On April 11, 2012, HHS submitted to Congress a report mandated by the ACA on comprehensive reform of the Medicare wage index. The report focuses on the potential impacts of using the commuting-based wage index (CBWI), which uses commuting data to define hospital labor market areas. The report concludes that the CBWI would improve upon Medicare’s existing wage index method by using information on commuting flows between geographic units that are smaller than MSAs, such as census tracts or ZIP codes. The report also highlights various considerations for a successful transition to a CBWI.