[Federal Register Volume 61, Number 171 (Tuesday, September 3, 1996)]
[Notices]
[Pages 46466-46478]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22376]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[BPD-842-NC]
RIN 0938-AH70


Medicare Program; Schedule of Prospectively Determined Payment 
Rates for Skilled Nursing Facility Inpatient Routine Service Costs

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Final notice with comment period.

-----------------------------------------------------------------------

SUMMARY: This final notice with comment period sets forth the schedule 
of payment rates for low Medicare volume skilled nursing facilities for 
prospective payments for routine service costs for Federal fiscal year 
1997 (cost reporting periods beginning on or after October 1, 1996 and 
before October 1, 1997). Section 1888(d) of the Social Security Act 
requires the Secretary to establish and publish the prospectively 
determined payment rates 90 days prior to the beginning of the affected 
Federal fiscal year.

DATES: Effective date: The schedule of payment rates is effective for 
cost reporting periods beginning on or after October 1, 1996.
    Comment date: Written comments will be considered if we receive 
them at the appropriate address, as provided below, no later than 5:00 
p.m. on November 4, 1996.

ADDRESSES: Mail written comments (an original and three copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: BPD-842-NC, P.O. Box 7517, 
Baltimore, MD 21244-0517.
    If you prefer, you may deliver your written comments (an original 
and three copies) to one of the following addresses: Room 309-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 
20201, or C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    Comments may also be submitted electronically to the following e-
mail address: [email protected]. E-mail comments must include the 
full name and address of the sender and must be submitted to the 
referenced address in order to be considered. All comments must be 
incorporated in the e-mail message because we may not be able to access 
attachments. Electronically submitted comments will be available for 
public inspection at the Independence Avenue address, below.
    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In

[[Page 46467]]

commenting, please refer to file code BPD-842-NC. Comments received 
timely will be available for public inspection as they are received, 
generally beginning approximately 3 weeks after publication of a 
document, in Room 309-G of the Department's offices at 200 Independence 
Avenue, SW, Washington, DC, on Monday through Friday of each week from 
8:30 a.m. to 5 p.m. (phone: (202) 690-7890).
    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order payable to 
the Superintendent of Documents, or enclose your Visa or Master Card 
number and expiration date. Credit card orders can also be placed by 
calling the order desk at (202) 512-1800 or by faxing to (202) 512-
2250. The cost for each copy is $8.00. As an alternative, you can view 
and photocopy the Federal Register document at most libraries 
designated as Federal Depository Libraries and at many other public and 
academic libraries throughout the country that receive the Federal 
Register.

FOR FURTHER INFORMATION CONTACT: Joseph Menning (410) 786-4594.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 1888 of the Social Security Act (the Act) sets forth the 
statutory requirements concerning Medicare payments to skilled nursing 
facilities (SNFs) for their routine service costs for services 
furnished to Medicare beneficiaries. Most SNFs are paid on a reasonable 
cost basis up to a schedule of routine service per diem cost limits 
established in accordance with the general reasonable cost provisions 
of section 1861(v)(1) of the Act and the specific SNF payment 
provisions of section 1888 of the Act. However, under the provision at 
section 1888(d) of the Act, for cost reporting periods beginning on or 
after October 1, 1986, a SNF with fewer than 1,500 Medicare covered 
days in a given cost reporting period may choose to receive payment 
based on a prospectively determined payment rate in the subsequent cost 
reporting period. The prospectively determined payment rates for low 
Medicare volume SNFs are established on a per diem basis and include 
payment for the cost of furnishing general inpatient routine services 
and capital-related costs associated with routine services.
    The per diem amounts may not exceed the limit on routine service 
costs set forth in section 1888(a) of the Act with respect to the 
facility, adjusted to take into account average capital-related costs 
with respect to the type and location of the facility. The limit used 
for this purpose is the applicable routine service cost limit in effect 
when the provider elects to be paid under the prospectively determined 
payment rates.
    For SNFs located in an urban area, the prospectively determined 
payment amount is equal to 105 percent of the mean of the per diem 
reasonable routine service and routine capital-related costs of 
services for SNFs in urban areas within the same census region. The 
mean per diem is determined without regard to the limitations of 
section 1888(a) of the Act and is adjusted for different area wage 
levels.
    For SNFs located in a rural area, the prospectively determined 
payment amount is equal to 105 percent of the mean of the per diem 
reasonable routine service and routine capital-related costs of covered 
services for SNFs in rural areas within the same census region. The 
mean per diem is determined without regard to the limitations of 
section 1888(a) of the Act and is adjusted for different area wage 
levels.
    Prior to the enactment of the Omnibus Budget Reconciliation Act of 
1993 (OBRA 1993; Public Law 103-66), we published guidelines specifying 
the methodology and data used and the actual prospectively determined 
payment rates annually in the Medicare Provider Reimbursement Manual 
(HCFA Pub. 15-1). The general requirements for the rates were included 
under sections 2820 and 2821 of the manual and the actual rates, the 
most recent effective for Federal fiscal year 1993, were in section 
2828 of the manual.
    Section 13503(b) of OBRA 1993 prohibited changes to the Federal 
fiscal year 1993 prospectively determined payment rates paid under 
section 1888(d) of the Act for services furnished during cost reporting 
periods beginning in Federal fiscal year 1994 and in Federal fiscal 
year 1995, except as may be necessary to take into account the 
amendments made by section 13503(c). Section 13503(c) of OBRA 1993 
amended sections 1861(v)(1)(B) and 1878(f)(2) of the Act by eliminating 
return on owner's equity for services furnished on or after October 1, 
1993.
    On July 21, 1995, we published in the Federal Register a final rule 
(60 FR 37590) that codified in the Code of Federal Regulations the 
statutory requirements for the optional prospectively determined 
payment system for low Medicare volume SNFs and the guidelines on the 
methodology and data used that were in the Provider Reimbursement 
Manual. These implementing regulations, effective on August 21, 1995, 
appear at 42 CFR 413.1, 413.24 and 413.300 through 413.321.
    Under the provisions of Sec. 413.312(a)(1), to calculate the 
prospectively determined payment rates, we use the SNF cost data that 
were used to develop the applicable SNF inpatient routine service cost 
limits, a wage index to adjust for area wage differences, and the most 
recent projections of increases in the costs from the SNF market basket 
(inflation factors). Section 413.312(a)(2) provides that we will 
announce in the Federal Register the wage index and the annual 
percentage increases in the market basket used in the calculation of 
the rates. In addition, Sec. 413.320 provides that at least 90 days 
before the beginning of a Federal fiscal year to which revised 
prospectively determined payment rates are to be applied, HCFA will 
publish a notice in the Federal Register establishing the rates for 
routine services and explaining the basis on which the rates are 
calculated.
    This notice announces the schedule of payment rates for prospective 
payments for routine service costs in Federal fiscal year 1997 (cost 
reporting periods beginning on or after October 1, 1996 and before 
October 1, 1997) for low Medicare volume SNFs that elect this method of 
payment. This notice represents the first schedule of prospectively 
determined payment rates published in a Federal Register notice after 
the effective date of the July 1995 implementing regulations. In 
addition, this notice includes the inflation factors to update the 
routine service cost limits applicable for Federal fiscal year 1997, 
which are necessary to compute a SNF's prospectively determined payment 
rate.

II. Update of the Schedule of Prospectively Determined Payment Rates

    As mentioned earlier, the statute provided that both the SNF 
routine service cost limits and the prospectively determined payment 
rates be frozen at the Federal fiscal year 1993 amounts for cost 
reporting periods beginning in Federal fiscal year 1994 and in Federal 
fiscal year 1995. As a result of these rates and limits remaining at 
the Federal fiscal year 1993 levels, the Medicare program experienced a 
savings in Medicare trust funds. We had anticipated that, because of 
these prior years' savings, we would have legislative support to 
preserve these program savings for Federal fiscal year 1996 and later. 
We expected to do this

[[Page 46468]]

by trending the Federal fiscal year 1993 limits and rates to cost 
reporting periods beginning in Federal fiscal year 1996, except that 
the inflation factors for Federal fiscal year 1994 and Federal fiscal 
year 1995 would not be included. However, such legislation has not been 
enacted. Therefore, in the interim for Federal fiscal year 1996, we 
provided the Medicare intermediaries with updated Federal fiscal year 
1996 limits and rates by trending the Federal fiscal 1993 data to 
Federal fiscal 1996 by using the projected inflation factors and the 
methodology described in the October 7, 1992 Federal Register notice 
(57 FR 46177) that announced the Federal fiscal year 1993 limits 
(including the inflation factors for Federal fiscal years 1994 and 
1995).
    In addition, in May 1996, we provided all Medicare intermediaries 
with revisions to the Federal fiscal year 1993 cost limits and 
prospectively determined payment rates that reflected corrections to 
the projected inflation factors used in the October 7, 1992 notice. (An 
explanation of the circumstances under which HCFA corrects projected 
inflation factors is in the October 7, 1992 notice (57 FR 46179 through 
46180).) These revised Federal fiscal year 1993 limits and rates were 
also used to compute updated limits and rates for cost reporting 
periods beginning in Federal fiscal year 1996. However, these revisions 
did not affect prospectively determined payment rates issued before the 
May 1996 notification to the intermediaries.
    In developing the prospectively determined payment rates effective 
with this notice, we are using the basic methodology and cost report 
data specified in Sec. 413.312 of the regulations (and described in 
section 2828 of the Provider Reimbursement Manual). We will continue to 
use the same wage indexes and the same urban and rural designations 
used to compute the Federal fiscal year 1993 cost limits and 
prospectively determined rates, as specified in the October 7, 1992 
Federal Register notice and described in section 2828 of the Provider 
Reimbursement Manual, respectively. In addition, we will continue to 
provide a per diem add-on to the prospectively determined payment rates 
to account for costs incurred by SNFs in complying with the nursing 
home reform provisions specified in section 1819 of the Act (enacted by 
OBRA 1987), including the costs of conducting nurse aide training and 
competency evaluations, and for costs associated with the Occupational 
Safety and Health Administration (OSHA) universal precaution 
requirements.
    Tables I and II under section IV. of this notice contain the 
Federal fiscal year 1997 prospectively determined payment rates. Table 
III under section IV. of this notice contains the Federal fiscal year 
1997 routine service cost limits. Table IV under section IV. of this 
notice contains the monthly inflation factors to be applied to full 12 
month cost reporting periods beginning in Federal fiscal year 1997.

III. Methodology for Determining Prospectively Determined Per Diem 
Payment Rates

    The schedule of rates set forth in Tables I and II under section 
IV. of this notice applies to all SNFs that qualify and request to 
receive the optional prospective payment rate for routine services 
under the provisions of subpart I of part 413. Under Sec. 413.314(d), a 
SNF's prospective payment rate, excluding capital-related costs, cannot 
exceed its actual routine service cost limit (without regard to 
exceptions, exemptions, or retroactive adjustments) in effect at the 
time of the election to be paid a prospectively determined payment 
rate. The prospectively determined payment rate is in place of payment 
that would otherwise be made for routine service costs and associated 
capital-related costs under section 1861(v) of the Act. There are no 
retroactive adjustments to these rates and under Sec. 413.308(c), an 
SNF may not revoke its request to be paid under this provision after it 
has received the initial determination of eligibility from the 
intermediary and the cost reporting period has begun.

A. Data

    The actual cost data used to develop the prospectively determined 
payment rates for cost reporting periods beginning in FY 1993 were 
obtained from settled freestanding SNF Medicare cost reports for 
periods ending on or after June 30, 1989, and through May 31, 1990. 
Comparable data for hospital-based SNFs were obtained from settled 
Medicare cost reports for periods ending on or after October 31, 1988, 
and through September 30, 1989. We are continuing to use the same cost 
report data to develop the prospectively determined payment rates in 
this notice.

B. Use of the Most Recent Available Inflation Factors

    We are continuing to use the SNF input price market basket index 
(inflation factor) to adjust the cost report data to the initial cost 
reporting period to which the prospectively determined payment rates 
apply. The inflation factors are comprised of a ``market basket'' of 
the most commonly used categories of SNF routine service expenses. The 
categories used are based primarily on those used in the National 
Center for Health Statistics in its National Nursing Home Surveys. The 
categories are weighted according to the estimated proportion of SNF 
routine service cost attributable to each category. The Appendix to 
this notice specifies the weights used in each category.
    We are adjusting the cost report data described above using the 
most recent available inflation factors shown below. These inflation 
factors are similar to those used in the May 1996 notification to the 
intermediaries described in section II. of this notice. These inflation 
factors, representing the annual percentage increases in the market 
basket over the previous year, are:

1988................................................................5.1
1989................................................................6.6
1990................................................................6.3
1991................................................................4.4
1992................................................................3.8
1993................................................................3.7
1994................................................................3.4
1995................................................................2.9
1996................................................................2.9
1997................................................................3.2
1998................................................................3.4

    If a facility has a cost reporting period beginning in a month 
after October 1, 1996, the intermediary increases the adjusted routine 
operating portion of the rate that otherwise apply to the SNF by the 
factor from Table IV of this notice that corresponds to the month and 
year in which the cost reporting period begins. Each factor represents 
the compounded monthly increase derived from the annual increase in the 
market basket index and is used to account for inflation in costs that 
occur after the date on which the prospective payment rates are 
effective.
    If a facility uses a cost reporting period that is not 12 months in 
duration, a special adjustment factor will be calculated. This is 
necessary because market basket increases are computed to the midpoint 
of a cost reporting period and the adjustment factors in Table IV of 
this notice are based on an assumed 12-month cost reporting period. For 
cost reporting periods of other than 12 months, the calculation is done 
for the midpoint of the specific cost reporting period. The SNF's 
intermediary obtains this adjustment factor from HCFA central office.

C. Use of Wage Index to Adjust Labor-Related Cost

    We are continuing to use the hospital industry wage index to 
account for area

[[Page 46469]]

wage differences. We are continuing to apply the wage index to five 
categories of labor-related costs: wages, employee benefits, health 
service costs, business service costs, and other miscellaneous costs. 
The portion of labor-related costs remains at the level of 83.1 
percent. In addition, the same wage index values and urban/rural 
designations, as shown in Tables V and VI of this notice, are to be 
applied to the labor-related portion of the prospectively determined 
payment rates in this notice. (These are the same wage index values and 
urban/rural designations shown in the October 7, 1992 cost limit notice 
and section 2828 of the Provider Reimbursement Manual.)

D. Use of Classification System

    We will retain the classification system based on grouping SNFs by 
census regions and by urban or rural area designation within the 
region. As required by sections 1888(d)(3) and 1886(d)(2)(D) of the 
Act, the term ``region'' means one of the nine census divisions, 
comprising the fifty States and the District of Columbia, established 
by the Bureau of Census for statistical and reporting purposes. The 
term ``urban area'' means an area within a Metropolitan Statistical 
Area (MSA) (as defined by the Office of Management and Budget (OMB), 
with exceptions for certain New England County Metropolitan Areas 
(NECMAs), as described in a notice published in the Federal Register on 
April 1, 1991 (56 FR 13319)). The term ``rural area'' means an area 
outside of an MSA.

E. Use of OBRA 1987 and OSHA Per Diem Add-on

    Section 1861(v)(1)(E) of the Act provides for payment for costs 
incurred by SNFs in complying with the nursing home reform provisions 
specified in section 1819 of the Act, including the costs of conducting 
nurse aide training and competency evaluations (referred to as the OBRA 
1987 nursing home reform). Since the cost report data used in this 
notice does not account for the costs of implementing the OBRA 1987 
nursing home reform provisions, we will continue to provide a per diem 
add-on for these costs. In addition, we will continue to provide a per 
diem add-on for the costs associated with the Occupational Safety and 
Health Administration (OSHA) universal precaution requirements. A 
detailed description of the derivation of the per diem add-on is 
contained in section 2828 of the Provider Reimbursement Manual. The 
amount of the OBRA/OSHA per diem add-on to determine prospectively 
determined payment rates for cost reporting periods beginning in 
Federal fiscal year 1997 is $2.06. (For cost limit purposes, the per 
diem add-on is $2.20 for Federal fiscal year 1997.)

F. Comparison of Provider's Prospective Payment Rate with Provider's 
Cost Limit

    Below is an example of the calculation of the prospectively 
determined payment rate for a provider including the comparison of the 
adjusted routine operating portion of the rate with the applicable 
routine operating cost limit applicable to the specific provider. The 
capital-related component of the rate is added to the lower of the 
SNF's specific cost limit or its adjusted routine operating portion of 
the rate to arrive at the provider's actual prospectively determined 
payment rate.
    Example: In this case, the adjusted cost limit is less than the 
adjusted routine operating portion of the rate for a freestanding SNF 
located in Providence, Rhode Island (MSA Region 1), with a cost 
reporting period beginning January 1, 1997. Therefore, the 
prospectively determined payment rate for this SNF is the adjusted cost 
limit plus the capital-related component of the rate ($126.12).

                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                                              Labor-     Non-labor     Capital- 
                                                                             related      related      related  
                                                                            component    component    component 
----------------------------------------------------------------------------------------------------------------
Limit (From Table III)...................................................       $88.45       $18.99  ...........
Rate (From Table I)......................................................      $116.46       $22.21       $10.00
----------------------------------------------------------------------------------------------------------------


                                     Calculation of Prospective Payment Rate                                    
----------------------------------------------------------------------------------------------------------------
                                                         Limit         Rate                Rate source          
----------------------------------------------------------------------------------------------------------------
Labor-Related Component.............................       $88.45      $116.46  (Table I).                      
Wage Index..........................................     x 1.0630     x 1.0630  (Table V).                      
Adjusted Labor Component............................       $94.02      $123.80  --                              
Non-Labor Component.................................       $18.99        22.21  (Table I).                      
OBRA/OSHA Per Diem Add-on...........................       +$2.20       +$2.06  (Sec III.E).                    
Adjusted Limit/Rate.................................      $115.21      $148.07  --                              
Cost Reporting Year Adjustment Factor...............    x 1.00796    x 1.00796  (Table IV).                     
Applicable Limit and Operating Rate Portion.........      $116.12      $149.25  --                              
Capital-Related Component...........................       +10.00           --  (Table I).                      
Prospectively Determined Payment Rate...............      $126.12           --  --                              
----------------------------------------------------------------------------------------------------------------


      Table I.--Prospective Rates--MSA Locations, Effective for Cost Reporting Periods Beginning in FY 1997     
----------------------------------------------------------------------------------------------------------------
                                                                              Labor-     Nonlabor-     Capital- 
                                Region \1\                                   related      related      related  
----------------------------------------------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT)..................................      $116.46       $22.21       $10.00
2. Middle Atlantic (PA, NJ, NY)..........................................       112.33        20.30         9.79
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)...................       100.69        16.19         9.81
4. East North Central (IL, IN, MI, OH, WI)...............................        95.68        15.90         9.18
5. East South Central (AL, KY, MS, TN)...................................        96.25        14.16         7.32
6. West North Central (IA, KS, MN, MO, NB, ND, SD).......................       102.64        17.05        10.23
7. West South Central (AR, LA, OK, TX)...................................        89.81        14.03        10.06

[[Page 46470]]

                                                                                                                
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY).............................       106.86        18.25        13.04
9. Pacific (AK, CA, HI, OR, WA)..........................................        97.24        19.93        8.40 
----------------------------------------------------------------------------------------------------------------
\1\ There are 16 MSAs that have counties in two or more regions. For each of these MSAs, the region in which a  
  majority of the SNFs are located determines the regional rate that is paid as shown below. This is the same   
  methodology as that used to implement the requirements of section 1886(d)(2)(D) of the Act as they apply to   
  the hospital prospective payment.                                                                             

    The MSAs are as follows:

------------------------------------------------------------------------
                              MSA                                Region 
------------------------------------------------------------------------
Chattanooga, TN-GA............................................         5
Cincinnati, OH-KY-IN..........................................         4
Columbus, GA-AL...............................................         3
Davenport-Rock Island-Moline, IA-IL...........................         4
Duluth-Superior, MN-WI........................................         6
Evansville-Henderson, IN-KY...................................         4
Huntington-Ashland, WV-KY-OH..................................         3
Johnson City-Kingsport-Bristol, TN-VA.........................         5
Louisville, KY-IN.............................................         5
Memphis, TN-AR-MS.............................................         5
Minneapolis-St. Paul, MN-WI...................................         6
Parkersburg-Marietta, WV-OH...................................         3
St. Louis, MO-IL..............................................         6
Steubenville-Weirton, OH-WV...................................         4
Wheeling, WV-OH...............................................         3
Wilmington-Newark, DE-NJ-MD...................................         3
------------------------------------------------------------------------


    Table II.--Prospective Rates--Non-MSA Locations Effective for Cost Reporting Periods Beginning in FY 1997   
----------------------------------------------------------------------------------------------------------------
                                                                              Labor-     Nonlabor-     Capital- 
                                  Region                                     related      related      related  
----------------------------------------------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT)..................................      $125.72       $20.96       $10.58
2. Middle Atlantic (PA, NJ, NY)..........................................       117.44        16.86         7.94
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)...................       111.02        15.09         9.19
4. East North Central (IL, IN, MI, OH, WI)...............................       104.72        14.62         8.28
5. East South Central (AL, KY, MS, TN)...................................       105.49        13.28         6.77
6. West North Central (IA, KS, MN, MO, NB, ND, SD).......................       108.01        14.37         6.66
7. West South Central (AR, LA, OK, TX)...................................       102.51        13.03         9.22
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY).............................       107.03        15.69         8.36
9. Pacific (AK, CA, HI, OR, WA)..........................................       119.77        20.11        10.16
----------------------------------------------------------------------------------------------------------------


  Table III.--Routine Service Cost Limits in Effect for Cost Reporting Periods Beginning in Federal Fiscal Year 
                                                      1997                                                      
----------------------------------------------------------------------------------------------------------------
                                                                              Labor-     Non-labor-             
                          Provider type/location                             related      related     OBRA/OSHA 
                                                                            component    component     add-ons  
----------------------------------------------------------------------------------------------------------------
Freestanding:                                                              ...........  ...........        $2.20
    MSA..................................................................       $88.45       $18.99             
    Non-MSA..............................................................        89.81        15.16             
Hospital based:                                                            ...........  ...........         2.20
    MSA limit............................................................       124.76        26.45             
    Non-MSA limit........................................................       114.31        19.01             
----------------------------------------------------------------------------------------------------------------


[[Page 46471]]



Table IV.--Cost Reporting Year Adjustment Factors \1\ Effective for Cost
                 Reporting Periods Beginning in FY 1997                 
------------------------------------------------------------------------
                                                                  The   
           If an SNF cost reporting period begins:            adjustment
                                                              factor is:
------------------------------------------------------------------------
November 1, 1996............................................     1.00268
December 1, 1996............................................     1.00528
January 1, 1997.............................................     1.00796
February 1, 1997............................................     1.01083
March 1, 1997...............................................     1.01343
April 1, 1997...............................................     1.01631
May 1, 1997.................................................     1.01910
June 1, 1997................................................     1.02200
July 1, 1997................................................     1.02481
August 1, 1997..............................................     1.02773
September 1, 1997...........................................    1.03066 
------------------------------------------------------------------------
\1\ Based on compounded actual market basket inflation rates of 3.70    
  percent for 1993, 3.40 percent for 1994 and projected rates of 2.90   
  percent for 1995, 2.90 percent for 1996, 3.20 percent for 1997, and   
  3.40 percent for 1998.                                                


                   Table V--Wage Index for Urban Areas                  
------------------------------------------------------------------------
                                                                  Wage  
   Urban area (constituent counties or county equivalents)       index  
------------------------------------------------------------------------
Abilene TX...................................................     0.9220
    Taylor, TX                                                          
Aguadilla, PR................................................     0.4568
    Aguada, PR                                                          
    Aguadilla, PR                                                       
    Isabella, PR                                                        
    Moca, PR                                                            
Akron, OH....................................................     0.9493
    Portage, OH                                                         
    Summit, OH                                                          
Albany, GA...................................................     0.8050
    Dougherty, GA                                                       
    Lee, GA                                                             
Albany-Schenectady-Troy, NY..................................     0.8922
    Albany, NY                                                          
    Greene, NY                                                          
    Montgomery, NY                                                      
    Rensselaer, NY                                                      
    Saratoga, NY                                                        
    Schenectady, NY                                                     
Albuquerque, NM..............................................     1.0123
    Bernalillo, NM                                                      
Alexandria, LA...............................................     0.8275
    Rapides, LA                                                         
Allentown-Bethlehem, PA-NJ...................................     0.9857
    Warren, NJ                                                          
    Carbon, PA                                                          
    Lehigh, PA                                                          
    Northampton, PA                                                     
Altoona, PA..................................................     0.9238
    Blair, PA                                                           
Amarillo, TX.................................................     0.8739
    Potter, TX                                                          
    Randall, TX                                                         
Anaheim-Santa Ana, CA........................................     1.2130
    Orange, CA                                                          
Anchorage, AK................................................     1.4176
    Anchorage, AK                                                       
Anderson, IN.................................................     0.9583
    Madison, IN                                                         
Anderson, SC.................................................     0.7258
    Anderson, SC                                                        
Ann Arbor, MI................................................     1.1384
    Washtenaw, MI                                                       
Anniston, AL.................................................     0.7931
    Calhoun, AL                                                         
Appleton-Oshkosh-Neenah, WI..................................     0.9179
    Calumet, WI                                                         
    Outagamie, WI                                                       
    Winnebago, WI                                                       
Arecibo, PR..................................................     0.3953
    Arecibo, PR                                                         
    Camuy, PR                                                           
    Hatillo, PR                                                         
    Quebradillas, PR                                                    
Asheville, NC................................................     0.8739
    Buncombe, NC                                                        
Athens, GA...................................................     0.8209
    Clarke, GA                                                          
    Jackson, GA                                                         
    Madison, GA                                                         
    Oconee, GA                                                          
Atlanta, GA..................................................     0.9596
    Barrow, GA                                                          
    Butts, GA                                                           
    Cherokee, GA                                                        
    Clayton, GA                                                         
    Cobb, GA                                                            
    Coweta, GA                                                          
    De Kalb, GA                                                         
    Douglas, GA                                                         
    Fayette, GA                                                         
    Forsyth, GA                                                         
    Fulton, GA                                                          
    Gwinnett, GA                                                        
    Henry, GA                                                           
    Newton, GA                                                          
    Paulding, GA                                                        
    Rockdale, GA                                                        
    Spalding, GA                                                        
    Walton, GA                                                          
Atlantic City, NJ............................................     1.0507
    Atlantic City , NJ                                                  
    Cape May, NJ                                                        
Augusta, GA-SC...............................................     0.9401
    Columbia, GA                                                        
    McDuffie, GA                                                        
    Richmond, GA                                                        
    Aiken, SC                                                           
Aurora-Elgin, IL.............................................     0.9665
    Kane, IL                                                            
    Kendall, IL                                                         
Austin, TX...................................................     0.9599
    Hays, TX                                                            
    Travis, TX                                                          
    Williamson, TX                                                      
Bakersfield, CA..............................................     1.0868
    Kern, CA                                                            
Baltimore, MD................................................     1.0156
    Anne Arundel, MD                                                    
    Baltimore, MD                                                       
    Baltimore City, MD                                                  
    Carroll, MD                                                         
    Harford, MD                                                         
    Howard, MD                                                          
    Queen Annes, MD                                                     
Bangor, ME...................................................     0.9064
    Penobscot, ME                                                       
Baton Rouge, LA..............................................     0.9089
    Ascension, LA                                                       
    East Baton Rouge, LA                                                
    Livingston, LA                                                      
    West Baton Rouge, LA                                                
Battle Creek, MI.............................................     0.9465
    Calhoun, MI                                                         
Beaumont-Port Arthur, TX.....................................     0.9604
    Hardin, TX                                                          
    Jefferson, TX                                                       
    Orange, TX                                                          
Beaver County, PA............................................     1.0165
    Beaver, PA                                                          
Bellingham, WA...............................................     1.0497
    Whatcom, WA                                                         
Benton Harbor, MI............................................     0.8406
    Berrien, MI                                                         
Bergen-Passaic, NJ...........................................     1.0295
    Bergen, NJ                                                          
    Passaic, NJ                                                         
Billings, MT.................................................     0.9325
    Yellowstone, MT                                                     
Biloxi-Gulfport, MS..........................................     0.8062
    Hancock, MS                                                         
    Harrison, MS                                                        
Binghamton, NY...............................................     0.9260
    Broome, NY                                                          
    Tioga, NY                                                           
Birmingham, AL...............................................     0.8769
    Blount, AL                                                          
    Jefferson, AL                                                       
    Saint Clair, AL                                                     
    Shelby, AL                                                          
    Walker, AL                                                          
Bismarck, ND.................................................     0.8812
    Burleigh, ND                                                        
    Morton, ND                                                          
Bloomington, IN..............................................     0.8639
    Monroe, IN                                                          
Bloomington-Normal, IL.......................................     0.8658
    McLean, IL                                                          
Boise City, ID...............................................     0.9757
    Ada, ID                                                             
Boston-Lawrence-Salem-Lowell-Brockton, MA....................     1.1809
    Essex, MA                                                           
    Middlesex, MA                                                       
    Norfolk, MA                                                         
    Plymouth, MA                                                        
    Suffolk, MA                                                         
Boulder-Longmont, CO.........................................     1.0149
    Boulder, CO                                                         
Bradenton, FL................................................     0.9262
    Manatee, FL                                                         
Brazoria, TX.................................................     0.9314
    Brazoria, TX                                                        
Bremerton, WA................................................     0.9535
    Kitsap, WA                                                          
Bridgeport-Stamford-Norwalk-Danbury..........................     1.2032
    Fairfield, CT                                                       
Brownsville-Harlingen, TX....................................     0.8601
    Cameron, TX                                                         
Bryan-College Station, TX....................................     0.9489
    Brazos, TX                                                          
Buffalo, NY..................................................     0.8908
    Erie, NY                                                            
Burlington, NC...............................................     0.7986
    Alamance, NC                                                        
Burlington, VT...............................................     0.9358

[[Page 46472]]

                                                                        
    Chittenden, VT                                                      
    Grand Isle, VT                                                      
Caguas, PR...................................................     0.4479
    Caguas, PR                                                          
    Gurabo, PR                                                          
    San Lorenz, PR                                                      
    Aguas Buenas, PR                                                    
    Cayey, PR                                                           
    Cidra, PR                                                           
Canton, OH...................................................     0.8811
    Carroll, OH                                                         
    Stark, OH                                                           
Casper, WY...................................................     0.8891
    Natrona, WY                                                         
Cedar Rapids, IA.............................................     0.8907
    Linn, IA                                                            
Champaign-Urbana-Rantoul, IL.................................     0.8745
    Champaign, IL                                                       
Charleston, SC...............................................     0.8331
    Berkeley, SC                                                        
    Charleston, SC                                                      
    Dorchester, SC                                                      
Charleston, WV...............................................     0.9692
    Kanawha, WV                                                         
    Putnam, WV                                                          
Charlotte-Gastonia-Rock Hill, NC-SC..........................     0.9486
    Cabarrus, NC                                                        
    Gaston, NC                                                          
    Lincoln, NC                                                         
    Mecklenburg, NC                                                     
    Rowan, NC                                                           
    Union, NC                                                           
    York, SC                                                            
Charlottesville, VA..........................................     0.9615
    Albermarle, VA                                                      
    Charlottesville City, VA                                            
    Fluvanna, VA                                                        
    Greene, VA                                                          
Chattanooga, TN-GA...........................................     0.9198
    Catoosa, GA                                                         
    Dade, GA                                                            
    Walker, GA                                                          
    Hamilton, TN                                                        
    Marion, TN                                                          
    Sequatchie, TN                                                      
Cheyenne, WY.................................................     0.7908
    Laramie, WY                                                         
Chicago, IL..................................................     1.0518
    Cook, IL                                                            
    Du Page, IL                                                         
    McHenry, IL                                                         
Chico, CA....................................................     1.0981
    Butte, CA                                                           
Cincinnati, OH-KY-IN.........................................     0.9821
    Dearborn, IN                                                        
    Boone, KY                                                           
    Campbell, KY                                                        
    Kenton, KY                                                          
    Clermont, OH                                                        
    Hamilton, OH                                                        
    Warren, OH                                                          
Clarksville-Hopkinsville, TN-KY..............................     0.7319
    Christian, KY                                                       
    Montgomery, TN                                                      
Cleveland, OH................................................     1.0739
    Cuyahoga, OH                                                        
    Geauga, OH                                                          
    Lake, OH                                                            
    Medina, OH                                                          
Colorado Springs, CO.........................................     0.9816
    El Paso, CO                                                         
Columbia, MO.................................................     0.9506
    Boone, MO                                                           
Columbia, SC.................................................     0.8940
    Lexington, SC                                                       
    Richland, SC                                                        
Columbus, GA-AL..............................................     0.7482
    Russell, AL                                                         
    Chattanoochee, GA                                                   
    Muscogee, GA                                                        
Columbus, OH.................................................     0.9673
    Delaware, OH                                                        
    Fairfield, OH                                                       
    Franklin, OH                                                        
    Licking, OH                                                         
    Madison, OH                                                         
    Pickaway, OH                                                        
    Union, OH                                                           
Corpus Christi, TX...........................................     0.8594
    Nueces, TX                                                          
    San Patricio, TX                                                    
Cumberland, MD-WV............................................     0.8188
    Allegany, MD                                                        
    Mineral, WV                                                         
Dallas, TX...................................................     0.9638
    Collin, TX                                                          
    Dallas, TX                                                          
    Denton, TX                                                          
    Ellis, TX                                                           
    Kaufman, TX                                                         
    Rockwall, TX                                                        
Danville, VA.................................................     0.7506
    Danville City, VA                                                   
    Pittsylvania, VA                                                    
Davenport-Rock Island-Moline, IA-IL..........................     0.8471
    Scott, IA                                                           
    Henry, IL                                                           
    Rock Island, IL                                                     
Dayton-Springfield, OH.......................................     0.9664
    Clark, OH                                                           
    Greene, OH                                                          
    Miami, OH                                                           
    Montgomery, OH                                                      
Daytona Beach, FL............................................     0.8943
    Volusia, FL                                                         
Decatur, AL..................................................     0.7487
    Lawrence, AL                                                        
    Morgan, AL                                                          
Decatur, IL..................................................     0.8286
    Macon, IL                                                           
Denver, CO...................................................     1.0758
    Adams, CO                                                           
    Arapahoe, CO                                                        
    Denver, CO                                                          
    Douglas, CO                                                         
    Jefferson, CO                                                       
Des Moines, IA...............................................     0.9171
    Dallas, IA                                                          
    Polk, IA                                                            
    Warren, IA                                                          
Detroit, MI..................................................     1.0824
    Lapeer, MI                                                          
    Livingston, MI                                                      
    Macomb, MI                                                          
    Monroe, MI                                                          
    Oakland, MI                                                         
    Saint Clair, MI                                                     
    Wayne, MI                                                           
Dothan, AL...................................................     0.7555
    Dale, AL                                                            
    Houston, AL                                                         
Dubuque, IA..................................................     0.8374
    Dubuque, IA                                                         
Duluth, MN-WI................................................     0.9517
    St. Louis, MN                                                       
    Douglas, WI                                                         
Eau Claire, WI...............................................     0.8478
    Chippewa, WI                                                        
    Eau Claire, WI                                                      
El Paso, TX..................................................     0.8714
    El Paso, TX                                                         
Elkhart-Goshen, IN...........................................     0.8949
    Elkhart, IN                                                         
Elmira, NY...................................................     0.8810
    Chemung, NY                                                         
Enid, OK.....................................................     0.8912
    Garfield, OK                                                        
Erie, PA.....................................................     0.9155
    Erie, PA                                                            
Eugene-Springfield, OR.......................................     1.0164
    Lane, OR                                                            
Evansville, IN-KY............................................     0.9276
    Posey, IN                                                           
    Vanderburgh, IN                                                     
    Warrick, IN                                                         
    Henderson, KY                                                       
Fargo-Moorhead, ND-MN........................................     0.9707
    Clay, MN                                                            
    Cass, ND                                                            
Fayetteville, NC.............................................     0.8296
    Cumberland, NC                                                      
Fayetteville-Springdale, AR..................................     0.7990
    Washington, AR                                                      
Flint, MI....................................................     1.1544
    Genesee, MI                                                         
Florence, AL.................................................     0.7679
    Colbert, AL                                                         
    Lauderdale, AL                                                      
Florence, SC.................................................     0.8429
    Florence, SC                                                        
Fort Collins-Loveland, CO....................................     1.0238
    Larimor, CO                                                         
Ft Lauderdale-Hollywood-Pompano Beach, FL....................     1.0356
    Broward, FL                                                         
Fort Myers-Cape Coral, FL....................................     0.9799
    Lee, FL                                                             
Fort Pierce, FL..............................................     1.1041
    Martin, FL                                                          
    St. Lucie, FL                                                       
Fort Smith, AR-OK............................................     0.7931
    Crawford, AR                                                        
    Sebastian, AR                                                       
    Sequoyah, OK                                                        
Fort Walton Beach, FL........................................     0.8916
    Okaloosa, FL                                                        
Fort Wayne, IN...............................................     0.8901
    Allen, IN                                                           
    De Kalb, IN                                                         
    Whitley, IN                                                         
Forth Worth-Arlington, TX....................................     0.9747

[[Page 46473]]

                                                                        
    Johnson, TX                                                         
    Parker, TX                                                          
    Tarrant, TX                                                         
Fresno, CA...................................................     1.0737
    Fresno, CA                                                          
Gadsden, AL..................................................     0.8199
    Etowah, AL                                                          
Gainesville, FL..............................................     0.8798
    Alachua, FL                                                         
    Bradford, FL                                                        
Galveston-Texas City, TX.....................................     0.9431
    Galveston, TX                                                       
Gary-Hammond, IN.............................................     0.9866
    Lake, IN                                                            
    Porter, IN                                                          
Glens Falls, NY..............................................     0.9231
    Warren, NY                                                          
    Washington, NY                                                      
Grand Forks, ND..............................................     0.9577
    Grand Forks, ND                                                     
Grand Rapids, MI.............................................     0.9883
    Kent, MI                                                            
    Ottawa, MI                                                          
Great Falls, MT..............................................     0.9992
    Cascade, MT                                                         
Greeley, CO..................................................     0.9358
    Weld, CO                                                            
Green Bay, WI................................................     0.9585
    Brown, WI                                                           
Greensboro-Winston-Salem-High Point, NC......................     0.9165
    Davidson, NC                                                        
    Davie, NC                                                           
    Forsyth, NC                                                         
    Guilford, NC                                                        
    Randolph, NC                                                        
    Stokes, NC                                                          
    Yadkin, NC                                                          
Greenville-Spartanburg, SC...................................     0.8923
    Greenville, SC                                                      
    Pickens, SC                                                         
    Spartanburg, SC                                                     
Hagerstown, MD...............................................     0.9157
    Washington, MD                                                      
Hamilton-Middletown, OH......................................     0.9384
    Butler, OH                                                          
Harrisburg-Lebanon-Carlisle, PA..............................     0.9919
    Cumberland, PA                                                      
    Dauphin, PA                                                         
    Lebanon, PA                                                         
    Perry, PA                                                           
Hartford-Middletown-New Britain-Bristol, CT..................     1.1916
    Hartford, CT                                                        
    Litchfield, CT                                                      
    Middlesex, CT                                                       
    Tolland, CT                                                         
Hickory, NC..................................................     0.8741
    Alexander, NC                                                       
    Burke, NC                                                           
    Catawba, NC                                                         
Honolulu, HI.................................................     1.1580
    Honolulu, HI                                                        
Houma-Thibodaux, LA..........................................     0.7344
    Lafourche, LA                                                       
    Terrebonne, LA                                                      
Houston, TX..................................................     0.9935
    Fort Bend, TX                                                       
    Harris, TX                                                          
    Liberty, TX                                                         
    Montgomery, TX                                                      
    Waller, TX                                                          
Huntington-Ashland, WV-KY-OH.................................     0.9438
    Boyd, KY                                                            
    Carter, KY                                                          
    Greenup, KY                                                         
    Lawrence, OH                                                        
    Cabell, WV                                                          
    Wayne, WV                                                           
Huntsville, AL...............................................     0.8835
    Madison, AL                                                         
Indianapolis, IN.............................................     0.9663
    Boone, IN                                                           
    Hamilton, IN                                                        
    Hancock, IN                                                         
    Hendricks, IN                                                       
    Johnson, IN                                                         
    Marion, IN                                                          
    Morgan, IN                                                          
    Shelby, IN                                                          
Iowa City, IA................................................     0.9528
    Johnson, IA                                                         
Jackson, MI..................................................     0.9664
    Jackson, MI                                                         
Jackson, MS..................................................     0.7733
    Hinds, MS                                                           
    Madison, MS                                                         
    Rankin, MS                                                          
Jackson, TN..................................................     0.7910
    Madison, TN                                                         
Jacksonville, FL.............................................     0.9051
    Clay, FL                                                            
    Duval, FL                                                           
    Nassau, FL                                                          
    St. Johns, FL                                                       
Jacksonville, NC.............................................     0.7154
    Onslow, NC                                                          
Jamestown-Dunkirk, NY........................................     0.7735
    Chautaqua, NY                                                       
Janesville-Beloit, WI........................................     0.8466
    Rock, WI                                                            
Jersey City, NJ..............................................     1.0526
    Hudson, NJ                                                          
Johnson City-Kingsport-Bristol, TN-VA........................     0.8668
    Carter, TN                                                          
    Hawkins, TN                                                         
    Sullivan, TN                                                        
    Unicoi, TN                                                          
    Washington, TN                                                      
    Bristol City, VA                                                    
    Scott, VA                                                           
    Washington, VA                                                      
Johnstown, PA................................................     0.9067
    Cambria, PA                                                         
    Somerset, PA                                                        
Joliet, IL...................................................     1.0278
    Grundy, IL                                                          
    Will, IL                                                            
Joplin, MO...................................................     0.7957
    Jasper, MO                                                          
    Newton, MO                                                          
Kalamazoo, MI................................................     1.1709
    Kalamazoo, MI                                                       
Kankakee, IL.................................................     0.8489
    Kankakee, IL                                                        
Kansas City, KS-MO...........................................     0.9588
    Johnson, KS                                                         
    Leavenworth, KS                                                     
    Miami, KS                                                           
    Wyandotte, KS                                                       
    Cass, MO                                                            
    Clay, MO                                                            
    Jackson, MO                                                         
    Lafayette, MO                                                       
    Platte, MO                                                          
    Ray, MO                                                             
Kenosha, WI..................................................     0.8855
    Kenosha, WI                                                         
Killeen-Temple, TX...........................................     1.1295
    Bell, TX                                                            
    Coryell, TX                                                         
Knoxville, TN................................................     0.8693
    Anderson, TN                                                        
    Blount, TN                                                          
    Grainger, TN                                                        
    Jefferson, TN                                                       
    Knox, TN                                                            
    Sevier, TN                                                          
    Union, TN                                                           
Kokomo, IN...................................................     0.9435
    Howard, IN                                                          
    Tipton, IN                                                          
LaCrosse, WI.................................................     0.8956
    LaCrosse, WI                                                        
Lafayette, LA................................................     0.8227
    Lafayette, LA                                                       
    St. Martin, LA                                                      
Lafayette, IN................................................     0.8432
    Tippecanoe, IN                                                      
Lake Charles, LA.............................................     0.8374
    Calcasieu, LA                                                       
Lake County, IL..............................................     0.9994
    Lake, IL                                                            
Lakeland-Winter Haven, FL....................................     0.8171
    Polk, FL                                                            
Lancaster, PA................................................     0.9258
    Lancaster, PA                                                       
Lansing-East Lansing, MI.....................................     1.0222
    Clinton, MI                                                         
    Eaton, MI                                                           
    Ingham, MI                                                          
Laredo, TX...................................................     0.7278
    Webb, TX                                                            
Las Cruces, NM...............................................     0.7909
    Dona Ana, NM                                                        
Las Vegas, NV................................................     1.0631
    Clark, NV                                                           
Lawrence, KS.................................................     0.8937
    Douglas, KS                                                         
Lawton, OK...................................................     0.8388
    Comanche, OK                                                        
Lewiston-Auburn, ME..........................................     0.9057
    Androscoggin, ME                                                    
Lexington-Fayette, KY........................................     0.8446
    Bourbon, KY                                                         
    Clark, KY                                                           
    Fayette, KY                                                         
    Jessamine, KY                                                       
    Scott, KY                                                           
    Woodford, KY                                                        
Lima, OH.....................................................     0.8062
    Allen, OH                                                           
    Auglaize, OH                                                        
Lincoln, NE..................................................     0.8956
    Lancaster, NE                                                       
Little Rock-North Little Rock, AR............................     0.8420

[[Page 46474]]

                                                                        
    Faulkner, AR                                                        
    Lonoke, AR                                                          
    Pulaski, AR                                                         
    Saline, AR                                                          
Longview-Marshall, TX........................................     0.8691
    Gregg, TX                                                           
    Harrison, TX                                                        
Lorain-Elyria, OH............................................     0.8969
    Lorain, OH                                                          
Los Angeles-Long Beach, CA...................................     1.2354
    Los Angeles, CA                                                     
Louisville, KY-IN............................................     0.9092
    Clark, IN                                                           
    Floyd, IN                                                           
    Harrison, IN                                                        
    Bullitt, KY                                                         
    Jefferson, KY                                                       
    Oldham, KY                                                          
    Shelby, KY                                                          
Lubbock, TX..................................................     0.8790
    Lubbock, TX                                                         
Lynchburg, VA................................................     0.8544
    Amherst, VA                                                         
    Campbell, VA                                                        
    Lynchburg City, VA                                                  
Macon-Warner Robins, GA......................................     0.8804
    Bibb, GA                                                            
    Huston, GA                                                          
    Jones, GA                                                           
    Peach, GA                                                           
Madison, WI..................................................     1.0311
    Dane, WI                                                            
Manchester-Nashua, NH........................................     1.0261
    Hillsborough, NH                                                    
    Merrimack, NH                                                       
Mansfield, OH................................................     0.8392
    Richland, OH                                                        
Mayaguez, PR.................................................     0.4771
    Anasco, PR                                                          
    Cabo Rojo, PR                                                       
    Hormigueros, PR                                                     
    Mayaguez, PR                                                        
    San German, PR                                                      
McAllen-Edinburg-Mission, TX.................................     0.7715
    Hidalgo, TX                                                         
Medford, OR..................................................     1.0045
    Jackson, OR                                                         
Melbourne-Titusville Fl......................................     0.9199
    Brevard, Fl                                                         
Memphis, TN-AR-MS............................................     0.9060
    Crittenden, AR                                                      
    De Soto, MS                                                         
    Shelby, TN                                                          
    Tipton, TN                                                          
Merced, CA...................................................     1.0312
    Merced, CA                                                          
Miami-Hialeah, FL............................................     1.0188
    Dade, FL                                                            
Middlesex-Somerset-Hunterdon, NJ.............................     1.0401
    Hunterdon, NJ                                                       
    Middlesex, NJ                                                       
    Somerset, NJ                                                        
Midland, TX..................................................     1.0377
    Midland, TX                                                         
Milwaukee, WI................................................     0.9719
    Milwaukee, WI                                                       
    Ozaukee, WI                                                         
    Washington, WI                                                      
    Waukesha, WI                                                        
Minneapolis-St Paul, MN-WI...................................     1.0818
    Anoka, MN                                                           
    Carver, MN                                                          
    Chisago, MN                                                         
    Dakota, MN                                                          
    Hennepin, MN                                                        
    Isanti, MN                                                          
    Ramsey, MN                                                          
    Scott, MN                                                           
    Washington, MN                                                      
    Wright, MN                                                          
    St. Croix, WI                                                       
Mobile, AL...................................................     0.8319
    Baldwin, AL                                                         
    Mobile, AL                                                          
Modesto, CA..................................................     1.1577
    Stanislaus, CA                                                      
Monmouth-Ocean, NJ...........................................     0.9900
    Monmouth, NJ                                                        
    Ocean, NJ                                                           
Monroe, LA...................................................     0.7864
    Ouachita, LA                                                        
Montgomery, AL...............................................     0.7738
    Autauga, AL                                                         
    Elmore, AL                                                          
    Montgomery, AL                                                      
Muncie, IN...................................................     0.8068
    Delaware, IN                                                        
Muskegon, MI.................................................     0.9568
    Muskegon, MI                                                        
Naples, FL...................................................     1.0324
    Collier, FL                                                         
Nashville, TN................................................     0.9397
    Cheatham, TN                                                        
    Davidson, TN                                                        
    Dickson, TN                                                         
    Robertson, TN                                                       
    Rutherford TN                                                       
    Sumner, TN                                                          
    Williamson, TN                                                      
    Wilson, TN                                                          
Nassau-Suffolk, NY...........................................     1.2938
    Nassau, NY                                                          
    Suffolk, NY                                                         
New Bedford-Fall River-Attleboro, MA.........................     1.0002
    Bristol, MA                                                         
New Haven Waterbury-Meriden, CT..............................     1.2095
    New Haven, CT                                                       
New London, London-Norwich...................................     1.1571
    New London, CT                                                      
New Orleans, LA..............................................     0.8908
    Jefferson, LA                                                       
    Orleans, LA                                                         
    St. Bernard, LA                                                     
    St. Charles, LA                                                     
    St. John The Baptist, LA                                            
    St. Tammany, LA                                                     
New York, NY.................................................     1.3460
    Bronx, NY                                                           
    Kings, NY                                                           
    New York City, NY                                                   
    Putnam, NY                                                          
    Queens, NY                                                          
    Richmond, NY                                                        
    Rockland, NY                                                        
    Westchester, NY                                                     
Newark, NJ...................................................     1.1232
    Essex, NJ                                                           
    Morris, NJ                                                          
    Sussex, NJ                                                          
    Union, NJ                                                           
Niagara Falls, NY............................................     0.8382
    Niagara, NY                                                         
Norfolk-Virginia Beach-Newport News, VA......................     0.8515
    Chesapeake City, VA                                                 
    Gloucester, VA                                                      
    Hampton City, VA                                                    
    James City Co., VA                                                  
    Newport News City, VA                                               
    Norfolk City, VA                                                    
    Poquoson, VA                                                        
    Portsmouth City, VA                                                 
    Suffolk City, VA                                                    
    Virginia Beach City, VA                                             
    Williamsburg City, VA                                               
    York, VA                                                            
Oakland, CA..................................................     1.4283
    Alameda, CA                                                         
    Contra Costa, CA                                                    
Ocala, FL....................................................     0.8614
    Marion, FL                                                          
Odessa, TX...................................................     1.0817
    Ector, TX                                                           
Oklahoma City, OK............................................     0.9145
    Canadian, OK                                                        
    Cleveland, OK                                                       
    Logan, OK                                                           
    McClain, OK                                                         
    Oklahoma, OK                                                        
    Pottawatomie, OK                                                    
Olympia, WA..................................................     1.1002
    Thurston, WA                                                        
Omaha, NE-IA.................................................     0.8989
    Pottawattamie, IA                                                   
    Douglas, NE                                                         
    Sarpy, NE                                                           
    Washington, NE                                                      
Orange, County, NY...........................................     0.9653
    Orange, NY                                                          
Orlando, FL..................................................     0.9621
    Orange, FL                                                          
    Osceola, FL                                                         
    Seminole, FL                                                        
Owensboro, KY................................................     0.8114
    Daviess, KY                                                         
Oxnard-Ventura, CA...........................................     1.2309
    Ventura, CA                                                         
Panama City, FL..............................................     0.8632
    Bay, FL                                                             
Parkersburg-Marietta, WV-OH..................................     0.8540
    Washington, OH                                                      
    Wood, WV                                                            
Pascagoula, MS...............................................     0.8755
    Jackson, MS                                                         
Pensacola, FL................................................     0.8623

[[Page 46475]]

                                                                        
    Escambia, FL                                                        
    Santa Rosa, FL                                                      
Peoria, IL...................................................     0.8710
    Peoria, IL                                                          
    Tazewell, IL                                                        
    Woodford, IL                                                        
Philadelphia, PA-NJ..........................................     1.0952
    Burlington, NJ                                                      
    Camden, NJ                                                          
    Gloucester, NJ                                                      
    Bucks, PA                                                           
    Chester, PA                                                         
    Delaware, PA                                                        
    Montgomery, PA                                                      
    Philadelphia, PA                                                    
Phoenix, AZ..................................................     1.0429
    Maricopa, AZ                                                        
Pine Bluff, AR...............................................     0.7872
    Jefferson, AR                                                       
Pittsburgh, PA...............................................     1.0127
    Allegheny, PA                                                       
    Fayette, PA                                                         
    Washington, PA                                                      
    Westmoreland, PA                                           .........
Pittsfield, MA...............................................     1.0782
    Berkshire, MA                                                       
Ponce, PR....................................................     0.4601
    Juana Diaz, PR                                                      
    Ponce, PR                                                           
Portland, ME.................................................     0.9292
    Cumberland, ME                                                      
    Sagadahoc, ME                                                       
    York, ME                                                            
Portland, OR.................................................     1.1576
    Clackamas, OR                                                       
    Multnomah, OR                                                       
    Washington, OR                                                      
    Yamhill, OR                                                         
Portsmouth-Dover-Rochester, NH...............................     1.0080
    Rockingham, NH                                                      
    Strafford, NH                                                       
Poughkeepsie, NY.............................................     1.0447
    Dutchess, NY                                                        
Providence-Pawtucket-Woonsocket, RI..........................     1.0630
    Bristol, RI                                                         
    Kent, RI                                                            
    Newport, RI                                                         
    Providence, RI                                                      
    Washington, RI                                                      
Provo-Orem, UT...............................................     1.0230
    Utah, UT                                                            
Pueblo, CO...................................................     0.8722
    Pueblo, CO                                                          
Racine, WI...................................................     0.8849
    Racine, WI                                                          
Raleigh-Durham, NC...........................................     0.9465
    Durham, NC                                                          
    Franklin, NC                                                        
    Orange, NC                                                          
    Wake, NC                                                            
Rapid City, SD...............................................     0.8400
    Pennington, SD                                                      
Reading, PA..................................................     0.8814
    Berks, PA                                                           
Redding, CA..................................................     1.0549
    Shasta, CA                                                          
Reno, NV.....................................................     1.1618
    Washoe, NV                                                          
Richland-Kennewick, WA.......................................     0.9402
    Benton, WA                                                          
    Franklin, WA                                                        
Richmond-Petersburg, VA......................................     0.9417
    Charles City Co., VA                                                
    Chesterfield, VA                                                    
    Colonial Heights City, VA                                           
    Dinwiddie, VA                                                       
    Goochland, VA                                                       
    Hanover, VA                                                         
    Henrico, VA                                                         
    Hopewell City, VA                                                   
    New Kent, VA                                                        
    Petersburg City, VA                                                 
    Powhatan, VA                                                        
    Prince George, VA                                                   
    Richmond City, VA                                                   
Riverside-San Bernardino, CA.................................     1.1160
    Riverside, CA                                                       
    San Bernardino, CA                                                  
Roanoke, VA..................................................     0.8284
    Botetourt, VA                                                       
    Roanoke, VA                                                         
    Roanoke City, VA                                                    
    Salem City, VA                                                      
Rochester, MN................................................     1.1030
    Olmsted, MN                                                         
Rochester, NY................................................     0.9710
    Livingston, NY                                                      
    Monroe, NY                                                          
    Ontario, NY                                                         
    Orleans, NY                                                         
    Wayne, NY                                                           
Rockford, IL.................................................     0.9283
    Boone, IL                                                           
    Winnebago, IL                                                       
Sacramento, CA...............................................     1.2232
    Eldorado, CA                                                        
    Placer, CA                                                          
    Sacramento, CA                                                      
    Yolo, CA                                                            
Saginaw-Bay City-Midland, MI.................................     1.0451
    Bay, MI                                                             
    Midland, MI                                                         
    Saginaw, MI                                                         
St. Cloud, MN................................................     0.9420
    Benton, MN                                                          
    Sherburne, MN                                                       
    Stearns, MN                                                         
St. Joseph, MO...............................................     0.9414
    Buchanan, MO                                                        
St. Louis, MO-IL.............................................     0.9388
    Clinton, IL                                                         
    Jersey, IL                                                          
    Madison, IL                                                         
    Monroe, IL                                                          
    St. Clair, IL                                                       
    Franklin, MO                                                        
    Jefferson, MO                                                       
    St. Charles, MO                                                     
    St. Louis, MO                                                       
    St. Louis City, MO                                                  
    Sullivan City, MO                                                   
Salem, OR....................................................     1.0445
    Marion, OR                                                          
    Polk, OR                                                            
Salinas-Seaside-Monterey, CA.................................     1.3041
    Monterey, CA                                                        
Salt Lake City-Ogden, UT.....................................     0.9932
    Davis, UT                                                           
    Salt Lake, UT                                                       
    Weber, UT                                                           
San Angelo, TX...............................................     0.8139
    Tom Green, TX                                                       
San Antonio, TX..............................................     0.8452
    Bexar, TX                                                           
    Comal, TX                                                           
    Guadalupe, TX                                                       
San Diego, CA................................................     1.1934
    San Diego, CA                                                       
San Francisco, CA............................................     1.4539
    Marin, CA                                                           
    San Francisco, CA                                                   
    San Mateo, CA                                                       
San Jose, CA.................................................     1.4900
    Santa Clara, CA                                                     
San Juan, PR.................................................     0.4987
    Barcelona, PR                                                       
    Bayoman, PR                                                         
    Canovanas, PR                                                       
    Carolina, PR                                                        
    Catano, PR                                                          
    Corozal, PR                                                         
    Dorado, PR                                                          
    Fajardo, PR                                                         
    Florida, PR                                                         
    Guaynabo, PR                                                        
    Humacao, PR                                                         
    Juncos, PR                                                          
    Los Piedras, PR                                                     
    Loiza, PR                                                           
    Luguillo, PR                                                        
    Manati, PR                                                          
    Naranjito, PR                                                       
    Rio Grande, PR                                                      
    San Juan, PR                                                        
    Toa Alta, PR                                                        
    Toa Baja, PR                                                        
    Trojillo Alto, PR                                                   
    Vega Alta, PR                                                       
    Vega Baja, PR                                                       
Santa Barbara-Santa Maria-Lompoc, CA.........................     1.1768
    Santa Barbara, CA                                                   
Santa Cruz, CA...............................................     1.2784
    Santa Cruz, CA                                                      
Santa Fe, NM.................................................     0.9139
    Los Alamos, NM                                                      
    Santa Fe, NM                                                        
Santa Rosa-Petaluma, CA......................................     1.2957
    Sonoma, CA                                                          
Sarasota, FL.................................................     0.9781
    Sarasota, FL                                                        
Savannah, GA.................................................     0.8327
    Chatham, GA                                                         
    Effingham, GA                                                       
Scranton, Wilkes Barre, PA...................................     0.8952
    Columbia, PA                                                        
    Lackawanna, PA                                                      
    Luzerne, PA                                                         
    Monroe, PA                                                          
    Wyoming, PA                                                         
Seattle, WA..................................................     1.0871
    King, WA                                                            
    Snohomish, WA                                                       
Sharon, PA...................................................     0.9061
    Mercer, PA                                                          
Sheboygan, WI................................................     0.8872

[[Page 46476]]

                                                                        
    Sheboygan, WI                                                       
Sherman-Denison, TX..........................................     0.9089
    Grayson, TX                                                         
Shreveport, LA...............................................     0.9299
    Bossier, LA                                                         
    Caddo, LA                                                           
Sioux City, IA-NE............................................     0.8504
    Woodbury, IA                                                        
    Dakota, NE                                                          
Sioux Falls, SD..............................................     0.8833
    Minnehaha, SD                                                       
South Bend-Mishawaka, IN.....................................     1.0067
    St. Joseph, IN                                                      
Spokane, WA..................................................     1.0691
    Spokane, WA                                                         
Springfield, IL..............................................     0.9295
    Menard, IL                                                          
    Sangamon, IL                                                        
Springfield, MO..............................................     0.8082
    Christian, MO                                                       
    Greene, MO                                                          
Springfield, MA..............................................     1.0316
    Hampden, MA                                                         
    Hampshire, MA                                                       
State College, PA............................................     0.9901
    Centre, PA                                                          
Steubenville-Weirton, OH-WV..................................     0.8712
    Jefferson, OH                                                       
    Brooke, WV                                                          
    Hancock, WV                                                         
Stockton, CA.................................................     1.1612
    San Joaquin, CA                                                     
Syracuse, NY.................................................     0.9917
    Madison, NY                                                         
    Onondaga, NY                                                        
    Oswego, NY                                                          
Tacoma, WA...................................................     1.0317
    Pierce, WA                                                          
Tallahassee, FL..............................................     0.9220
    Gadsden, FL                                                         
    Leon, FL                                                            
Tampa-St. Petersburg-Clearwater, FL..........................     0.9188
    Hernando, FL                                                        
    Hillsborough, FL                                                    
    Pasco, FL                                                           
    Pinellas, FL                                                        
Terre Haute, IN..............................................     0.8758
    Clay, IN                                                            
    Vigo, IN                                                            
Texarkana, TX-AR.............................................     0.7892
    Miller, AR                                                          
    Bowie, TX                                                           
Toledo, OH...................................................     1.0097
    Fulton, OH                                                          
    Lucas, OH                                                           
    Wood, OH                                                            
Topeka, KS...................................................     0.9302
    Shawnee, KS                                                         
Trenton, NJ..................................................     1.0038
    Mercer, NJ                                                          
Tucson, AZ...................................................     0.9591
    Pima, AZ                                                            
Tulsa, OK....................................................     0.8532
    Creeks, OK                                                          
    Osage, OK                                                           
    Rogers, OK                                                          
    Tulsa, OK                                                           
    Wagoner, OK                                                         
Tuscaloosa, AL...............................................     0.8521
    Tuscaloosa, AL                                                      
Tyler, TX....................................................     0.9838
    Smith, TX                                                           
Utica-Rome, NY...............................................     0.8512
    Herkimer, NY                                                        
    Oneida, NY                                                          
Vallejo-Fairfield-Napa, CA...................................     1.3203
    Napa, CA                                                            
    Solano, CA                                                          
Vancouver, WA................................................     1.0798
    Clark, WA                                                           
Victoria, TX.................................................     0.8994
    Victoria, TX                                                        
Vineland-Millville-Bridgeton, NJ.............................     0.9760
    Cumberland, NJ                                                      
Visalia-Tulare-Porterville, CA...............................     1.0392
    Tulare, CA                                                          
Waco, TX.....................................................     0.7814
    McLennan, TX                                                        
Washington, DC-MD-VA.........................................     1.0941
    District of Columbia, DC                                            
    Calvert, MD                                                         
    Charles, MD                                                         
    Frederick, MD                                                       
    Montgomery, MD                                                      
    Prince Georges, MD                                                  
    Alexandria City, VA                                                 
    Arlington, VA                                                       
    Fairfax, VA                                                         
    Fairfax City, VA                                                    
    Falls Church City, VA                                               
    Loudoun, VA                                                         
    Manassas City, VA                                                   
    Manassas Park City, VA                                              
    Prince William, VA                                                  
    Stafford, VA                                                        
Waterloo-Cedar Falls, IA.....................................     0.8642
    Black Hawk, IA                                                      
    Bremer, IA                                                          
Wausau, WI...................................................     0.9748
    Marathon, WI                                                        
West Palm Beach-Boca Raton-Delray Beach, FL..................     1.0135
    Palm Beach, FL                                                      
Wheeling, WV-OH..............................................     0.8067
    Belmont, OH                                                         
    Marshall, WV                                                        
    Ohio, WV                                                            
Wichita, KS..................................................     0.9809
    Butler, KS                                                          
    Harvey, KS                                                          
    Sedgwick, KS                                                        
Wichita Falls, TX............................................     0.8172
    Wichita, TX                                                         
Williamsport, PA.............................................     0.8864
    Lycoming, PA                                                        
Wilmington, DE-NJ-MD.........................................     1.0869
    New Castle, DE                                                      
    Cecil, MD                                                           
    Salem, NJ                                                           
Wilmington, NC...............................................     0.8712
    New Hanover, NC                                                     
Worcester-Fitchburg-Leominster, MA...........................     1.0826
    Worcester, MA                                                       
Yakima, WA...................................................     1.0111
    Yakima, WA                                                          
York, PA.....................................................     0.9021
    Adams, PA                                                           
    York, PA                                                            
Youngstown-Warren, OH........................................     0.9866
    Mahoning, OH                                                        
    Trumbull, OH                                                        
Yuba City, CA................................................     1.0167
    Sutter, CA                                                          
    Yuba, CA                                                            
Yuma, AZ.....................................................     0.8885
    Yuma, AZ                                                            
------------------------------------------------------------------------


                  Table VI.--Wage Index for Rural Areas                 
------------------------------------------------------------------------
                                                                  Wage  
                       Non-urban areas                           index  
------------------------------------------------------------------------
ALABAMA......................................................     0.7121
ALASKA.......................................................     1.3426
ARIZONA......................................................     0.8747
ARKANSAS.....................................................     0.6966
CALIFORNIA...................................................     1.0142
COLORADO.....................................................     0.8415
CONNECTICUT..................................................     1.1905
DELAWARE.....................................................     0.8572
FLORIDA......................................................     0.8730
GEORGIA......................................................     0.7767
HAWAII.......................................................     0.9618
IDAHO........................................................     0.8953
ILLINOIS.....................................................     0.7700
INDIANA......................................................     0.7806
IOWA.........................................................     0.7532
KANSAS.......................................................     0.7446
KENTUCKY.....................................................     0.7793
LOUISIANA....................................................     0.7384
MAINE........................................................     0.8328
MARYLAND.....................................................     0.8061
MASSACHUSETTS................................................     1.1654
MICHIGAN.....................................................     0.8826
MINNESOTA....................................................     0.8309
MISSISSIPPI..................................................     0.6957
MISSOURI.....................................................     0.7249
MONTANA......................................................     0.8255
NEBRASKA.....................................................     0.6995
NEVADA.......................................................     0.9702
NEW HAMPSHIRE................................................     0.9547
NEW JERSEY...................................................      (\1\)
NEW MEXICO...................................................     0.8318
NEW YORK.....................................................     0.8402
NORTH CAROLINA...............................................     0.7936
NORTH DAKOTA.................................................     0.7719
OHIO.........................................................     0.8453
OKLAHOMA.....................................................     0.7400
OREGON.......................................................     0.9607
PENNSYLVANIA.................................................     0.8613
PUERTO RICO..................................................  \2\ 0.433
                                                                       3
RHODE ISLAND.................................................      (\1\)
SOUTH CAROLINA...............................................     0.7650
SOUTH DAKOTA.................................................     0.7168
TENNESSEE....................................................     0.7340
TEXAS........................................................     0.7591
UTAH.........................................................     0.8983
VERMONT......................................................     0.9035
VIRGINIA.....................................................     0.7815
VIRGIN ISLANDS...............................................  \2\ 0.573
                                                                       4
WASHINGTON...................................................     0.9635
WEST VIRGINIA................................................     0.8488
WISCONSIN....................................................     0.8447

[[Page 46477]]

                                                                        
WYOMING......................................................    0.8457 
------------------------------------------------------------------------
\1\ All counties within State are classified urban.                     
\2\ Approximate value for area.                                         

V. Impact Statement

    For notices such as this, we generally prepare a regulatory 
flexibility analysis that is consistent with the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601 through 612) unless we certify that a notice 
will not have a significant economic impact on a substantial number of 
small entities. For purposes of the RFA, all SNFs are considered to be 
small entities. Individuals and States are not included in the 
definition of a small entity.
    The purpose of the July 21, 1995 final rule was to allow SNFs that 
provide fewer than 1,500 days of care to Medicare beneficiaries in a 
cost reporting period to have the option of receiving prospectively 
determined payment rates in the following cost reporting period. In our 
analysis of the impact of the July 21 final rule (60 FR 37593), we 
noted that Medicare payments to SNFs constitute only about 5.3 percent 
of total SNF revenues and indicated that the rule would have only a 
small impact on those revenues. We estimate that the prospectively 
determined payment rates contained in this notice will result in a cost 
to the Medicare program of $10 to $20 million for FY 1997. These costs 
represent the difference between estimated aggregate payments to SNFs 
that elect to be paid under the prospectively determined payment rates 
and estimated aggregate payments to the same SNFs if paid on a 
reasonable cost basis under the routine SNF cost limits. Thus, we 
continue to believe that this optional payment system will have a 
positive impact on small entities, while easing their cost reporting 
burden.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a final notice such as this may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. Such an analysis must conform to the provisions of 
section 604 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a Metropolitan Statistical Area and has fewer than 50 beds.
    We are not preparing analyses for either the RFA or section 1102(b) 
of the Act because we have determined, and we certify, that this final 
notice will not have a significant economic impact on a substantial 
number of small entities or a significant impact on the operations of a 
substantial number of small rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
final notice was reviewed by the Office of Management and Budget.
    Under the provisions of Public Law 104-121, we have determined that 
this notice is not a major rule.

VI. Other Required Information

A. Collection of Information Requirements

    This final notice with comment period does not impose information 
collection and recordkeeping requirements. Consequently, it need not be 
reviewed by the Office of Management and Budget under the authority of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

B. Waiver of Proposed Notice and 30-Day Delay in the Effective Date

    In adopting notices such as this, we ordinarily publish a proposed 
notice in the Federal Register with a 60-day period for public comment 
as required under section 1871(b)(1) of the Act. We also normally 
provide a delay of 30 days in the effective date for documents such as 
this. However, we may waive these procedures if we find good cause that 
prior notice and comment or a delay in the effective date are 
impracticable, unnecessary, or contrary to the public interest.
    As discussed in section II of this notice, we have used the same 
basic methodology to develop this schedule of rates that was used in 
setting the rates published in section 2828 of the Provider 
Reimbursement Manual for cost reporting periods beginning in Federal 
fiscal year 1993. As discussed above, section 13503(b) of OBRA 1993 
delayed the update to the schedule of prospectively determined payment 
rates until Federal fiscal year 1996. However, the delay in passing the 
proposed Federal fiscal year 1996 budget legislation, which contained 
provisions affecting the Federal fiscal year 1996 and Federal fiscal 
year 1997 prospectively determined payment rates, resulted in a delay 
in publishing updated Federal fiscal year 1996 rates. Regardless of 
that delay and in conformance with the clear direction of section 
1888(d) of the Act and Sec. 413.320, this notice announces the update 
to the schedule of prospectively determined payment rates for SNF 
inpatient service costs for cost reporting periods beginning in Federal 
fiscal year 1997. However, given the publishing time constraints 
mandated in Sec. 413.320, it would not have been possible to publish a 
proposed notice and still implement the updated prospectively 
determined payment rates set forth in this notice. To do so would have 
been impractical, unnecessary, and contrary to the public interest. 
Therefore, we find good cause to waive publication of a proposed notice 
and the 30-day delay in the effective date of this notice with comment 
period. However, we are providing a 60-day period for public comment, 
as indicated at the beginning of this notice.

C. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this notice, and, if we proceed with a subsequent document, 
we will respond to the comments in that document.

                 Appendix.--Derivation of ``Market Basket'' Index for SNF Routine Service Costs                 
----------------------------------------------------------------------------------------------------------------
                                     Relative                                                                   
        Category of costs              \1\                           Price variable used \2\                    
                                    importance                                                                  
---------------------------------------1993---------------------------------------------------------------------
Payroll Expense..................         64.0  Percentage changes in average hourly earnings of employees in   
                                                 nursing and personal care facility. (SIC 805) Source: U.S.     
                                                 Dept. of Labor, Bureau of Labor Statistics, Employment and     
                                                 Earnings (monthly). Table C-2.                                 

[[Page 46478]]

                                                                                                                
Employee Benefits................          7.8  Supplements to wages and salaries per worker in nonagricultural 
                                                 establishments. For supplements to wages. Source: U.S. Dept. of
                                                 Commerce, Bureau of Economic Analysis, Survey of Current       
                                                 Business. Table 1.11.                                          
                                                For total employment. Source: U.S. Dept. of Labor, Bureau of    
                                                 Labor Statistics, Employment and Earnings (monthly). Table B-4.
Food.............................          7.6  Processed foods and feeds component of producer price index.    
                                                 Source: U.S. Dept. of Labor, Bureau of Labor Statistics,       
                                                 Monthly Labor Review, Table 23.                                
                                                Food and beverage component of Consumer Price Index, all urban. 
                                                 Source: U.S. Dept. of Labor, Bureau of Labor Statistics,       
                                                 Monthly Labor Review, Table 22.                                
Other business services..........          5.1  Services component of Consumer Price Index, all urban. Source:  
                                                 U.S. Dept. of Labor, Bureau of Labor Statistics, Monthly Labor 
                                                 Review, Table 23.                                              
Fuel and other utilities.........          4.0  A. Implicit price deflator-consumption of fuel oil and coal     
                                                 (derived from fuel oil component of Consumer Price Index).     
                                                 Source: U.S. Dept. of Commerce, Bureau of Economic Analysis,   
                                                 Survey of Current Business (monthly), Table 7.11.              
                                                B. Implicit price deflator-consumer of electricity (derived from
                                                 electricity component of Consumer Price Index). Source: U.S.   
                                                 Dept. of Commerce, Bureau of Economic Analysis.                
                                                C. Implicit price deflator for natural gas (derived from utility
                                                 (piped) gas component of Consumer Price Index). Source: Same as
                                                 electricity above.                                             
                                                D. Water and sewage maintenance component of the Consumer Price 
                                                 Index. Source: U.S. Dept. of Labor, Bureau of Labor Statistics,
                                                 Monthly Labor Review, Table 23.                                
Supplies.........................          3.1  All Item Consumer Price Index, all urban. Source: U.S. Dept. of 
                                                 Labor, Bureau of Labor Statistics, Monthly Labor Review, Table 
                                                 23.                                                            
Drugs............................          2.2  Pharmaceutical preparations, ethical component of producer price
                                                 index. Source: U.S. Dept. of Labor, Bureau of Labor Statistics,
                                                 Producer Prices and Price Indexes (monthly), Table 6.          
Health services..................          1.6  Physician services component of Consumer Price Index for all    
                                                 urban consumers. Source: U.S. Dept. of Labor, Bureau of Labor  
                                                 Statistics, Monthly Labor Review, Table 23.                    
Miscellaneous....................          4.6  All Item Consumer Price Index, all urban. Source: U.S. Dept. of 
                                                 Labor, Bureau of Labor Statistics, Monthly Labor Review, Table 
                                                 23.                                                            
----------------------------------------------------------------------------------------------------------------
\1\ The basic weights for all major categories of skilled nursing home costs were obtained from the DHEW-       
  National Center for Health Statistics (NCHS) National Nursing Home Surveys (NNHS) for 1972 and 1976 for home  
  certified for participation in the Medicare program. See Nursing Home Costs 1972, United States: National     
  Nursing Home Survey, August 1973-April 1974, DHEW, NCHS: National Nursing Home Survey: 1977 Summary for the   
  United States, Vital and Health Statistics, Series 13, Number 43.                                             
A Laspeyres price index was constructed using 1977 weights and price variables indicated in this table. In      
  calendar year 1977 each ``price'' variable has an index of 100.0. The relative routine service cost weights   
  change each period in accordance with price changes for each price variable. Cost categories with relatively  
  higher ``price'' increases get relatively higher cost weights and vice versa.                                 
\2\ Forecasted by DRI/McGraw Hill, Health Care Costs, First Quarter, 1992, 1750 K St., NW, Washington D.C.      
  20006.                                                                                                        

    Authority: Secs. 1102, 1814(b), 1861(v)(1), 1866(a), 1871, and 
1888 of the Social Security Act (42 U.S.C. 1302, 1395f(b), 
1395x(v)(1), 1395cc(a), 1395hh, and 1395yy); sec. 13503(b) and (c) 
of Pub. L. 103-66 (42 U.S.C. 1395x(v)(1)(B) and 1395yy (note)) and 
42 CFR 413.1, 413.24, and 413.300 through 413.321).
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance)

    Dated: July 1, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.

    Dated: August 2, 1996.
Donna E. Shalala,
Secretary.
[FR Doc. 96-22376 Filed 8-30-96; 8:45 am]
BILLING CODE 4120-01-P