The Axiom Advisor

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Fiscal Year 2015 PPS Rates

Final Rule for the FY15 Medicare rate year starts October 1, 2014 and ends September 30, 2015.

Medicare has released the Final Rule for the FY15 Medicare rate year which starts October 1, 2014 and ends September 30, 2015. They are available on the homepage of Axiom's website. It is important to understand that the rates are affected by various factors including:

  • The National Market Basket (inflation) Increase
  • The Change in the Wage Index Figure in Each County (CBSA)
  • The Number of Medicare Part-A Patient Days in Each RUG Category

These factors are summarized below.

PLEASE NOTE - Sequestration enacted by congress remains in effect and part of the Medicare Rate will be taken back as a part of the sequestration process.

The National Market Basket (inflation) Increase

Each year the Federal Register publishes a Market Basket increase.  The details relating to the market basket increase can be found in the Federal Register published on August 5, 2014.  The Market Basket increase for FY15 was approximately 2.1%.

In other words, the federal rates BEFORE adjustment for the wage index increased by 2.1%.  Each county also has a change in its wage index which changes the rate amount, either upward or downward.  The wage index is explained below. NOTE: the federal government has changed the classification in parts of the country for "rural" vs "urban" counties. We encourage you to watch this, as it may impact your rates in years to come.

Wage Index Changes

Each provider is located in a specific CBSA.  Each CBSA has a wage index figure associated with it. Those wage index figures have changed, some have increased and some have decreased.

Remember that before adjustment for the wage index the rates are adjusted upward by 2.1%.

If your wage index figure has increased your rate increase will be greater than 2.1%.  Conversely, If your wage index figure has decreased, your rates will increase by less than 2.1%.  In fact if the wage index has decreased enough, it is possible that your rates will actually go down.  

You need to understand the change in your wage index as well as your mix of Medicare Part-A days to properly analyze the impact on your facility. The impact of a change in the number of days in each category is summarized below.

Change in the Number of Days in Each RUG Category

Each RUG category has its own rate.  If a provider has fewer days in categories with the higher rates then that provider's overall Medicare Part-revenue would decline even though the individual rates may have gone up.


Is still in effect.

Impact Analysis Tool

We have developed impact analysis tool to allow you to estimate the impact on your facility and get a copy of your rates for FY 2015. To access this tool and get your rates, please go to the Axiom website by following the link below:

Visit the Axiom Website

Information about this is on our homepage. When using the tool on our website, you will need to do the following:

  • Determine whether your facility is Urban or Rural and select the appropriate version of the tool (Urban or Rural)
  • Use the drop down menu to select the county your facility is located in. The drop down choices appear in column I row 10
  • Input the Medicare Part-A days into the designated column (column O). We recommend using days from 10-1-2010 and forward, the longer the period of time the better.

Analyze the resulting changes.
As always, please don't hesitate to contact us with any questions.