ECI and Medicare payments
January 06, 2003
Since the mid-1980s, the BLS Employment Cost Index (ECI), a quarterly measure of the rate of change in employer costs for wages and benefits, has been used as an input to annual adjustments in Medicare payments to service providers.
ECI data are used as part of a process to determine allowable increases in payments to hospitals, skilled nursing facilities, home healthcare organizations, physicians, and other healthcare providers under Medicare’s Prospective Payment Systems (PPS).
The PPS designates the level of payment for Medicare-covered services, based on the diagnosis and geographic location of care. Such payments are adjusted annually based on a number of factors, including changes in compensation for medical and related personnel. ECI data are used for many of these compensation changes.
ECI data account for about 71 percent of the input price index used to determine allowable increases in payments for hospital charges. For skilled nursing facilities, the comparable figure is 69 percent, and for home healthcare charges, it is 78 percent.
ECI data are from the BLS Employment Cost Trends program. Additional information is available from "Using the Employment Cost Index to adjust Medicare payments" by Albert E. Schwenk and William J. Wiatrowski, in the October 2002 issue of Monthly Labor Review.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, ECI and Medicare payments on the Internet at http://www.bls.gov/opub/ted/2003/jan/wk1/art01.htm (visited October 06, 2015).
Recent editions of Spotlight on Statistics
New estimates of personal taxes in Consumer Expenditure Survey
In 2013, the Consumer Expenditure Survey improved its personal tax data.
Trends in long-term unemployment
Long-term unemployment reached historically high levels following the recession of 2007–2009.
Housing: before, during, and after the Great Recession
looks at consumer expenditures on household items, employment in residential construction, prices for household items, and injuries in occupations involved in building and maintaining our homes.