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<strong>CMS</strong>-1403-FC<br />

In the CY 2007 PFS final rule with comment period<br />

(71 FR 69685), we stated that we intended to update the<br />

ESRD wage index values annually. The current ESRD wage<br />

index values for CY 2008 were developed from FY 2004 wage<br />

and employment data obtained from the Medicare hospital<br />

cost reports. The ESRD wage index values are calculated<br />

without regard to geographic classifications authorized<br />

under sections 1886(d)(8) and (d)(10) of the Act and<br />

utilize pre-floor hospital data that is unadjusted for<br />

occupational mix. To calculate the ESRD wage index,<br />

hospital wage index data for FY 2004 for all providers in<br />

each urban/rural geographic area are combined. The sum of<br />

the wages for all providers in each geographic area was<br />

divided by the total hours for all providers in each area.<br />

The result is the average hourly hospital wage for that<br />

geographic locale. The ESRD wage index was computed by<br />

dividing the average hourly hospital wage for each<br />

geographic area by the national average hourly hospital<br />

wage. The final step was to multiply each wage index value<br />

by the ESRD wage index budget neutrality factor (BNF).<br />

We proposed to use the same methodology for CY 2009,<br />

with the exception that FY 2005 hospital data will be used<br />

to develop the CY 2009 wage index values. The CY 2009 ESRD<br />

wage index BNF is 1.056689. <strong>This</strong> figure differs slightly<br />

180

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