The Congressional Research Service has published a new report on the Medicare hospital wage index system.

The agency undertook its analysis because

Some Members of Congress, hospitals, and independent analysts have expressed interest in the differences in Medicare hospital payments by geographic area, based on the wage index. Some of these stakeholders have recommended changes to the wage index to more accurately reflect labor market forces faced by hospitals. Although some modifications to the wage index have been implemented, there is no consensus about systematic reforms.

In the report the CRS describes how the geographic wage system works and what it is supposed to do, outlines the concerns some stakeholders have expressed about the methodology, and reviews some of the recommendations that have been offered over the years to improve the wage index system.

Learn more in the Congressional Research Service report “Medicare Hospital Payments: Adjusting for Variation in Geographic Area Wages.”