:

• A permanent 5% cap on the decrease of any hospital’s wage index from the prior year. For instance, in FFY 2023, a hospital cannot receive a final wage index less than 5% of what it received in FFY 2022.

• The inclusion of wage data for urban hospitals re-designated as rural in the calculation of each state’s respective rural wage index (“rural floor”). This policy is contrary to the methodology used to calculate each state’s rural floor wage index in FFY 2020 through FFY 2022.

• An adjustment for wage index high-to-low disparities by increasing the values for low wage index hospitals below the 25th percentile (continuation of policy established in FFY 2020).

• A permanent imputed rural floor wage index calculation for hospitals located in all-urban States, which refers to States without designated rural areas (continuation of policy established in FFY 2022).

For more information, please contact Ryan Sader at (925) 685-9312 or ryan.sader@toyonassociates.com.