[Federal Register Volume 65, Number 88 (Friday, May 5, 2000)]
[Proposed Rules]
[Pages 26282-26436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-10874]
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Part II
Department of Health and Human Services
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Health Care Financing Administration
42 CFR Parts 412, 413, and 485
Medicare Program; Changes to the Hospital Inpatient Prospective Payment
Systems and Fiscal Year 2001 Rates; Proposed Rule
Federal Register / Vol. 65, No. 88 / Friday, May 5, 2000 / Proposed
Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 412, 413, and 485
[HCFA-1118-P]
RIN 0938-AK09
Medicare Program; Changes to the Hospital Inpatient Prospective
Payment Systems and Fiscal Year 2001 Rates
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Proposed rule.
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SUMMARY: We are proposing to revise the Medicare hospital inpatient
prospective payment system for operating costs to: implement applicable
statutory requirements, including a number of provisions of the
Medicare, Medicaid, and State Children's Health Insurance Program
Balanced Budget Refinement Act of 1999 (Public Law 106-113); and
implement changes arising from our continuing experience with the
system. In addition, in the Addendum to this proposed rule, we are
describing proposed changes to the amounts and factors used to
determine the rates for Medicare hospital inpatient services for
operating costs and capital-related costs. These changes would be
applicable to discharges occurring on or after October 1, 2000. We also
are setting forth proposed rate-of-increase limits as well as proposed
policy changes for hospitals and hospital units excluded from the
prospective payment systems.
We are proposing changes to the policies governing payments to
hospitals for the direct costs of graduate medical education and
payments to disproportionate share hospitals, sole community hospitals,
and critical access hospitals to implement changes made by Public Law
106-113.
Finally, we are proposing a new condition of participation on
organ, tissue, and eye procurement for critical access hospitals that
parallels the condition of participation that we previously published
for all other Medicare-participating hospitals.
DATES: Comments will be considered if received at the appropriate
address, as provided below, no later than 5 p.m. on July 5, 2000.
ADDRESSES: Mail written comments (an original and three copies) to the
following address only: Health Care Financing Administration,
Department of Health and Human Services, Attention: HCFA-1118-P, P.O.
Box 8010, Baltimore, MD 21244-1850.
If you prefer, you may deliver by courier your written comments (an
original and three copies) to one of the following addresses:
Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW,
Washington, DC 20201, or
Room C5-14-03, Central Building, 7500 Security Boulevard, Baltimore, MD
21244-1850.
Comments mailed to those addresses may be delayed and could be
considered late.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code HCFA-1118-P.
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 443-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).
For comments that relate to information collection requirements,
mail a copy of comments to the following addresses:
Health Care Financing Administration, Office of Information Services,
Security and Standards Group, Division of HCFA Enterprise Standards,
Room N2-14-26, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.
Attn: John Burke HCFA-1118-P; and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 3001, New Executive Office Building, Washington, DC 20503,
Attn: Allison Herron Eydt, HCFA Desk Officer.
FOR FURTHER INFORMATION CONTACT:
Steve Phillips, (410) 786-4531, Operating Prospective Payment, DRG,
Wage Index, Reclassifications, and Sole Community Hospital Issues.
Tzvi Hefter, (410) 786-4487, Capital Prospective Payment, Excluded
Hospitals, Graduate Medical Education and Critical Access Hospital
Issues.
SUPPLEMENTARY INFORMATION:
Availability of Copies and Electronic Access
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I. Background
A. Summary
Section 1886(d) of the Social Security Act (the Act) sets forth a
system of payment for the operating costs of acute care hospital
inpatient stays under Medicare Part A (Hospital Insurance) based on
prospectively set rates. Section 1886(g) of the Act requires the
Secretary to pay for the capital-related costs of hospital inpatient
stays under a prospective payment system. Under these prospective
payment systems, Medicare payment for hospital inpatient operating and
capital-related costs is made at predetermined, specific rates for each
hospital discharge. Discharges are classified according to a list of
diagnosis-related groups (DRGs).
Certain specialty hospitals are excluded from the prospective
payment systems. Under section 1886(d)(1)(B) of the Act, the following
hospitals and hospital units are excluded from the prospective payment
systems: psychiatric hospitals and units, rehabilitation hospitals and
units, children's hospitals, long-term care hospitals, and cancer
hospitals. For these hospitals and units, Medicare payment for
operating costs is based on reasonable costs subject to a hospital-
specific annual limit.
Under sections 1820 and 1834(g) of the Act, payments are made to
critical
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access hospitals (CAHs) (that is, rural nonprofit hospitals or
facilities that meet certain statutory requirements) for outpatient
services on a reasonable cost basis. Reasonable cost is determined
under the provisions of section 1861(v)(1)(A) of the Act and existing
regulations under parts 413 and 415.
Under section 1886(a)(4) of the Act, costs of approved educational
activities are excluded from the operating costs of inpatient hospital
services. Hospitals with approved graduate medical education (GME)
programs are paid for the direct costs of GME in accordance with
section 1886(h) of the Act; the amount of payment for direct GME costs
for a cost reporting period is based on the hospital's number of
residents in that period and the hospital's costs per resident in a
base year.
The regulations governing the hospital inpatient prospective
payment system are located in 42 CFR part 412. The regulations
governing excluded hospitals and hospital units are located in parts
412 and 413, and the GME regulations are located in part 413.
On July 30, 1999, we published a final rule in the Federal Register
(64 FR 41490) that implemented both statutory requirements and other
changes to the Medicare hospital inpatient prospective payment systems
for both operating costs and capital-related costs, as well as changes
addressing payment for excluded hospitals and payments for GME costs.
Generally, these changes were effective for discharges occurring on or
after October 1, 1999. Correction notices for the July 30, 1999 final
rule relating to the wage index and geographic adjustment factor were
issued in the Federal Register on January 12, 2000 (65 FR 1817) and
February 7, 2000 (65 FR 5933).
On November 29, 1999, the Medicare, Medicaid, and State Children's
Health Insurance Program (SCHIP) Balanced Budget Refinement Act of
1999, Public Law 106-113, was enacted. Public Law 106-113 made a number
of changes to the Act relating to prospective payments to hospitals for
inpatient services and payments to excluded hospitals. This proposed
rule would implement amendments enacted by Public Law 106-113 relating
to FY 2001 payments for GME costs and FY 2001 payments to
disproportionate share hospitals (DSHs), sole community hospitals
(SCHs), and CAHs. These changes are addressed in sections IV. and VI.
of this preamble.
Other provisions of Public Law 106-113 that relate to Medicare
payments to hospitals effective prior to October 1, 2000, will be
addressed in a separate interim final rule with comment period. The
provisions that will be included in the interim final rule are
summarized in section I.C. of this preamble.
Public Law 106-113 also amended section 1886(j) of the Act, which
was added by section 4421 of the Balanced Budget Act of 1997 (Public
Law 105-33). Section 1886(j) of the Act provides for a fully
implemented prospective payment system for inpatient rehabilitation
hospitals and rehabilitation units, effective for cost reporting
periods beginning on or after October 1, 2002, with provisions for
payments during a transitional period of October 1, 2000 to October 1,
2002, based on target amounts specified in section 1886(b) of the Act.
In section VI of this preamble, we describe the impact of this
provision on the proposed changes applicable to excluded hospitals and
units in this proposed rule. We are issuing a separate notice of
proposed rulemaking to implement the prospective payment system for
inpatient rehabilitation hospitals and units.
B. Major Contents of This Proposed Rule
In this proposed rule, we are setting forth proposed changes to the
Medicare hospital inpatient prospective payment system for operating
costs. We are not proposing any policy changes relating to payments for
capital-related costs under the hospital inpatient prospective payment
system in FY 2001. Our proposed changes relating to capital-related
costs include only changes to the amounts and factors for determining
the rates for capital-related costs for FY 2001. We also are proposing
changes relating to payments for GME costs and payments to excluded
hospitals and units, DSHs, SCHs, and CAHs. This proposed rule would be
effective for discharges occurring on or after October 1, 2000.
The following is a summary of the major changes that we are
proposing to make:
1. Proposed Changes to the DRG Reclassifications and Recalibrations of
Relative Weights
As required by section 1886(d)(4)(C) of the Act, we adjust the DRG
classifications and relative weights annually. Our proposed changes for
FY 2001 are set forth in section II. of this preamble.
2. Proposed Changes to the Hospital Wage Index
In section III. of this preamble, we discuss proposed revisions to
the wage index and the annual update of the wage data. Specific issues
addressed in this section include the following:
The FY 2001 wage index update, using FY 1997 wage data.
The transition to excluding from the wage index Part A
physician wage costs that are teaching-related, as well as resident and
Part A certified registered nurse anesthetist (CRNA) costs.
Revisions to the wage index based on hospital
redesignations and reclassifications.
3. Other Decisions and Proposed Changes to the Prospective Payment
System for Inpatient Operating and Graduate Medical Education Costs
In section IV. of this preamble, we discuss several provisions of
the regulations in 42 CFR Parts 412 and 413 and set forth certain
proposed changes concerning the following:
Postacute care transfers.
Sole community hospitals.
Rural referral centers.
Changes relating to the indirect medical education
adjustment.
Changes relating to the DSH adjustment and collection of
data on uncompensated costs for services furnished in hospitals under
the prospective payment system.
Medicare Geographic Classification Review Board (MGCRB)
classifications.
Payment for the direct costs of GME.
4. Last Year of Transition Period for the Prospective Payment System
for Capital-Related Costs
In section V. of this preamble, we discuss FY 2001 as the last year
of a 10-year transition period established to phase-in the prospective
payment system for capital-related costs for inpatient hospital
services.
5. Proposed Changes for Hospitals and Hospital Units Excluded from the
Prospective Payment Systems
In section VI. of this preamble, we discuss the following proposals
concerning excluded hospital and hospital units and CAHs:
Limits on and adjustments to the proposed target amounts
for FY 2001.
Development of prospective payment system for inpatient
rehabilitation hospitals and units.
Continuous improvement bonus payments.
Clarification that the 5-percent threshold used in
calculating an excluded hospital's cost per discharge is based only on
Medicare inpatients discharged from the hospital-within-a-hospital.
All-inclusive payment rate option for CAHs.
Condition of participation for CAHs relating to organ,
tissue, and eye procurement.
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6. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits
In the Addendum to this proposed rule, we set forth proposed
changes to the amounts and factors for determining the FY 2001
prospective payment rates for operating costs and capital-related
costs. We also address update factors for determining the rate-of-
increase limits for cost reporting periods beginning in FY 2001 for
hospitals and hospital units excluded from the prospective payment
system.
7. Impact Analysis
In Appendix A, we set forth an analysis of the impact that the
proposed changes described in this proposed rule would have on affected
entities.
8. Capital Acquisition Model
Appendix B contains the technical appendix on the proposed FY 2001
capital cost model.
9. Report to Congress on the Update Factor for Hospitals under the
Prospective Payment System and Hospitals and Units Excluded from the
Prospective Payment System
Section 1886(e)(3) of the Act requires the Secretary to report to
Congress on our initial estimate of a recommended update factor for FY
2001 for payments to hospitals included in the prospective payment
systems, and hospitals excluded from the prospective payment systems.
This report is included as Appendix C to this proposed rule.
10. Proposed Recommendation of Update Factor for Hospital Inpatient
Operating Costs
As required by sections 1886(e)(4) and (e)(5) of the Act, Appendix
D provides our recommendation of the appropriate percentage change for
FY 2001 for the following:
Large urban area and other area average standardized
amounts (and hospital-specific rates applicable to sole community and
Medicare-dependent, small rural hospitals) for hospital inpatient
services paid for under the prospective payment system for operating
costs.
Target rate-of-increase limits to the allowable operating
costs of hospital inpatient services furnished by hospitals and
hospital units excluded from the prospective payment system.
11. Discussion of Medicare Payment Advisory Commission Recommendations
Under section 1805(b) of the Act, the Medicare Payment Advisory
Commission (MedPAC) is required to submit a report to Congress, not
later than March 1 of each year, that reviews and makes recommendations
on Medicare payment policies. This annual report makes recommendations
concerning hospital inpatient payment policies. In section VII. of this
preamble, we discuss the MedPAC recommendations and any actions we are
proposing to take with regard to them (when an action is recommended).
For further information relating specifically to the MedPAC March 1
report or to obtain a copy of the report, contact MedPAC at (202) 653-
7220.
C. Provisions of Public Law 106-113 To Be Included in Interim Final
Rule With Comment Period
As we have indicated under section I.A. of this preamble, we are
planning to publish an interim final rule with comment period to
address provisions of Public Law 106-113 that are effective prior to
October 1, 2000. This interim final rule with comment period will be
issued prior to the publication of the hospital inpatient prospective
payment system final rule by August 1. A summary of the provisions of
Public Law 106-113 that will be addressed in the interim final rule
with comment period follows:
Section 111(b), which provides for an additional payment
to teaching hospitals equal to the additional amount the hospital would
have been paid for FY 2000 if the IME adjustment formula under section
1886(d)(5)(B) of the Act (which reflects the higher indirect operating
costs associated with GME) for FY 2000 had remained the same as for FY
1999. (Section 111(a) also changed the IME adjustment formula for
discharges occurring during FY 2001 and for discharges occurring on or
after October 1, 2001, which is addressed in section IV.D. of this
preamble.)
Section 121, which amended section 1886(b)(3)(H) of the
Act to provide for an appropriate wage adjustment to the cap on the
target amounts for psychiatric hospitals and units, rehabilitation
hospitals and units, and long-term care hospitals, effective for cost
reporting periods beginning on or after October 1, 1999, through
September 30, 2002. We will address the wage adjustment to the FY 2000
caps in the interim final rule. (The wage adjustment to the FY 2001
caps is discussed in section VI. of this preamble.)
Section 312, which amended section 1886(h)(5) of the Act
to provide that, effective July 1, 2000, in determining the cap on the
number of residents for GME and IME costs, the period of board
eligibility and the initial residency period for child neurology is the
period of board eligibility for pediatrics plus 2 years. This provision
applies on and after July 1, 2000, to residency programs that began
before, on, or after November 29, 1999.
Section 401(a), which amended section 1886(d)(8) of the
Act to direct the Secretary to treat certain hospitals located in urban
areas as being located in rural areas of their State if the hospital
meets statutory criteria and files an application with HCFA. This
provision is effective on January 1, 2000.
Section 401(b), which contains conforming changes to
incorporate the reclassifications under the amendments made by section
401(a) of Public Law 106-113 to outpatient hospital services (section
1833(t) of the Act) and the CAH statute (section 1820(c)(2)(B)(i) of
the Act). This provision is effective on January 1, 2000.
Section 403(a), which amended section 1820(c)(2)(B)(iii)
of the Act to delete the 96-hour length of stay restriction on
inpatient care in a CAH and to authorize a period of stay that does not
exceed, on an annual basis, 96 hours per patient. This provision is
effective on November 29, 1999.
Section 403(b), which amended section 1820(c)(2)(B)(i) of
the Act to allow for-profit hospitals to qualify for CAH status. This
provision is effective on November 29, 1999.
Section 403(c), which amended section 1820(c) of the Act
to allow hospitals that have closed within 10 years prior to November
29, 1999, or hospitals that downsized to a health clinic or health
center, to be designated as CAHs if they meet the established criteria
for designation.
Section 403(e), which amended sections 1833(a)(1)(D)(i)
and 1833(a)(2)(D)(i) the Act to eliminate the Medicare Part B
deductible and coinsurance for clinical diagnostic laboratory tests
furnished by a CAH on an outpatient basis. This provision is effective
with respect to services furnished on or after November 29, 1999.
Section 403(f), which amended section 1883 of the Act to
reinstate the right of CAHs that meet applicable requirements to enter
into ``swing-bed'' agreements.
Section 404, which amended section 1886(d)(5)(G) of the
Act to extend the Medicare-dependent, small rural hospital program for
5 years, from FY 2001 through FY 2005. Section 404 also amended section
1886(b)(3)(D) of the Act as a conforming change to make the 5-year
extension applicable to the
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target amounts for Medicare-dependent, small rural hospitals.
Section 407(a)(1), which amended section 1886(h)(4)(F) of
the Act to direct the Secretary, for purposes of determining a
hospital's FTE cap for direct GME payments, to count an individual to
the extent that the individual would have been counted as a primary
care resident for purposes of the FTE cap but for the fact that the
individual was on maternity or disability leave or a similar approved
leave of absence. Section 407(a)(2) made a corresponding amendment to
section 1886(d)(5)(B)(v) of the Act relating to the IME adjustment. The
provision relating to direct GME is effective with cost reporting
periods beginning on or after November 29, 1999. The provision relating
to the IME adjustment applies to discharges occurring in cost reporting
periods beginning on or after November 29, 1999.
Section 407(b)(1), which amended section 1886(h)(4)(F)(i)
of the Act to provide that a rural hospital's direct FTE count for
direct GME may not exceed 130 percent of the number of unweighted
residents that the rural hospital counted in its most recent cost
reporting period ending on or before December 31, 1996. Section
407(b)(2) made a similar change to section 1886(d)(5)(B)(v) of the Act
relating to the IME adjustment. The provision relating to direct GME
applies to cost reporting periods beginning on or after April 1, 2000.
The provision relating to the IME adjustment applies to discharges
occurring on or after April 1, 2000.
Section 407(c), which amended sections 1886(h)(4)(H) and
1886(d)(5)(B)(v) of the Act to allow a non-rural hospital that
establishes separately accredited approved medical residency training
programs (or rural training tracks) in a rural area or has an
accredited training program with an integrated rural track, to receive
an FTE cap adjustment for purposes of direct GME and IME. The provision
is effective with cost reporting periods beginning on or after April 1,
2000 for direct GME, and with discharges occurring on or after April 1,
2000 for IME.
Section 407(d) addresses the situation where residents
were training in a residency training program at a Veterans Affairs
hospital and then were transferred on or after January 1, 1997 and on
or before July 30, 1998, to a non-Veterans Affairs hospital because the
program in which the residents were training would lose its
accreditation by the Accreditation Council on Graduate Medical
Education (ACGME) if the residents continued to train at the facility.
In this scenario, the non-Veterans Affairs hospital may receive a
temporary adjustment to its 1996 FTE cap to include in its FTE count
those residents who were transferred from the Veterans Affairs
hospital. This provision applies as if it was included in the enactment
of Public Law 105-33, that is, for GME with cost reporting periods
beginning on or after October 1, 1997, and for IME, discharges
occurring on or after October 1, 1997. If a hospital is owed payments
as a result of this provision, payments must be made immediately.
Section 541, which amended section 1886 of the Act to
provide an additional payment to hospitals that receive payments under
section 1861(v) of the Act for approved nursing and allied health
education programs to reflect utilization of Medicare+Choice enrollees.
This provision is effective for portions of cost reporting periods in a
year beginning with calendar year 2000.
II. Proposed Changes to DRG Classifications and Relative Weights
A. Background
Under the prospective payment system, we pay for inpatient hospital
services on a rate per discharge basis that varies according to the DRG
to which a beneficiary's stay is assigned. The formula used to
calculate payment for a specific case takes an individual hospital's
payment rate per case and multiplies it by the weight of the DRG to
which the case is assigned. Each DRG weight represents the average
resources required to care for cases in that particular DRG relative to
the average resources used to treat cases in all DRGs.
Congress recognized that it would be necessary to recalculate the
DRG relative weights periodically to account for changes in resource
consumption. Accordingly, section 1886(d)(4)(C) of the Act requires
that the Secretary adjust the DRG classifications and relative weights
at least annually. These adjustments are made to reflect changes in
treatment patterns, technology, and any other factors that may change
the relative use of hospital resources. The proposed changes to the DRG
classification system, and the proposed recalibration of the DRG
weights for discharges occurring on or after October 1, 2000, are
discussed below.
B. DRG Reclassification
1. General
Cases are classified into DRGs for payment under the prospective
payment system based on the principal diagnosis, up to eight additional
diagnoses, and up to six procedures performed during the stay, as well
as age, sex, and discharge status of the patient. The diagnosis and
procedure information is reported by the hospital using codes from the
International Classification of Diseases, Ninth Revision, Clinical
Modification (ICD-9-CM). Medicare fiscal intermediaries enter the
information into their claims processing systems and subject it to a
series of automated screens called the Medicare Code Editor (MCE).
These screens are designed to identify cases that require further
review before classification into a DRG.
After screening through the MCE and any further development of the
claims, cases are classified into the appropriate DRG by the Medicare
GROUPER software program. The GROUPER program was developed as a means
of classifying each case into a DRG on the basis of the diagnosis and
procedure codes and demographic information (that is, sex, age, and
discharge status). It is used both to classify past cases in order to
measure relative hospital resource consumption to establish the DRG
weights and to classify current cases for purposes of determining
payment. The records for all Medicare hospital inpatient discharges are
maintained in the Medicare Provider Analysis and Review (MedPAR) file.
The data in this file are used to evaluate possible DRG classification
changes and to recalibrate the DRG weights.
In the July 30, 1999 final rule (64 FR 41500), we discussed a
process for considering non-MedPAR data in the recalibration process.
In order for the use of particular data to be feasible, we must have
sufficient time to evaluate and test the data. The time necessary to do
so depends upon the nature and quality of the data submitted.
Generally, however, a significant sample of the data should be
submitted by August 1, approximately 8 months prior to the publication
of the proposed rule, so that we can test the data and make a
preliminary assessment as to the feasibility of using the data.
Subsequently, a complete database should be submitted no later than
December 1 for consideration in conjunction with the next year's
proposed rule.
Currently, cases are assigned to one of 501 DRGs (including one DRG
for a diagnosis that is invalid as a discharge diagnosis and one DRG
for ungroupable diagnoses) in 25 major diagnostic categories (MDCs).
Most MDCs are based on a particular organ system of the body (for
example, MDC 6 (Diseases and Disorders of the Digestive System));
however, some MDCs are not constructed on this basis since they
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involve multiple organ systems (for example, MDC 22 (Burns)).
In general, cases are assigned to an MDC based on the principal
diagnosis, before assignment to a DRG. However, there are five DRGs to
which cases are directly assigned on the basis of procedure codes.
These are the DRGs for liver, bone marrow, and lung transplants (DRGs
480, 481, and 495, respectively) and the two DRGs for tracheostomies
(DRGs 482 and 483). Cases are assigned to these DRGs before
classification to an MDC.
Within most MDCs, cases are then divided into surgical DRGs (based
on a surgical hierarchy that orders individual procedures or groups of
procedures by resource intensity) and medical DRGs. Medical DRGs
generally are differentiated on the basis of diagnosis and age. Some
surgical and medical DRGs are further differentiated based on the
presence or absence of complications or comorbidities (CC).
Generally, the GROUPER does not consider other procedures; that is,
nonsurgical procedures or minor surgical procedures generally not
performed in an operating room are not listed as operating room (OR)
procedures in the GROUPER decision tables. However, there are a few
non-OR procedures that do affect DRG assignment for certain principal
diagnoses, such as extracorporeal shock wave lithotripsy for patients
with a principal diagnosis of urinary stones.
The changes we are proposing to make to the DRG classification
system for FY 2001 and other issues concerning DRGs are set forth
below. Unless otherwise noted, our DRG analysis is based on the full
(100 percent) FY 1999 MedPAR file (bills received through December 31,
1999 for discharges in FY 1999).
2. MDC 5 (Diseases and Disorders of the Circulatory System)
In the August 29, 1997 final rule with comment period (62 FR
45974), we noted that, because of the many recent changes in heart
surgery, we were considering conducting a comprehensive review of the
MDC 5 surgical DRGs. In the July 31, 1998 final rule with comment
period (63 FR 40956), we did adopt some changes to the MDC 5 surgical
DRGs. Since that time, we have received inquiries on a continuing basis
regarding these DRGs. We have continued to review Medicare claims data
and, based on our analysis, we are proposing the following DRG changes
in MDC 5:
a. Heart Transplant (DRG 103)
As previously stated, cases are generally assigned to an MDC based
on principal diagnosis and subsequently assigned to surgical or medical
DRGs included in that MDC. However, cases involving liver, bone marrow,
and lung transplants (DRGs 480, 481, and 495, respectively) and the two
DRGs for tracheostomies (DRGs 482 and 483) are directly assigned on the
basis of procedure codes. Cases assigned to these DRGs before
classification to an MDC are referred to as pre-MDC. However, cases
involving heart transplants are currently assigned first to MDC 5 and
then to DRG 103.
Currently, when a bone marrow transplant and a heart transplant are
performed during the same admission, the case is assigned to DRG 481
(Bone Marrow Transplant). Because bone marrow transplant cases are
first classified to pre-MDC, while heart transplants are first assigned
to MDC 5, the bone marrow transplant assumes precedence in the
assignment of the case to a DRG. However, payment for DRG 481 is
substantially less than DRG 103. For FY 2000, the relative weight for
DRG 103 is 19.5100, while the relative weight for DRG 481 is 8.7285.
We reviewed the FY 1999 MedPAR file containing bills through
December 31, 1999 and found no cases in which a bone marrow transplant
and a heart transplant were performed in the same admission. However,
to ensure appropriate DRG assignment of these cases, we are proposing
that the heart transplant DRG, which encompasses combined heart-lung
transplantation (ICD-9-CM procedure code 33.6) and heart
transplantation (ICD-9-CM procedure code 37.5) be assigned to pre-MDC.
In this way, cases involving a bone marrow transplant and a heart
transplant would be assigned to DRG 103 (DRG 103 would be reordered
higher in the pre-MDC surgical hierarchy, as discussed in section
II.B.5. of this preamble).
b. Heart Assist Devices
We continue to review data in MDC 5 (Diseases and Disorders of the
Circulatory System) to determine if cases are being assigned to the
most appropriate DRG based on clinical coherence and similar resource
consumption. At the December 1, 1994 ICD-9-CM Coordination and
Maintenance Committee meeting, we recommended creation of new codes to
capture single and bi-ventricular heart assist systems. These codes,
37.65 (Implant of an external, pulsatile heart assist system) and 37.66
(Implant of an implantable, pulsatile heart assist system), were
adopted for use for discharges occurring on or after October 1, 1995.
However, code 37.66 was deemed investigational and was not considered a
covered procedure. Effective May 5, 1997, we revised Medicare coverage
of heart assist devices to allow coverage of a ventricular assist
device (code 37.66) used for support of blood circulation
postcardiotomy if certain conditions were met.
Due to some residual misunderstanding regarding this coverage
policy, we would like to emphasize that this device was and will
continue to be listed as a noncovered procedure in the Medicare Code
Editor (MCE), the front-end software product in the GROUPER program
that detects and reports errors in the coding of claims data. The
reason that this device is listed in the MCE, in spite of the fact that
its implantation is covered, is because of the stringent conditions
that must be met by hospitals in order to receive payment.
In the August 29, 1997 final rule (62 FR 45973), we moved procedure
code 37.66 from DRGs 110 and 111 \1\ (Major Cardiovascular Procedures
with and without CCs, respectively) to DRG 108 (Other Cardiothoracic
Procedures). As stated in the July 31, 1998 final rule (63 FR 40956),
we moved procedure code 37.66 to DRGs 104 and 105 (Cardiac Valve and
Other Major Cardiothoracic Procedures with and without CCs,
respectively) for FY 1999.
---------------------------------------------------------------------------
\1\ A single title combined with two DRG numbers is used to
signify pairs. Generally, the first DRG is for cases with CC and the
second DRG is for cases without CC. If a third number is included,
it represents cases with patients who are age 0-17. Occasionally, a
pair of DRGs is split between age 17 and age 0-17.
---------------------------------------------------------------------------
In the July 30, 1999 final rule (64 FR 41498), we responded to a
comment suggesting that heart assist devices be assigned to DRG 103. In
further consideration of this issue, we have reviewed the 100 percent
FY 1999 MedPAR file containing bills through December 31, 1999, and
found that there were a total of 47 implantable heart assist system
procedures performed on Medicare beneficiaries. Of these cases, 13
(approximately 28 percent) were assigned to DRG 103 (Heart Transplant)
and four (approximately 9 percent) were assigned to DRG 483
(Tracheostomy Except for Face, Mouth and Neck Diagnoses), and,
therefore, were paid at significantly higher rates than the remaining
30 cases. All of the procedure code 37.66 cases have extremely high
charges, which is consistent with past
[[Page 26287]]
analysis, and all of these cases are subject to payment as cost
outliers.
Our data analysis indicates that the most cases in any one hospital
is 5, while 17 hospitals performed only one heart assist system implant
each. We reiterate that only heart transplant cases can be properly
assigned to the transplant DRG (August 29, 1997 final rule (62 FR
45974)). Since heart assist devices are used across DRGs, many not
involving a transplant, we are not proposing to assign procedure code
37.66 to DRG 103.
In addition to the review of 37.66, we also looked at procedure
codes 37.62 (Implant of other heart assist system), 37.63 (Replacement
and repair of heart assist system), and 37.65 (Implant of an external,
pulsatile heart assist system). These cases are currently assigned to
DRGs 110 and 111 (Major Cardiovascular Procedures). We believe that
these procedures are similar both clinically and in terms of resource
utilization to procedure code 37.66, which is already assigned to DRGs
104 and 105. Therefore, we propose to move codes 37.62, 37.63, and
37.65 from DRGs 110 and 111 to DRGs 104 and 105.
c. Platelet Inhibitors
Effective October 1, 1998, procedure code 99.20 (Injection or
infusion of platelet inhibitor) was created. The use of platelet
inhibitors have been shown to significantly decrease the rate of acute
vessel closure, as well as the rate of cardiac complications and death.
Platelet inhibitors are frequently administered to patients undergoing
percutaneous transluminal coronary angioplasty (PTCA). In addition,
patients admitted with unstable angina may also benefit from platelet
inhibitors. This procedure code is designated as a non-OR procedure
that does not affect DRG assignment (platelet inhibitors are
administered either through intravenous injection or infusion).
For the past 2 years, a manufacturer of platelet inhibitors has
submitted data to support its position that cases involving platelet
inhibitor therapy receiving angioplasty should be reclassified from DRG
112 (Percutaneous Cardiovascular Procedures) to DRG 116 (Other
Permanent Cardiac Pacemaker Implant or PTCA with Coronary Artery Stent
Implant). In the July 30, 1999 final rule (64 FR 41503), we noted that
we had received a new set of data from the platelet inhibitor
manufacturer containing 27,673 cases from 164 hospitals in which
Medicare patients underwent an angioplasty.
Included with the data were tables summarizing the results of the
commenter's analysis of the data, showing that angioplasty cases
receiving platelet inhibitor therapy are more expensive than those not
receiving platelet inhibitors. According to the commenter, the
approximate average standardized charges for the different classes of
patients are as follows:
No drug, no stent: $19,877.
No drug, with stent: $22,968.
Drug, no stent: $26,389.
Drug, stent: $30,139.
Using the 100 percent FY 1999 MedPAR file that contains discharges
through September 30, 1999, we performed analysis of the cases for
which procedure code 99.20 was reported. There were a total of 37,222
cases spread across 123 DRGs.
The majority of the platelet inhibitor cases, 28,022 (75 percent of
all platelet inhibitor cases), are already assigned to DRG 116. The
average standardized charges for these cases are approximately $26,683,
compared to approximately $25,251 for DRG 116 overall. In DRG 112,
there were 4,310 platelet inhibitor cases (12 percent of all platelet
inhibitor cases) assigned. The average standardized charge for these
cases is approximately $22,786, compared to approximately $20,224 for
DRG 112 overall. Although the platelet inhibitor therapy cases that are
classified to DRG 112 do have somewhat higher charges than the average
case assigned to this DRG (11 percent, or $2,563), we found several
procedures in DRG 112 with average standardized charges higher than the
platelet inhibitor cases. For example, there were 1,560 cases in which
a single vessel PTCA or coronary atherectomy with thrombolytic agent
(procedure code 36.02) was performed with an average standardized
charge of approximately $25,181, and there were 4,951 cases in which a
multiple vessel PTCA or coronary atherectomy was performed, with or
without a thrombolytic agent (procedure code 36.05) with an average
standardized charge of approximately $23,608.
We also noted that there are several procedures assigned to DRG 112
that have average standardized charges lower than the average charges
for all cases in the DRG. For example, average charges for cases with
procedure code 37.34 (Catheter ablation of lesion or tissues of heart)
were $18,429. The following chart illustrates the variation among the
average charges for DRG 112. This chart shows that the average charges
for cases with procedure code 99.20 are well within the normal
variation of other procedures.
------------------------------------------------------------------------
Average
DRG 112 Cases standardized
charges
------------------------------------------------------------------------
Catheter ablation of lesion or 6,972 $18,429
tissues of heart (code 37.34)....
All cases within DRG 112.......... 60,842 20,224
Injection or infusion of platelet 4,310 22,786
inhibitor (code 99.20)...........
Multiple vessel PTCA or coronary 4,951 23,608
atherectomy with or without
mention of thrombolytic agent
(code 36.05).....................
Single vessel PTCA or coronary 1,560 25,181
atherectomy with mention of
thrombolytic agent (code 36.02)..
------------------------------------------------------------------------
These examples indicate that there is always some variation in
charges within a DRG. This difference in variations of charges is
within the normal range of charge variations.
Clinical homogeneity within DRGs has always been a fundamental
principle considered when assigning codes to appropriate DRGs.
Currently, DRG 116 includes cases involving the insertion of a
pacemaker as well as the insertion of coronary artery stents with PTCA.
On the other hand, cases assigned to DRG 112 involve less invasive
operating room and, in some cases, nonoperating room procedures.
The basis for DRG assignment has generally been the diagnosis of
the patient or the procedures performed. To the extent the use of a
particular technology becomes prevalent in the treatment of a
particular type of case, the DRG system is designed to account for any
increases or decreases in costs through recalibration. Hospitals
frequently benefit from this process while efficiency-enhancing
technology is being introduced. We believe that the update factors
established in section 1886(b)(3)(B)(i) of the Act, combined with the
potential for continuing improvements in hospital productivity, and
annual recalibration of the DRG
[[Page 26288]]
weights, are adequate to finance appropriate care of Medicare patients.
We also received a comment from another manufacturer of platelet
inhibitors whose therapy is targeted on acute coronary syndrome
patients without coronary intervention. These cases are assigned to DRG
124 (Circulatory Disorders Except Acute Myocardial Infarction with
Cardiac Catheterization and Complex Diagnosis) or DRG 140 (Angina
Pectoris). The manufacturer's concern is that both types of cases,
those performed in conjunction with coronary intervention and those
without, be given an equal focus in this evaluation.
Based on our analysis, we found 410 platelet inhibitor cases (1
percent) assigned to DRG 124. This is a small percentage of cases in
comparison to the overall total of 134,759 cases assigned to this DRG.
The platelet inhibitor cases had an average standardized charge of
approximately $17,378 compared to approximately $14,730 for DRG 124
overall. As we have illustrated above, there is always some variation
in charges within a DRG and this difference is within normal variation.
There were 66 platelet inhibitor cases (0.2 percent) assigned to
DRG 140. The average standardized charge for these cases is higher than
the overall DRG charge, approximately $8,992 and $5,657, respectively.
However, it represents a small percentage of the total (76,913) cases
assigned to DRG 140.
In summary, currently 75 percent of cases where code 99.20 is
present are assigned to DRG 116. The next most common DRG where these
cases are assigned is DRG 112 (12 percent). Cases assigned to DRG 116
generally involve implantation of a pacemaker or artery stent, while
cases assigned to DRG 112 involve percutaneous cardiovascular
procedures. Our analysis found a $3,897 difference between cases
involving platelet inhibitor therapy that were assigned to DRG 116 and
cases assigned to DRG 112, indicating a clinical distinction between
the cases grouping to the two DRGs. Finally, among platelet inhibitor
therapy cases that are assigned to DRG 112, our analysis found that the
average charges are well within the normal variation around the overall
average charges within the DRG. Based on these findings, we do not
believe it would be appropriate to assign all cases where procedure
code 99.20 is present to DRG 116. Therefore, we are not proposing to
change to our current policy which specifies that assignment of cases
to this code does not affect the DRG assignment.
d. Extracorporeal Membrane Oxygenation
Extracorporeal Membrane Oxygenation (ECMO) is a cardiopulmonary
bypass technique that provides long-term cardiopulmonary support to
patients who have reversible cardiopulmonary insufficiency that has not
responded to conventional management. It involves passing a patient's
blood through an extracorporeal membrane oxygenator which adds oxygen
and removes carbon dioxide. The oxygenated blood then is passed through
a heat exchanger to warm it to body temperature prior to returning it
to the patient. The process and equipment are similar to those used in
open heart surgery, but are continued over prolonged periods of time.
ECMO attempts to provide the patient with artificial cardiopulmonary
function while his or her own cardiopulmonary functions are incapable
of sustaining life.
Since ECMO involves the use of a device that sustains
cardiopulmonary function while the underlying condition is being
treated, it is important to identify and treat underlying conditions
leading to cardiopulmonary failure if the patient is to return to
normal cardiopulmonary function.
ECMO is assigned to procedure code 39.65 (Extracorporeal membrane
oxygenation (ECMO)). This code is not recognized as an OR procedure
within the DRG system and, therefore, does not affect payment. To
evaluate the appropriateness of payment under the current DRG
assignment, we have reviewed a 10-percent sample of Medicare claims in
the FY 1999 MedPAR file and found only 4 cases in which ECMO was used.
The charges for these cases ranged from $16,006 to $198,014. Since
medical literature indicates that ECMO is predominately used on
newborns and pediatric cases, this low number of claims is not
surprising. Only in recent years have some hospitals started to use
ECMO on adults. It is reserved for cases facing almost certain
mortality.
Because ECMO is a procedure clinically similar to a heart assist
device, we are proposing that procedure code 39.65 be classified as an
OR procedure and be classified in DRGs 104 and 105 along with the heart
assist system procedures (as discussed in section II.B.2.b. of this
preamble). Those cases in which ECMO was provided, but for which the
principal diagnosis is not classified to MDC 5, would then be assigned
to DRG 468 (Extensive OR Procedure Unrelated to Principal Diagnosis).
This would be appropriate since it is possible that secondary
conditions or complications may arise during hospitalization that would
require the use of ECMO. The relatively high weight of DRG 468 would be
appropriate for these cases.
3. MDC 15 (Newborns and Other Neonates With Conditions Originating in
the Perinatal Period)
a. V05.8 (Vaccination for Disease, NEC)
DRG 390 (Neonate with Other Significant Problems) contains newborn
or neonate cases with other significant problems, not assigned to DRGs
385 through 389, DRG 391, or DRG 469. In order to be classified into
DRG 391 (Normal Newborn), the neonate must have a principal diagnosis
as listed under DRG 391 and either no secondary diagnosis or a
secondary diagnosis as listed under DRG 391. Neonates with a secondary
diagnosis of V05.8 (Vaccination for disease, NEC) are currently
classified to DRG 390. Although it would seem that healthy newborns who
receive vaccinations and have no other problems should be classified to
DRG 391, code V05.8 was not included as one of the secondary diagnoses
under DRG 391, and therefore the case would not be classified as a
normal newborn (DRG 391). Code V05.8 is assigned to DRG 390 as a
default, since it is not included under another complicated neonate DRG
or the normal newborn DRG.
Based on inquiries we have received, we reviewed the
appropriateness of including diagnosis code V05.8 on the list of
acceptable secondary diagnoses under DRG 390. It was pointed out that
by including V05.8 on the acceptable secondary diagnosis list for DRG
390, newborns who receive vaccinations are classified as having
significant health problems. The inquirers believed this incorrectly
labels an otherwise healthy newborn as having a significant medical
condition. Providing a vaccination to a newborn is performed to prevent
the infant from contracting a disease.
We agree with the inquirers that, absent any evidence of disease, a
newborn should not be considered as having a significant problem simply
because a preventative vaccination was provided. Therefore, we are
proposing that V05.8 be removed from the list of acceptable secondary
diagnoses under DRG 390 and assigned as a secondary diagnosis under DRG
39l. In doing so, these cases would no longer be classified to DRG 390.
[[Page 26289]]
b. Diagnosis Code 666.02 (Third-stage Postpartum Hemorrhage, Delivered
With Postpartum Complication)
Diagnosis code 666.02 is assigned to DRG 373 (Vaginal Delivery
without Complicating Diagnosis). This DRG was created for uncomplicated
vaginal deliveries. However, code 666.22 (Delayed and secondary
postpartum hemorrhage, delivered with postpartum complication) is
assigned to DRG 372 (Vaginal Delivery with Complicating Diagnoses).
This means that mothers who had a delayed and secondary postpartum
hemorrhage would be assigned to DRG 372, while mothers who had a third-
stage postpartum hemorrhage would not be considered as a complicated
delivery.
We believe a third-stage postpartum hemorrhage should be considered
a complicating diagnosis and, in order to more appropriately categorize
these cases, we are proposing that diagnosis code 666.02 be removed
from DRG 373 and assigned as a complicating diagnosis under DRG 372.
c. Diagnosis Code 759.89 (Specified Congenital Anomalies, NEC)
(Alport's Syndrome)
Alport's Syndrome (also referred to as hereditary nephritis) is an
inherited disorder involving damage to the kidney, blood in the urine,
and, in some cases, loss of hearing. It may also include loss of
vision. Patients who are not treated early enough or who do not respond
to treatment may progress to renal failure. A kidney transplant is one
treatment option for these cases. As with many of the congenital
anomalies, there is no unique ICD-9-CM code for this condition.
Alport's Syndrome, along with many other rare and diverse congenital
anomalies, is assigned to the rather nonspecific diagnosis code 759.89
(Specific congenital anomalies, NEC). Examples include William
Syndrome, Brachio-Oto-Renal Syndrome, and Costello's Syndrome. Each of
these is a unique hereditary disorder affecting a variety of body
systems.
Patients can be diagnosed and treated for congenital anomalies
throughout their lives; treatment is not restricted to the neonatal
period. In our GROUPER, however, each diagnosis code is assigned to
just one MDC. In this case, diagnosis code 759.89 is assigned to MDC 15
(Newborns and Other Neonates with Conditions Originating in the
Perinatal Period) even though the patient may be an adult.
We have received a request from a physician concerning renal
transplants for patients with Alport's Syndrome. The physician pointed
out that when a patient with Alport's Syndrome is admitted for a kidney
transplant, the case is assigned to DRG 390 (Neonate with Other
Significant Problems). In these instances, when the principal diagnosis
is code 759.89, the case is classified to MDC 15 even though the
patient may no longer be a newborn. The physician believed that these
cases should be assigned to DRG 302 (Kidney Transplant).
The inquirer suggested moving diagnosis code 759.89 to MDC 11
(Diseases and Disorders of the Kidney and Urinary Tract) so that when a
kidney transplant is performed, it will be assigned to DRG 302.
Although this seems quite appropriate for patients with Alport's
Syndrome found in diagnosis code 759.89, it does not work well for the
wide variety of patients also described by this code. Many others would
be inappropriately classified to MDC 11.
Alport's Syndrome cases with code 759.89 as a principal diagnosis
who receive a kidney transplant are assigned to DRG 468 (Extensive OR
Procedure Unrelated to Principal Diagnosis). This DRG has a FY 2000
relative weight of 3.6400. Also for FY 2000, DRG 302 (Kidney
Transplant) has a relative weight of 3.5669. Therefore, the payment
amounts are in fact comparable.
There are several options for resolving this issue:
(1) If the case is assigned a principal diagnosis code of renal
failure with Alport's Syndrome as a secondary diagnosis, the case could
be assigned to DRG 302. As this option would represent a change in the
sequencing of congenital anomaly codes and related complications, it
would have to be evaluated and subsequently approved by the Editorial
Advisory Board for Coding Clinic for ICD-9-CM. This Editorial Advisory
Board contains representatives from the physician, coding, and hospital
industry. Final decisions on coding policy issues are made by the
representatives from the American Hospital Association, the American
Health Information Management Association, the National Center for
Health Statistics, and HCFA.
Since a change in sequencing of congenital anomaly codes and their
manifestations and complications would require a change of coding
policy, this issue was brought to the Editorial Advisory Board, which
is currently evaluating it. A final decision on any proposed policy
change would not be finalized and published in time for either this
proposed rule or the final rule. Therefore, this option would not
assist in immediately addressing the issue at hand.
(2) A unique ICD-9-CM diagnosis code could be created for Alport's
Syndrome that could then be evaluated for possible assignment within
MDC 11. This issue has been referred to the National Center for Health
Statistics for consideration as a future coding modification.
One difficulty with this option is the large number of congenital
anomalies and the limited number of unused codes in this section of
ICD-9-CM. Each new code must be carefully evaluated for
appropriateness.
(3) A third option, which was already addressed, involves moving
diagnosis code 759.89 to MDC 11. The problem with this approach is that
many cases would then be misassigned to MDC 11 because the congenital
anomaly would not involve diseases of the kidney and urinary tract.
(4) A fourth option would be to leave the coding and DRG assignment
as they currently exist. Since few cases exist, the overall impact may
be minimal.
To evaluate the impact of leaving the DRG assignment as it
currently exists, we examined data from a 10-percent sample of Medicare
cases in the FY 1999 MedPAR file. There were 95 cases assigned to a
wide range of DRGs with code 759.89 as a secondary diagnosis. There was
only one case assigned to MDC 15 with a principal diagnosis of code
759.89.
We are recommending that diagnosis code 759.89 remain in MDC 15,
since it encompasses such a wide variety of conditions. In addition, we
are not proposing a change in the DRG assignment because the payment
impact would be minimal and the cases few. We will continue to pursue
the possibility of modifying the ICD-9-CM code as well as evaluating
the coding rules.
4. MDC 17 (Myeloproliferative Diseases and Disorders and Poorly
Differentiated Neoplasm)
Diagnosis code 273.8 (Disorders of plasma protein metabolism, NEC)
is assigned to DRG 403 (Lymphoma and Nonacute Leukemia with CC) and DRG
404 (Lymphoma and Nonacute Leukemia without CC). A disorder of plasma
protein metabolism does not mean one has a lymphoma with nonacute
leukemia. An individual can have a disorder of plasma protein
metabolism without having a lymphoma or leukemia.
We have received an inquiry on the appropriateness of including
diagnosis code 273.8 in DRGs 403 and 404. The inquirer pointed out that
disorders of
[[Page 26290]]
plasma protein metabolism are not lymphomas or leukemia. We agree that
diagnosis code 273.8 is not a lymphoma or leukemia and is more closely
related to DRG 413 (Other Myeloproliferative Disorders or Poorly
Differentiated Neoplasm Diagnoses with CC) and DRG 414 (Other
Myeloproliferative Disorders or Poorly Differentiated Neoplasm
Diagnoses without CC).
We examined charge data drawn from cases assigned to diagnosis code
273.8 in a 10-percent sample of Medicare cases in the FY 1999 MedPAR
file and found that the average charges for these cases were also more
closely related to DRGs 413 and 414 than to DRGs 403 and 404, as
demonstrated in the following chart.
----------------------------------------------------------------------------------------------------------------
DRGs 403/404 all cases in 10-percent sample DRGs 413/414 all cases in 10-percent sample
----------------------------------------------------------------------------------------------------------------
Average Average
DRG Count charge DRG Count charge
----------------------------------------------------------------------------------------------------------------
403................................ 2,107 $17,617 413................... 387 $12,278
404................................ 296 8,063 414................... 47 5,906
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Average Average
Code DRG Count charge Code DRG Count charge
----------------------------------------------------------------------------------------------------------------
273.8 403............. 17 $8,573 273.8 404............ 3 $6,644
----------------------------------------------------------------------------------------------------------------
Therefore, we are proposing to move diagnosis code 273.8 from DRGs
403 and 404 to DRGs 413 and 414.
Diagnosis code 273.8 is also included in the following surgical
DRGs that are performed on patients with lymphoma or leukemia:
DRG 400 (Lymphoma and Leukemia with Major OR Procedure).
DRG 401 (Lymphoma and Nonacute Leukemia with Other OR
Procedure with CC).
DRG 402 (Lymphoma and Nonacute Leukemia with Other OR
Procedure without CC).
The same clinical issue would apply to these surgical DRGS
performed on patients with lymphoma and leukemia. Code 273.8 should be
assigned to the surgical DRGs for myeloproliferative disorders since
the cases are clinically similar and, as stated before, code 273.8 is
not clinically similar to lymphomas and leukemias. Therefore, we are
also proposing that code 273.8 be removed from the surgical DRGs
related to lymphoma and leukemia (DRGS 400, 401, and 402) and assigned
to the following myeloproliferative surgical DRGS, based on the
procedure performed:
DRG 406 (Myeloproliferative Disorders or Poorly
Differentiated Neoplasms with Major OR Procedures with CC).
DRG 407 (Myeloproliferative Disorders Or Poorly
Differentiated Neoplasms with Major OR Procedures without CC).
DRG 408 (Myeloproliferative Disorders or Poorly
Differentiated Neoplasms with Other OR Procedures).
5. Surgical Hierarchies
Some inpatient stays entail multiple surgical procedures, each one
of which, occurring by itself, could result in assignment of the case
to a different DRG within the MDC to which the principal diagnosis is
assigned. Therefore, it is necessary to have a decision rule by which
these cases are assigned to a single DRG. The surgical hierarchy, an
ordering of surgical classes from most to least resource intensive,
performs that function. Its application ensures that cases involving
multiple surgical procedures are assigned to the DRG associated with
the most resource-intensive surgical class.
Because the relative resource intensity of surgical classes can
shift as a function of DRG reclassification and recalibration, we
reviewed the surgical hierarchy of each MDC, as we have for previous
reclassifications, to determine if the ordering of classes coincided
with the intensity of resource utilization, as measured by the same
billing data used to compute the DRG relative weights.
A surgical class can be composed of one or more DRGs. For example,
in MDC 11, the surgical class ``kidney transplant'' consists of a
single DRG (DRG 302) and the class ``kidney, ureter and major bladder
procedures'' consists of three DRGs (DRGs 303, 304, and 305).
Consequently, in many cases, the surgical hierarchy has an impact on
more than one DRG. The methodology for determining the most resource-
intensive surgical class involves weighting each DRG for frequency to
determine the average resources for each surgical class. For example,
assume surgical class A includes DRGs 1 and 2 and surgical class B
includes DRGs 3, 4, and 5. Assume also that the average charge of DRG 1
is higher than that of DRG 3, but the average charges of DRGs 4 and 5
are higher than the average charge of DRG 2. To determine whether
surgical class A should be higher or lower than surgical class B in the
surgical hierarchy, we would weight the average charge of each DRG by
frequency (that is, by the number of cases in the DRG) to determine
average resource consumption for the surgical class. The surgical
classes would then be ordered from the class with the highest average
resource utilization to that with the lowest, with the exception of
``other OR procedures'' as discussed below.
This methodology may occasionally result in a case involving
multiple procedures being assigned to the lower-weighted DRG (in the
highest, most resource-intensive surgical class) of the available
alternatives. However, given that the logic underlying the surgical
hierarchy provides that the GROUPER searches for the procedure in the
most resource-intensive surgical class, this result is unavoidable.
We note that, notwithstanding the foregoing discussion, there are a
few instances when a surgical class with a lower average relative
weight is ordered above a surgical class with a higher average relative
weight. For example, the ``other OR procedures'' surgical class is
uniformly ordered last in the surgical hierarchy of each MDC in which
it occurs, regardless of the fact that the relative weight for the DRG
or DRGs in that surgical class may be higher than that for other
surgical classes in the MDC. The ``other OR procedures'' class is a
group of procedures that are least likely to be related to the
diagnoses in the MDC but are occasionally performed on patients with
these diagnoses. Therefore, these procedures should only be considered
if no other procedure more closely related to the diagnoses in the MDC
has been performed.
A second example occurs when the difference between the average
weights for two surgical classes is very small.
[[Page 26291]]
We have found that small differences generally do not warrant
reordering of the hierarchy since, by virtue of the hierarchy change,
the relative weights are likely to shift such that the higher-ordered
surgical class has a lower average weight than the class ordered below
it.
Based on the preliminary recalibration of the DRGs, we are
proposing to modify the surgical hierarchy as set forth below. As we
stated in the September 1, 1989 final rule (54 FR 36457), we are unable
to test the effects of proposed revisions to the surgical hierarchy and
to reflect these changes in the proposed relative weights due to the
unavailability of the revised GROUPER software at the time the proposed
rule is prepared. Rather, we simulate most major classification changes
to approximate the placement of cases under the proposed
reclassification and then determine the average charge for each DRG.
These average charges then serve as our best estimate of relative
resource use for each surgical class. We test the proposed surgical
hierarchy changes after the revised GROUPER is received and reflect the
final changes in the DRG relative weights in the final rule. Further,
as discussed in section II.C of this preamble, we anticipate that the
final recalibrated weights will be somewhat different from those
proposed, since they will be based on more complete data. Consequently,
further revision of the hierarchy, using the above principles, may be
necessary in the final rule.
At this time, we are proposing to revise the surgical hierarchy for
the pre-MDC DRGs, MDC 8 (Diseases and Disorders of the Musculoskeletal
System and Connective Tissue), and MDC 10 (Endocrine, Nutritional, and
Metabolic Diseases and Disorders) as follows:
In the pre-MDC DRGs, as we stated previously, we are
proposing to move DRG 103 (Heart Transplant) from MDC 5 to pre-MDC. We
are proposing to reorder DRG 103 (Heart Transplant) above DRG 483
(Tracheostomy Except for Face, Mouth, and Neck Diagnoses).
In the pre-MDC DRGs, we are proposing to reorder DRG 481
(Bone Marrow Transplant) above DRG 495 (Lung Transplant).
In MDC 8, we are proposing to reorder DRG 230 (Local
Excision and Removal of Internal Fixation Devices of Hip and Femur)
above DRG 226 (Soft Tissue Procedures with CC) and DRG 227 (Soft Tissue
Procedures without CC).
In MDC 10, we are proposing to reorder DRG 288 (OR
Procedures for Obesity) above DRG 285 (Amputation of Lower Limb for
Endocrine, Nutritional, and Metabolic Disorders).
6. Refinement of Complications and Comorbidities (CC) List
In the September 1, 1987 final notice (52 FR 33143) concerning
changes to the DRG classification system, we modified the GROUPER logic
so that certain diagnoses included on the standard list of CCs would
not be considered a valid CC in combination with a particular principal
diagnosis. Thus, we created the CC Exclusions List. We made these
changes for the following reasons: (1) To preclude coding of CCs for
closely related conditions; (2) to preclude duplicative coding or
inconsistent coding from being treated as CCs; and (3) to ensure that
cases are appropriately classified between the complicated and
uncomplicated DRGs in a pair. We developed this standard list of
diagnoses using physician panels to include those diagnoses that, when
present as a secondary condition, would be considered a substantial
complication or comorbidity. In previous years, we have made changes to
the standard list of CCs, either by adding new CCs or deleting CCs
already on the list. At this time, we do not propose to delete any of
the diagnosis codes on the CC list.
In the May 19, 1987 proposed notice (52 FR 18877) concerning
changes to the DRG classification system, we explained that the
excluded secondary diagnoses were established using the following five
principles:
Chronic and acute manifestations of the same condition
should not be considered CCs for one another (as subsequently corrected
in the September 1, 1987 final notice (52 FR 33154)).
Specific and nonspecific (that is, not otherwise specified
(NOS)) diagnosis codes for a condition should not be considered CCs for
one another.
Conditions that may not coexist, such as partial/total,
unilateral/bilateral, obstructed/unobstructed, and benign/malignant,
should not be considered CCs for one another.
The same condition in anatomically proximal sites should
not be considered CCs for one another.
Closely related conditions should not be considered CCs
for one another.
The creation of the CC Exclusions List was a major project
involving hundreds of codes. The FY 1988 revisions were intended only
as a first step toward refinement of the CC list in that the criteria
used for eliminating certain diagnoses from consideration as CCs were
intended to identify only the most obvious diagnoses that should not be
considered complications or comorbidities of another diagnosis. For
that reason, and in light of comments and questions on the CC list, we
have continued to review the remaining CCs to identify additional
exclusions and to remove diagnoses from the master list that have been
shown not to meet the definition of a CC. (See the September 30, 1988
final rule (53 FR 38485) for the revision made for the discharges
occurring in FY 1989; the September 1, 1989 final rule (54 FR 36552)
for the FY 1990 revision; the September 4, 1990 final rule (55 FR
36126) for the FY 1991 revision; the August 30, 1991 final rule (56 FR
43209) for the FY 1992 revision; the September 1, 1992 final rule (57
FR 39753) for the FY 1993 revision; the September 1, 1993 final rule
(58 FR 46278) for the FY 1994 revisions; the September 1, 1994 final
rule (59 FR 45334) for the FY 1995 revisions; the September 1, 1995
final rule (60 FR 45782) for the FY 1996 revisions; the August 30, 1996
final rule (61 FR 46171) for the FY 1997 revisions; the August 29, 1997
final rule (62 FR 45966) for the FY 1998 revisions; and the July 31,
1998 final rule (63 FR 40954) for the FY 1999 revisions. In the July
30, 1999 final rule (64 FR 41490) we did not modify the CC Exclusions
List for FY 2000 because we did not make any changes to the ICD-9-CM
codes for FY 2000.
We are proposing a limited revision of the CC Exclusions List to
take into account the changes that will be made in the ICD-9-CM
diagnosis coding system effective October 1, 2000. (See section II.B.8.
below, for a discussion of ICD-9-CM changes.) These proposed changes
are being made in accordance with the principles established when we
created the CC Exclusions List in 1987.
Tables 6F and 6G in section V. of the Addendum to this proposed
rule contain the proposed revisions to the CC Exclusions List that
would be effective for discharges occurring on or after October 1,
2000. Each table shows the principal diagnoses with proposed changes to
the excluded CCs. Each of these principal diagnoses is shown with an
asterisk and the additions or deletions to the CC Exclusions List are
provided in an indented column immediately following the affected
principal diagnosis.
CCs that are added to the list are in Table 6F--Additions to the CC
Exclusions List. Beginning with discharges on or after October 1, 2000,
the indented diagnoses will not be recognized by the GROUPER as valid
CCs for the asterisked principal diagnosis.
CCs that are deleted from the list are in Table 6G--Deletions from
the CC
[[Page 26292]]
Exclusions List. Beginning with discharges on or after October 1, 2000,
the indented diagnoses will be recognized by the GROUPER as valid CCs
for the asterisked principal diagnosis.
Copies of the original CC Exclusions List applicable to FY 1988 can
be obtained from the National Technical Information Service (NTIS) of
the Department of Commerce. It is available in hard copy for $92.00
plus $6.00 shipping and handling and on microfiche for $20.50, plus
$4.00 for shipping and handling. A request for the FY 1988 CC
Exclusions List (which should include the identification accession
number (PB) 88-133970) should be made to the following address:
National Technical Information Service, United States Department of
Commerce, 5285 Port Royal Road, Springfield, Virginia 22161; or by
calling (703) 487-4650.
Users should be aware of the fact that all revisions to the CC
Exclusions List (FYs 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996,
1997, 1998, and 1999) and those in Tables 6F and 6G of this document
must be incorporated into the list purchased from NTIS in order to
obtain the CC Exclusions List applicable for discharges occurring on or
after October 1, 2000. (Note: There was no CC Exclusions List in FY
2000 because we did not make changes to the ICD-9-CM codes for FY
2000.)
Alternatively, the complete documentation of the GROUPER logic,
including the current CC Exclusions List, is available from 3M/Health
Information Systems (HIS), which, under contract with HCFA, is
responsible for updating and maintaining the GROUPER program. The
current DRG Definitions Manual, Version 17.0, is available for $225.00,
which includes $15.00 for shipping and handling. Version 18.0 of this
manual, which includes the final FY 2001 DRG changes, will be available
in October 2000 for $225.00. These manuals may be obtained by writing
3M/HIS at the following address: 100 Barnes Road, Wallingford,
Connecticut 06492; or by calling (203) 949-0303. Please specify the
revision or revisions requested.
7. Review of Procedure Codes in DRGs 468, 476, and 477
Each year, we review cases assigned to DRG 468 (Extensive OR
Procedure Unrelated to Principal Diagnosis), DRG 476 (Prostatic OR
Procedure Unrelated to Principal Diagnosis), and DRG 477 (Nonextensive
OR Procedure Unrelated to Principal Diagnosis) to determine whether it
would be appropriate to change the procedures assigned among these
DRGs.
DRGs 468, 476, and 477 are reserved for those cases in which none
of the OR procedures performed is related to the principal diagnosis.
These DRGs are intended to capture atypical cases, that is, those cases
not occurring with sufficient frequency to represent a distinct,
recognizable clinical group. DRG 476 is assigned to those discharges in
which one or more of the following prostatic procedures are performed
and are unrelated to the principal diagnosis:
60.0 Incision of prostate
60.12 Open biopsy of prostate
60.15 Biopsy of periprostatic tissue
60.18 Other diagnostic procedures on prostate and periprostatic tissue
60.21 Transurethral prostatectomy
60.29 Other transurethral prostatectomy
60.61 Local excision of lesion of prostate
60.69 Prostatectomy NEC
60.81 Incision of periprostatic tissue
60.82 Excision of periprostatic tissue
60.93 Repair of prostate
60.94 Control of (postoperative) hemorrhage of prostate
60.95 Transurethral balloon dilation of the prostatic urethra
60.99 Other operations on prostate
All remaining OR procedures are assigned to DRGs 468 and 477, with
DRG 477 assigned to those discharges in which the only procedures
performed are nonextensive procedures that are unrelated to the
principal diagnosis. The original list of the ICD-9-CM procedure codes
for the procedures we consider nonextensive procedures, if performed
with an unrelated principal diagnosis, was published in Table 6C in
section IV. of the Addendum to the September 30, 1988 final rule (53 FR
38591). As part of the final rules published on September 4, 1990 (55
FR 36135), August 30, 1991 (56 FR 43212), September 1, 1992 (57 FR
23625), September 1, 1993 (58 FR 46279), September 1, 1994 (59 FR
45336), September 1, 1995 (60 FR 45783), August 30, 1996 (61 FR 46173),
and August 29, 1997 (62 FR 45981), we moved several other procedures
from DRG 468 to 477, and some procedures from DRG 477 to 468. No
procedures were moved in FY 1999, as noted in the July 31, 1998 final
rule (63 FR 40962), or in FY 2000, as noted in the July 30, 1999 final
rule (64 FR 41496).
a. Moving Procedure Codes From DRGs 468 or 477 to MDCs
We annually conduct a review of procedures producing assignment to
DRG 468 or DRG 477 on the basis of volume, by procedure, to see if it
would be appropriate to move procedure codes out of these DRGs into one
of the surgical DRGs for the MDC into which the principal diagnosis
falls. The data are arrayed two ways for comparison purposes. We look
at a frequency count of each major operative procedure code. We also
compare procedures across MDCs by volume of procedure codes within each
MDC. That is, using procedure code 57.49 (Other transurethral excision
or destruction of lesion or tissue of bladder) as an example, we
determined that this particular code accounted for the highest number
of major operative procedures (162 cases, or 9.8 percent of all cases)
reported in the sample of DRG 477. In addition, we determined that
procedure code 57.49 appeared in MDC 4 (Diseases and Disorders of the
Respiratory System) 28 times as well as in 9 other MDCs.
Using a 10-percent sample of the FY 1999 MedPAR file, we determined
that the quantity of cases in DRG 477 totaled 1,650. There were 106
instances where the major operative procedure appeared only once (6.4
percent of the time), resulting in assignment to DRG 477.
Using the same 10-percent sample of the FY 1999 MedPAR file, we
reviewed DRG 468. There were a total of 3,858 cases, with one major
operative code causing the DRG assignment 311 times (or 8 percent) and
230 instances where the major operative procedure appeared only once
(or 6 percent of the time).
Our medical consultants then identified those procedures occurring
in conjunction with certain principal diagnoses with sufficient
frequency to justify adding them to one of the surgical DRGs for the
MDC in which the diagnosis falls. Based on this year's review, we did
not identify any necessary changes in procedures under either DRG 468
or 477 and, therefore, are not proposing to move any procedures from
either DRG 468 or DRG 477 to one of the surgical DRGs.
b. Reassignment of Procedures Among DRGs 468, 476, and 477
We also annually review the list of ICD-9-CM procedures that, when
in combination with their principal diagnosis code, result in
assignment to DRGs 468, 476, and 477, to ascertain if any of those
procedures should be moved from one of these DRGs to another of these
DRGs based on average charges and length of stay. We look at the data
for trends such as shifts in treatment practice or reporting practice
that would make the resulting DRG assignment illogical. If our medical
consultants were to find these shifts, we
[[Page 26293]]
would propose moving cases to keep the DRGs clinically similar or to
provide payment for the cases in a similar manner. Generally, we move
only those procedures for which we have an adequate number of
discharges to analyze the data. Based on our review this year, we are
not proposing to move any procedures from DRG 468 to DRGs 476 or 477,
from DRG 476 to DRGs 468 or 477, or from DRG 477 to DRGs 468 or 476.
c. Adding Diagnosis Codes to MDCs
It has been brought to our attention that an ICD-9-CM diagnosis
code should be added to DRG 482 (Tracheostomy for Face, Mouth and Neck
Diagnoses) to preserve clinical coherence and homogeneity of the
system. In the case of a patient who has a facial infection (diagnosis
code 682.0 (Other cellulitis and abscess, Face)), the face may become
extremely swollen and the patient's ability to breathe might be
impaired. It might be deemed medically necessary to perform a temporary
tracheostomy (procedure code 31.1) on the patient until the swelling
subsides enough for the patient to once again breathe on his or her
own.
The combination of diagnosis code 682.0 and procedure code 31.1
results in assignment to DRG 483 (Tracheostomy Except for Face, Mouth
and Neck Diagnoses). The absence of diagnosis code 682.0 in DRG 483
forces the GROUPER algorithm to assign the case based solely on the
procedure code, without taking this diagnosis into account. Clearly
this was not the intent, as diagnosis code 682.0 should be included
with other face, mouth and neck diagnosis. We believe that cases such
as these would appropriately be assigned to DRG 482. Therefore, we are
proposing to add diagnosis code 682.0 to the list of other face, mouth
and neck diagnoses already in the principal diagnosis list in DRG 482.
8. Changes to the ICD-9-CM Coding System
As described in section II.B.1 of this preamble, the ICD-9-CM is a
coding system that is used for the reporting of diagnoses and
procedures performed on a patient. In September 1985, the ICD-9-CM
Coordination and Maintenance Committee was formed. This is a Federal
interdepartmental committee, co-chaired by the National Center for
Health Statistics (NCHS) and HCFA, charged with maintaining and
updating the ICD-9-CM system. The Committee is jointly responsible for
approving coding changes, and developing errata, addenda, and other
modifications to the ICD-9-CM to reflect newly developed procedures and
technologies and newly identified diseases. The Committee is also
responsible for promoting the use of Federal and non-Federal
educational programs and other communication techniques with a view
toward standardizing coding applications and upgrading the quality of
the classification system.
The NCHS has lead responsibility for the ICD-9-CM diagnosis codes
included in the Tabular List and Alphabetic Index for Diseases, while
HCFA has lead responsibility for the ICD-9-CM procedure codes included
in the Tabular List and Alphabetic Index for Procedures.
The Committee encourages participation in the above process by
health-related organizations. In this regard, the Committee holds
public meetings for discussion of educational issues and proposed
coding changes. These meetings provide an opportunity for
representatives of recognized organizations in the coding field, such
as the American Health Information Management Association (AHIMA)
(formerly American Medical Record Association (AMRA)), the American
Hospital Association (AHA), and various physician specialty groups as
well as physicians, medical record administrators, health information
management professionals, and other members of the public to contribute
ideas on coding matters. After considering the opinions expressed at
the public meetings and in writing, the Committee formulates
recommendations, which then must be approved by the agencies.
The Committee presented proposals for coding changes for FY 2000 at
public meetings held on June 4, 1998 and November 2, 1998. Even though
the Committee conducted public meetings and considered approval of
coding changes for FY 2000 implementation, we did not implement any
changes to ICD-9-CM codes for FY 2000 because of our major efforts to
ensure that all of the Medicare computer systems were compliant with
the year 2000. Therefore, the code proposals presented at the public
meetings held on June 4, 1998 and November 2, 1998, that (if approved)
ordinarily would have been included as new codes for October 1, 1999,
were held for consideration for inclusion in this proposed annual
update for FY 2001.
The Committee also presented proposals for coding changes for
implementation in FY 2001 at public meetings held on May 13, 1999 and
November 12, 1999, and finalized the coding changes after consideration
of comments received at the meetings and in writing by January 7, 2000.
Copies of the Coordination and Maintenance Committee minutes of the
1999 meetings can be obtained from the HCFA Home Page by typing http://www.hcfa.gov/medicare/icd9cm.htm. Paper copies of these minutes are no
longer available and the mailing list has been discontinued. We
encourage commenters to address suggestions on coding issues involving
diagnosis codes to: Donna Pickett, Co-Chairperson; ICD-9-CM
Coordination and Maintenance Committee; NCHS; Room 1100; 6525 Belcrest
Road; Hyattsville, Maryland 20782. Comments may be sent by E-mail to:
[email protected].
Questions and comments concerning the procedure codes should be
addressed to: Patricia E. Brooks, Co-Chairperson; ICD-9-CM Coordination
and Maintenance Committee; HCFA, Center for Health Plans and Providers,
Purchasing Policy Group, Division of Acute Care; C4-07-07; 7500
Security Boulevard; Baltimore, Maryland 21244-1850. Comments may be
sent by E-mail to: [email protected].
The ICD-9-CM code changes that have been approved will become
effective October 1, 2000. The new ICD-9-CM codes are listed, along
with their proposed DRG classifications, in Tables 6A and 6B (New
Diagnosis Codes and New Procedure Codes, respectively) in section VI.
of the Addendum to this proposed rule. As we stated above, the code
numbers and their titles were presented for public comment at the ICD-
9-CM Coordination and Maintenance Committee meetings. Both oral and
written comments were considered before the codes were approved.
Therefore, we are soliciting comments only on the proposed DRG
classification of these new codes.
Further, the Committee has approved the expansion of certain ICD-9-
CM codes to require an additional digit for valid code assignment.
Diagnosis codes that have been replaced by expanded codes or other
codes, or have been deleted are in Table 6C (Invalid Diagnosis Codes).
These invalid diagnosis codes will not be recognized by the GROUPER
beginning with discharges occurring on or after October 1, 2000. For
codes that have been replaced by new or expanded codes, the
corresponding new or expanded diagnosis codes are included in Table 6A
(New Diagnosis Codes). There were no procedure codes that were replaced
by expanded codes or other codes, or were deleted. Revisions to
diagnosis code titles are in Table 6D (Revised Diagnosis Code Titles),
which also include the proposed DRG assignments
[[Page 26294]]
for these revised codes. Revisions to procedure code titles are in
Table 6E (Revised Procedure Codes Titles).
9. Other Issues
a. Immunotherapy
Effective October 1, 1994, procedure code 99.28 (Injection or
infusion of biologic response modifier (BRM) as an antineoplastic
agent) was created and designated as a non-OR procedure that does not
affect DRG assignment. This cancer treatment involving biological
response modifiers is also known as BRM therapy or immunotherapy.
In response to a comment on the May 7, 1999 proposed rule, for the
FY 2000 final rule we performed analysis of cases for which procedure
code 99.28 was reported using the 100 percent FY 1998 MedPAR file. The
commenter requested that we create a new DRG for BRM therapy or assign
cases in which BRM therapy is performed to an existing DRG with a high
relative weight. The commenter suggested that DRG 403 (Lymphoma and
Nonacute Leukemia with CC) would be an appropriate DRG.
Based on the commenter's request, we examined cases only for
hospitals that use the particular drug manufactured by the commenter.
We concluded that due to the variation of charges across the cases and
the limited number of cases distributed across 19 different DRGs, it
would be inappropriate to classify these cases to a single DRG. For
example, it would be inappropriate to classify these cases into DRG 403
because only a few cases were coded with a principal diagnosis assigned
to MDC 17 (Myeloproliferative Diseases and Disorders, and Poorly
Differentiated Neoplasm), the MDC that includes DRG 403. We stated in
the July 30, 1999 final rule (64 FR 41497) that we would perform a full
analysis of immunotherapy cases using the FY 1999 MedPAR data to
determine if changes are needed.
Using 100 percent of the data in the FY 1999 MedPAR file, we
performed an analysis of all cases for which procedure code 99.28 was
reported. We identified 1,179 cases in 136 DRGs in 22 MDCs. No more
than 141 cases were assigned to any one particular DRG.
Of the 1,179 cases, 141 cases (approximately 12 percent) were
assigned to DRG 403 in MDC 17. We found approximately one-half of these
cases had other procedures performed in addition to receiving
immunotherapy, such as chemotherapy, bone marrow biopsy, insertion of
totally implantable vascular access device, thoracentesis, or
percutaneous abdominal drainage, which may account for the increased
charges. There were 123 immunotherapy cases assigned to DRG 82
(Respiratory Neoplasms) in MDC 4 (Diseases and Disorders of the
Respiratory System). We noted that, in some cases, in addition to
immunotherapy, other procedures were performed, such as insertion of an
intercostal catheter for drainage, thoracentesis, or chemotherapy.
There were 84 cases assigned to DRG 416 (Septicemia, Age >17) in
MDC 18 (Infectious and Parasitic Diseases (Systemic or Unspecified
Sites)). The principal diagnosis for this DRG is septicemia and, in
addition to receiving treatment for septicemia, immunotherapy was also
given. There were 79 cases assigned to DRG 410 (Chemotherapy without
Acute Leukemia as Secondary Diagnosis) in MDC 17.
The cost of immunotherapy is averaged into the weight for these
DRGS and, based on our analysis, we do not believe a reclassification
of these cases is warranted. Due to the limited number of cases that
were distributed throughout 136 DRGs in 22 MDCs and the variation of
charges, we concluded that it would be inappropriate to classify these
cases into a single DRG.
Although there were 141 cases assigned to DRG 403, it would be
inappropriate to place all immunotherapy cases, regardless of
diagnosis, into a DRG that is designated for lymphoma and nonacute
leukemia. We establish DRGs based on clinical coherence and resource
utilization. Each DRG encompasses a variety of cases, reflecting a
range of services and a range of resources. Generally, then, each DRG
reflects some higher cost cases and some lower cost cases. To the
extent a new technology is extremely costly relative to the cases
reflected in the DRG relative weight, the hospital might qualify for
outlier payments, that is, additional payments over and above the
standard prospective payment rate. We have not received any comments
from hospitals regarding payment for immunotherapy cases.
b. Pancreas Transplant
Effective July 1, 1999, Medicare covers whole organ pancreas
transplantation if the transplantation is performed simultaneously with
or after a kidney transplant (procedure codes 55.69, Other kidney
transplantation, and V42.0, Organ or tissue replaced by transplant,
Kidney) (Transmittal No. 115, April 1999). We note that when we
published the notification of this coverage in the July 30, 1999 final
rule (64 FR 41497), we inadvertently made an error in announcing the
covered codes. We cited the incorrect codes for pancreas
transplantation as procedure code 52.80 (Pancreatic transplant, not
otherwise specified) and 52.83 (Heterotransplant of pancreas). The
correct procedure codes for pancreas transplantation are 52.80
(Pancreatic transplant, not otherwise specified) and 52.82
(Homotransplant of pancreas). We will revise the Coverage Issues Manual
to reflect this correction.
Pancreas transplantation is generally limited to those patients
with severe secondary complications of diabetes, including kidney
failure. However, pancreas transplantation is sometimes performed on
patients with labile diabetes and hypoglycemic unawareness. Pancreas
transplantation for diabetic patients who have not experienced end-
stage renal failure secondary to diabetes is excluded from coverage.
Medicare also excludes coverage of transplantation of partial
pancreatic tissue or islet cells.
In the July 30, 1999 final rule (64 FR 41497), we indicated that we
planned to review discharge data to determine whether a new DRG should
be created, or existing DRGs modified, to further classify pancreas
transplantation in combination with kidney transplantation.
Under the current DRG classification, if a kidney transplant and a
pancreas transplant are performed simultaneously on a patient with
chronic renal failure secondary to diabetes with renal manifestations
(diagnosis codes 250.40 through 250.43), the case is assigned to DRG
302 (Kidney Transplant) in MDC 11 (Diseases and Disorders of the Kidney
and Urinary Tract). If a pancreas transplant is performed following a
kidney transplant (that is, during a different hospital admission) on a
patient with chronic renal failure secondary to diabetes with renal
manifestations, the case is assigned to DRG 468 (Extensive OR Procedure
Unrelated to Principal Diagnosis). This is because pancreas transplant
is not assigned to MDC 11, the MDC to which a principal diagnosis of
chronic renal failure secondary to diabetes is assigned.
Using 100 percent of the data in the FY 1999 MedPAR file (which
contains hospital bills through December 31, 1999), we performed an
analysis of the cases for which procedure codes 52.80 and 52.83 were
reported. We identified a total of 79 cases in 8 DRGs, in 3 MDCs, and
in 1 pre-MDC. Of the 79 cases identified, 49 cases were assigned to DRG
302, 14 cases were assigned to DRG 468, and 8 cases were assigned to
DRG 191 (Pancreas, Liver and Shunt
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Procedures with CC). The additional 8 cases were distributed over 5
other assorted DRGs, and due to their disparity, were not considered in
our evaluation.
We examined our data to determine whether we should propose a new
kidney and pancreas transplant DRG at this time. We identified 49 such
dual transplant cases in the FY 1999 MedPAR file. We do not believe
this is a sufficient sample size to warrant the creation of a new DRG.
Furthermore, we would note that nearly half of these cases occurred at
a hospital in Maryland, which is not paid under the prospective payment
system. The rest of the cases are spread across multiple hospitals,
with no single hospital having more than 5 cases in the FY 1999 MedPAR.
C. Recalibration of DRG Weights.
We are proposing to use the same basic methodology for the FY 2001
recalibration as we did for FY 2000 (July 30, 1999 final rule (64 FR
41498)). That is, we would recalibrate the weights based on charge data
for Medicare discharges. However, we propose to use the most current
charge information available, the FY 1999 MedPAR file. (For the FY 2000
recalibration, we used the FY 1998 MedPAR file.) The MedPAR file is
based on fully coded diagnostic and procedure data for all Medicare
inpatient hospital bills.
The proposed recalibrated DRG relative weights are constructed from
FY 1999 MedPAR data (discharges occurring between October 1, 1998 and
September 30, 1999), based on bills received by HCFA through December
31, 1999, from all hospitals subject to the prospective payment system
and short-term acute care hospitals in waiver States. The FY 1999
MedPAR file includes data for approximately 11,059,625 Medicare
discharges.
The methodology used to calculate the proposed DRG relative weights
from the FY 1999 MedPAR file is as follows:
To the extent possible, all the claims were regrouped
using the proposed DRG classification revisions discussed in section
II.B of this preamble. As noted in section II.B.5, due to the
unavailability of the revised GROUPER software, we simulated most major
classification changes to approximate the placement of cases under the
proposed reclassification. However, there are some changes that cannot
be modeled.
Charges were standardized to remove the effects of
differences in area wage levels, indirect medical education and
disproportionate share payments, and, for hospitals in Alaska and
Hawaii, the applicable cost-of-living adjustment.
The average standardized charge per DRG was calculated by
summing the standardized charges for all cases in the DRG and dividing
that amount by the number of cases classified in the DRG.
We then eliminated statistical outliers, using the same
criteria used in computing the current weights. That is, all cases that
are outside of 3.0 standard deviations from the mean of the log
distribution of both the charges per case and the charges per day for
each DRG are eliminated.
The average charge for each DRG was then recomputed
(excluding the statistical outliers) and divided by the national
average standardized charge per case to determine the relative weight.
A transfer case is counted as a fraction of a case based on the ratio
of its transfer payment under the per diem payment methodology to the
full DRG payment for nontransfer cases. That is, transfer cases paid
under the transfer methodology equal to half of what the case would
receive as a nontransfer would be counted as 0.5 of a total case.
We established the relative weight for heart and heart-
lung, liver, and lung transplants (DRGs 103, 480, and 495) in a manner
consistent with the methodology for all other DRGs except that the
transplant cases that were used to establish the weights were limited
to those Medicare-approved heart, heart-lung, liver, and lung
transplant centers that have cases in the FY 1999 MedPAR file.
(Medicare coverage for heart, heart-lung, liver, and lung transplants
is limited to those facilities that have received approval from HCFA as
transplant centers.)
Acquisition costs for kidney, heart, heart-lung, liver,
and lung transplants continue to be paid on a reasonable cost basis.
Unlike other excluded costs, the acquisition costs are concentrated in
specific DRGs (DRG 302 (Kidney Transplant); DRG 103 (Heart Transplant);
DRG 480 (Liver Transplant); and DRG 495 (Lung Transplant)). Because
these costs are paid separately from the prospective payment rate, it
is necessary to make an adjustment to prevent the relative weights for
these DRGs from including the acquisition costs. Therefore, we
subtracted the acquisition charges from the total charges on each
transplant bill that showed acquisition charges before computing the
average charge for the DRG and before eliminating statistical outliers.
When we recalibrated the DRG weights for previous years, we set a
threshold of 10 cases as the minimum number of cases required to
compute a reasonable weight. We propose to use that same case threshold
in recalibrating the DRG weights for FY 2001. Using the FY 1999 MedPAR
data set, there are 40 DRGs that contain fewer than 10 cases. We
computed the weights for these 40 low-volume DRGs by adjusting the FY
2000 weights of these DRGs by the percentage change in the average
weight of the cases in the other DRGs.
The weights developed according to the methodology described above,
using the proposed DRG classification changes, result in an average
case weight that is different from the average case weight before
recalibration. Therefore, the new weights are normalized by an
adjustment factor (1.45431) so that the average case weight after
recalibration is equal to the average case weight before recalibration.
This adjustment is intended to ensure that recalibration by itself
neither increases nor decreases total payments under the prospective
payment system.
Section 1886(d)(4)(C)(iii) of the Act requires that, beginning with
FY 1991, reclassification and recalibration changes be made in a manner
that assures that the aggregate payments are neither greater than nor
less than the aggregate payments that would have been made without the
changes. Although normalization is intended to achieve this effect,
equating the average case weight after recalibration to the average
case weight before recalibration does not necessarily achieve budget
neutrality with respect to aggregate payments to hospitals because
payment to hospitals is affected by factors other than average case
weight. Therefore, as we have done in past years and as discussed in
section II.A.4.b. of the Addendum to this proposed rule, we are
proposing to make a budget neutrality adjustment to assure that the
requirement of section 1886(d)(4)(C)(iii) of the Act is met.
III. Proposed Changes to the Hospital Wage Index
A. Background
Section 1886(d)(3)(E) of the Act requires that, as part of the
methodology for determining prospective payments to hospitals, the
Secretary must adjust the standardized amounts ``for area differences
in hospital wage levels by a factor (established by the Secretary)
reflecting the relative hospital wage level in the geographic area of
the hospital compared to the national average hospital wage level.'' In
accordance with the broad discretion conferred under the Act, we
currently define hospital labor market areas based on the definitions
of Metropolitan
[[Page 26296]]
Statistical Areas (MSAs), Primary MSAs (PMSAs), and New England County
Metropolitan Areas (NECMAs) issued by the Office of Management and
Budget (OMB). The OMB also designates Consolidated MSAs (CMSAs). A CMSA
is a metropolitan area with a population of one million or more,
comprising two or more PMSAs (identified by their separate economic and
social character). For purposes of the hospital wage index, we use the
PMSAs rather than CMSAs since they allow a more precise breakdown of
labor costs. If a metropolitan area is not designated as part of a
PMSA, we use the applicable MSA. Rural areas are areas outside a
designated MSA, PMSA, or NECMA. For purposes of the wage index, we
combine all of the rural counties in a State to calculate a rural wage
index for that State.
We note that effective April 1, 1990, the term Metropolitan Area
(MA) replaced the term MSA (which had been used since June 30, 1983) to
describe the set of metropolitan areas consisting of MSAs, PMSAs, and
CMSAs. The terminology was changed by OMB in the March 30, 1990 Federal
Register to distinguish between the individual metropolitan areas known
as MSAs and the set of all metropolitan areas (MSAs, PMSAs, and CMSAs)
(55 FR 12154). For purposes of the prospective payment system, we will
continue to refer to these areas as MSAs.
Beginning October 1, 1993, section 1886(d)(3)(E) of the Act
requires that we update the wage index annually. Furthermore, this
section provides that the Secretary base the update on a survey of
wages and wage-related costs of short-term, acute care hospitals. The
survey should measure, to the extent feasible, the earnings and paid
hours of employment by occupational category, and must exclude the
wages and wage-related costs incurred in furnishing skilled nursing
services. As discussed below in section III.F of this preamble, we also
take into account the geographic reclassification of hospitals in
accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act when
calculating the wage index.
B. FY 2001 Wage Index Update
The proposed FY 2001 wage index values in section VI of the
Addendum to this proposed rule (effective for hospital discharges
occurring on or after October 1, 2000 and before October 1, 2001) are
based on the data collected from the Medicare cost reports submitted by
hospitals for cost reporting periods beginning in FY 1997 (the FY 2000
wage index was based on FY 1996 wage data).
The proposed FY 2001 wage index includes the following categories
of data associated with costs paid under the hospital inpatient
prospective payment system (as well as outpatient costs), which were
also included in the FY 2000 wage index:
Salaries and hours from short-term, acute care hospitals.
Home office costs and hours.
Certain contract labor costs and hours.
Wage-related costs.
Consistent with the wage index methodology for FY 2000, the
proposed wage index for FY 2001 also continues to exclude the direct
and overhead salaries and hours for services not paid through the
inpatient prospective payment system such as skilled nursing facility
services, home health services, or other subprovider components that
are not subject to the prospective payment system.
We calculate a separate Puerto Rico-specific wage index and apply
it to the Puerto Rico standardized amount. (See 62 FR 45984 and 46041.)
This wage index is based solely on Puerto Rico's data. Finally, section
4410 of Public Law 105-33 provides that, for discharges on or after
October 1, 1997, the area wage index applicable to any hospital that is
not located in a rural area may not be less than the area wage index
applicable to hospitals located in rural areas in that State.
C. FY 2001 Wage Index Proposal
Because it is used to adjust payments to hospitals under the
prospective payment system, the hospital wage index should, to the
extent possible, reflect the wage costs associated with the areas of
the hospital included under the hospital inpatient prospective payment
system. In response to concerns within the hospital community related
to the removal from the wage index calculation costs related to
graduate medical education (GME) (teaching physicians and residents),
and certified registered nurse anesthetists (CRNAs), which are paid by
Medicare separately from the prospective payment system, the American
Hospital Association (AHA) convened a workgroup to develop a consensus
recommendation on this issue. The workgroup recommended that costs
related to GME and CRNAs be phased out of the wage index calculation
over a 5-year period. Based upon our analysis of hospitals' FY 1996
wage data, and consistent with the AHA workgroup's recommendation, we
specified in the July 30, 1999 final rule (64 FR 41505) that we would
phase-out these costs from the calculation of the wage index over a 5-
year period, beginning in FY 2000. In keeping with the decision to
phase-out costs related to GME and CRNAs, the proposed FY 2001 wage
index is based on a blend of 60 percent of an average hourly wage
including these costs, and 40 percent of an average hourly wage
excluding these costs.
1. Teaching Physician Costs and Hours Survey
As discussed in the July 30, 1999 final rule, because the FY 1996
cost reporting data did not separate teaching physician costs from
other physician Part A costs, we instructed our fiscal intermediaries
to survey teaching hospitals to collect data on teaching physician
costs and hours payable under the per resident amounts (Sec. 413.86)
and reported on Worksheet A, Line 23 of the hospitals' cost report.
The FY 1997 cost reports also do not separately report teaching
physician costs. Therefore, we once again conducted a special survey to
collect data on these costs. (For the FY 1998 cost reports, we have
revised the Worksheet S-3, Part II so that hospitals can separately
report teaching physician Part A costs. Therefore, after this year, it
will no longer be necessary for us to conduct this special survey.)
The survey data collected as of mid-January 2000 were included in
the preliminary public use data file made available on the Internet in
February 2000 at HCFA's home page (http://www.hcfa.gov). At that time,
we had received teaching physician data for 459 out of 770 teaching
hospitals reporting physician Part A costs on their Worksheet S-3, Part
II. Also, in some cases, intermediaries reported that teaching
hospitals did not incur teaching physician costs. In early January
2000, we instructed intermediaries to review the survey data for
consistency with the Supplemental Worksheet A-8-2 of the hospitals'
cost reports. Supplemental Worksheet A-8-2 is used to apply the
reasonable compensation equivalency limits to the costs of provider-
based physicians, itemizing these costs by the corresponding line
number on Worksheet A.
When we notified the hospitals, through our fiscal intermediaries,
that they could review the survey data on the Internet, we also
notified hospitals that requests for changes to the teaching survey
data must be submitted by March 6, 2000. We instructed fiscal
intermediaries to review the requests for changes received from
hospitals and submit necessary data revisions to HCFA by April 3, 2000.
[[Page 26297]]
We removed from the wage data the physician Part A teaching costs
and hours reported on the survey form for every hospital that completed
the survey. These data had been verified by the fiscal intermediary
before submission to HCFA. We have identified 42 teaching hospitals in
our database that reported physician Part A costs on Line 4 of their
Worksheet S-3 and teaching-related costs on Line 23 of Worksheet A,
Column 1, but for which we do not have teaching physician costs from
the survey because the hospitals failed to complete the survey. As we
did in the case of such hospitals in calculating the FY 2000 wage
index, for purposes of calculating the FY 2001 wage index, we propose
to subtract the costs reported on Line 23 of the Worksheet A, Column 1
(GME Other Program Costs) from Line 1 of the Worksheet S-3. These costs
(from Line 23, Column 1 of Worksheet A) are included in Line 1 of the
Worksheet
S-3, which is the sum of Column 1, Worksheet A. They also represent
costs for which the hospital is paid through the per resident amount
under the direct GME payment. To determine the hours to be removed, the
costs reported on Line 23 of the Worksheet A, Column 1 would be divided
by the national average hourly wage for teaching physicians based upon
the survey of $65.62.
For the FY 2000 wage index, the AHA workgroup recommended that, if
reliable teaching physician data were not available for removing
teaching costs from hospitals' total physician Part A costs, HCFA
should remove 80 percent of the costs and hours reported by hospitals
attributable to physicians' Part A services. In calculating the FY 2000
wage index, if we did not receive survey data for a teaching hospital,
we removed 80 percent of the hospital's reported total physician Part A
costs and hours from the calculation. For the FY 2001 wage index, we
are proposing a different approach. In some instances, fiscal
intermediaries have verified that teaching hospitals do not have
teaching physician costs; for these hospitals, it is not necessary to
adjust the hospitals' physician Part A costs. We are actively
conferring with the fiscal intermediaries to distinguish teaching
hospitals that do not have teaching physician costs from teaching
hospitals that have not identified the portion of their physician Part
A costs associated with teaching physicians (that is, hospitals that
did not complete the teaching survey and did not report teaching-
related costs on Worksheet A, Line 23). We propose to remove 100
percent of the physician Part A costs and hours (reported on Worksheet
S-3, Lines 4, 10, 12, and 18) in the FY 2001 wage index calculation for
those hospitals where the fiscal intermediary verifies that the
hospital has otherwise unidentified teaching physician costs included
in physician Part A costs and hours.
It should be noted that Line 23 of Worksheet A, Column 1, flows
directly into hospitals' total salaries on Worksheet S-3, Part II. Line
23 contains GME costs not directly attributable to residents' salaries
or fringe benefits. Therefore, these costs tend to be costs associated
with teaching physicians. To the extent a hospital fails to separately
identify the proportion of its Line 23 Worksheet A costs associated
with teaching physicians, we believe it is reasonable to remove all of
these costs under the presumption that they are all associated with
teaching physicians.
Thus, for the proposed wage index, we are either using the data
submitted on the teaching physician survey or, in the absence of such
data, removing the amount reported on Line 23 of Worksheet A, Column 1
or removing 100 percent of physician Part A costs reported on Worksheet
S-3.
2. Nurse Practitioner and Clinical Nurse Specialist Costs
The current wage index includes salaries and wage-related costs for
nurse practitioners (NPs) and clinical nurse specialists (CNSs) who,
similar to physician assistants and CRNAs (unless at hospitals under
the rural pass-through exception for CRNAs), are paid under the
physician fee schedule. Over the past year, we have received several
inquiries from hospitals and fiscal intermediaries regarding NP costs
and how they should be handled for purposes of the hospital wage index.
Because Medicare generally pays for NP and CNS costs under Part B
outside the hospital prospective payment system, removing NP and CNS
Part B costs from the wage index calculation would be consistent with
our general policy to exclude, to the extent possible, costs that are
not paid through the hospital prospective payment system. Because NP
and CNS costs are not separately reported on the Worksheet S-3 for FYs
1997, 1998, and 1999, the FY 2000 Worksheet S-3 and cost reporting
instructions will be revised to allow for separate reporting of NP and
CNS Part A and Part B costs. We will exclude the Part B costs beginning
with the FY 2004 wage index. These services are pervasive in both rural
and urban settings. As such, we believe there will be no significant
overall impact resulting from the removal of Part B costs for NPs and
CNSs.
3. Severance and Bonus Pay Costs
On October 6, 1999, we issued a memorandum to hospitals and
intermediaries regarding our policy on treatment of severance and bonus
pay costs in developing the wage index, effective beginning with the FY
2001 wage index. (The hospital cost report instructions also will be
amended to reflect our policy on these costs.) We stated that severance
pay costs may be included on Worksheet S-3 as salaries on Part II, Line
1, only if the associated hours are included. If the hospital has no
accounting of the hours, or if the costs are not based on hours, the
severance pay costs may not be included in the wage index. On the other
hand, bonus pay costs may be included in the cost report on Line 1 of
Worksheet S-3 with no corresponding hours. Due to the inquiries we
continue to receive from hospitals regarding the inclusion of severance
pay costs on cost reports, we are clarifying our policy in this
proposed rule.
Hospitals vary in their accounting of severance pay costs. Some
hospitals base the amounts to be paid on hours, for example, 80 hours
worth of pay. Others do not; for example, a 15-year employee may be
offered a $25,000 buyout package. Some hospitals record associated
hours; others do not. The Wage Index Workgroup has suggested that we
not include any severance pay costs in the wage index calculation, that
these costs are for terminated employees, and, therefore, they should
be considered an administrative rather than a salary expense.
Severance pay costs can be substantial amounts, particularly in
periods of downsizing. We believe that, if severance pay costs are
included with no associated hours, the wage index, which is a relative
measure of wage costs across labor market areas, would be distorted.
Severance pay costs are included in the proposed FY 2001 wage index
as a salary cost to the extent that associated hours are also reported.
However, we are soliciting public comments on this issue.
4. Health Insurance and Health-Related Costs
In the September 1, 1994 final rule (59 FR 45356), we stated that
health insurance, purchased or self-insurance, is a core wage-related
cost. Over the past year, we have received several inquiries from
hospitals and hospital associations requesting that we define
``purchased health insurance costs.'' In response, in
[[Page 26298]]
this proposed rule, we are clarifying that, for wage index purposes, we
define ``purchased health insurance costs'' as the premiums and
administrative costs a hospital pays on behalf of its employees for
health insurance coverage. ``Self-insurance'' includes the hospital's
costs (not charges) for covered services delivered to its employees,
less any amounts paid by the employees, and less the personnel costs
for hospital staff who delivered the services (these costs are already
included in the wage index). For purchased health insurance and self-
health insurance, the included costs must be for services covered in a
health insurance plan.
Also, in the September 1, 1994 final rule (59 FR 45357), we
addressed a comment about the inclusion of health-related costs in the
calculation of the wage index. Such health-related costs include
employee physical examinations, flu shots, and clinic visits, and other
services that are not covered by employees' health insurance plans but
are provided at no cost or at discounted rates to employees of the
hospital. We are clarifying that the costs for these services may be
included as an ``other'' wage-related cost if (among other criteria),
when all such health-related costs are combined, the total of such
costs is greater than 1 percent of the hospital's total salaries (less
excluded area salaries). As discussed in the September 1, 1994 final
rule (59 FR 45357), a cost may be allowable as an ``other wage-related
cost'' if it meets certain criteria. Under one criterion, the wage-
related cost must be greater than 1 percent of total salaries (less
excluded area salaries). For purposes of applying this 1-percent test
with respect to the health-related costs at issue here, we look at the
combined total of the health-related costs (not charges) for services
delivered to its employees, less any amounts employees paid, and less
the personnel costs for hospital staff who delivered the services (as
these costs are already included in the wage index).
5. Elimination of Wage Costs Associated With Rural Health Clinics and
Federally Qualified Health Centers
The current hospital wage index includes the salaries and wage-
related costs of hospital-based rural health clinics (RHCs) and
federally qualified health centers (FQHCs). However, Medicare pays for
these costs outside the hospital inpatient prospective payment system.
Effective January 1, 1998, under section 1833(f) of the Act, as amended
by section 4205 of Public Law 105-33, Medicare pays both hospital-based
and freestanding RHCs and FQHCs on a cost-per-visit basis. Medicare
cost reporting forms for RHCs and FQHCs were revised to reflect this
legislative change, beginning with cost reporting periods ending on or
after September 30, 1998 (the FY 1998 cost report). Other cost-
reimbursed outpatient departments, such as ambulatory surgical centers,
community mental health centers, and comprehensive outpatient
rehabilitation facilities, are presently excluded from the wage index.
Therefore, consistent with our wage index refinements that exclude, to
the extent possible, costs associated with services not paid under the
hospital inpatient prospective payment system, we believe it would be
appropriate to exclude all salary costs associated with RHCs and FQHCs
from the wage index calculation if we had feasible, reliable data for
such exclusion.
Because RHC and FQHC costs are not separately reported on the
Worksheet S-3 for FYs 1997, 1998, and 1999, we cannot exclude these
costs from the FY 2001, FY 2002, or FY 2003 wage indexes. Therefore, we
will revise the FY 2000 Worksheet S-3 to begin providing for the
separate reporting of RHC and FQHC salaries, wage-related costs, and
hours. We will evaluate the wage data for RHCs and FQHCs in developing
the FY 2004 wage index.
D. Verification of Wage Data From the Medicare Cost Report
The data for the proposed FY 2001 wage index were obtained from
Worksheet S-3, Parts II and III of the FY 1997 Medicare cost reports.
The data file used to construct the proposed wage index includes FY
1997 data submitted to HCFA as of mid-February 2000. As in past years,
we performed an intensive review of the wage data, mostly through the
use of edits designed to identify aberrant data.
We asked our fiscal intermediaries to revise or verify data
elements that resulted in specific edit failures. Some unresolved data
elements are included in the calculation of the proposed FY 2001 wage
index pending their resolution before calculation of the final FY 2001
wage index. We have instructed the intermediaries to complete their
verification of questionable data elements and to transmit any changes
to the wage data (through HCRIS) no later than April 3, 2000. We expect
that all unresolved data elements will be resolved by that date. The
revised data will be reflected in the final rule.
Also, as part of our editing process, we removed data for 19
hospitals that failed edits. For two of these hospitals, we were unable
to obtain sufficient documentation to verify or revise the data because
the hospitals are no longer participating in the Medicare program or
are in bankruptcy status. Four hospitals had negative average hourly
wages after allocating overhead to their excluded areas and, therefore,
were removed from the calculation. The data from the remaining 13
hospitals also failed the edits and were removed. The data for these
hospitals will be included in the final wage index if we receive
corrected data that pass our edits. As a result, the proposed FY 2001
wage index is calculated based on FY 1997 wage data for 4,926
hospitals.
E. Computation of the Proposed FY 2001 Wage Index
The method used to compute the proposed FY 2001 wage index is as
follows:
Step 1--As noted above, we are proposing to base the FY 2001 wage
index on wage data reported on the FY 1997 Medicare cost reports. We
gathered data from each of the non-Federal, short-term, acute care
hospitals for which data were reported on the Worksheet S-3, Parts II
and III of the Medicare cost report for the hospital's cost reporting
period beginning on or after October 1, 1996 and before October 1,
1997. In addition, we included data from a few hospitals that had cost
reporting periods beginning in September 1996 and reported a cost
reporting period exceeding 52 weeks. These data were included because
no other data from these hospitals would be available for the cost
reporting period described above, and because particular labor market
areas might be affected due to the omission of these hospitals.
However, we generally describe these wage data as FY 1997 data. We note
that, if a hospital had more than one cost reporting period beginning
during FY 1997 (for example, a hospital had two short cost reporting
periods beginning on or after October 1, 1996 and before October 1,
1997), we included wage data from only one of the cost reporting
periods, the longest, in the wage index calculation. If there was more
than one cost reporting period and the periods were equal in length, we
included the wage data from the latest period in the wage index
calculation.
Step 2--Salaries--The method used to compute a hospital's average
hourly wage is a blend of 60 percent of the hospital's average hourly
wage including all GME and CRNA costs, and 40 percent of the hospital's
average hourly wage after eliminating all GME and CRNA costs.
In calculating a hospital's average salaries plus wage-related
costs,
[[Page 26299]]
including all GME and CRNA costs, we subtracted from Line 1 (total
salaries) the Part B salaries reported on Lines 3 and 5, home office
salaries reported on Line 7, and excluded salaries reported on Lines 8
and 8.01 (that is, direct salaries attributable to skilled nursing
facility services, home health services, and other subprovider
components not subject to the prospective payment system). We also
subtracted from Line 1 the salaries for which no hours were reported on
Lines 2, 4, and 6. To determine total salaries plus wage-related costs,
we added to the net hospital salaries the costs of contract labor for
direct patient care, certain top management, and physician Part A
services (Lines 9 and 10), home office salaries and wage-related costs
reported by the hospital on Lines 11 and 12, and nonexcluded area wage-
related costs (Lines 13, 14, 16, 18, and 20).
We note that contract labor and home office salaries for which no
corresponding hours are reported were not included. In addition, wage-
related costs for specific categories of employees (Lines 16, 18, and
20) are excluded if no corresponding salaries are reported for those
employees (Lines 2, 4, and 6, respectively).
We then calculated a hospital's salaries plus wage-related costs by
subtracting from total salaries the salaries plus wage-related costs
for teaching physicians, Part A CRNAs (Lines 2 and 16), and residents
(Lines 6 and 20).
Step 3--Hours--With the exception of wage-related costs, for which
there are no associated hours, we computed total hours using the same
methods as described for salaries in Step 2.
Step 4--For each hospital reporting both total overhead salaries
and total overhead hours greater than zero, we then allocated overhead
costs. First, we determined the ratio of excluded area hours (sum of
Lines 8 and 8.01 of Worksheet S-3, Part II) to revised total hours
(Line 1 minus the sum of Part II, Lines 3, 5, and 7 and Part III, Line
13 of Worksheet S-3). We then computed the amounts of overhead salaries
and hours to be allocated to excluded areas by multiplying the above
ratio by the total overhead salaries and hours reported on Line 13 of
Worksheet S-3, Part III. Finally, we subtracted the computed overhead
salaries and hours associated with excluded areas from the total
salaries and hours derived in Steps 2 and 3.
Step 5--For each hospital, we adjusted the total salaries plus
wage-related costs to a common period to determine total adjusted
salaries plus wage-related costs. To make the wage adjustment, we
estimated the percentage change in the employment cost index (ECI) for
compensation for each 30-day increment from October 14, 1996 through
April 15, 1998 for private industry hospital workers from the Bureau of
Labor Statistics' Compensation and Working Conditions. We use the ECI
because it reflects the price increase associated with total
compensation (salaries plus fringes) rather than just the increase in
salaries. In addition, the ECI includes managers as well as other
hospital workers. This methodology to compute the monthly update
factors uses actual quarterly ECI data and assures that the update
factors match the actual quarterly and annual percent changes. The
factors used to adjust the hospital's data were based on the midpoint
of the cost reporting period, as indicated below.
Midpoint of Cost Reporting Period
------------------------------------------------------------------------
Adjustment
After Before factor
------------------------------------------------------------------------
10/14/96........................... 11/15/96............. 1.02848
11/14/96........................... 12/15/96............. 1.02748
12/14/96........................... 01/15/97............. 1.02641
01/14/97........................... 02/15/97............. 1.02521
02/14/97........................... 03/15/97............. 1.02387
03/14/97........................... 04/15/97............. 1.02236
04/14/97........................... 05/15/97............. 1.02068
05/14/97........................... 06/15/97............. 1.01883
06/14/97........................... 07/15/97............. 1.01695
07/14/97........................... 08/15/97............. 1.01520
08/14/97........................... 09/15/97............. 1.01357
09/14/97........................... 10/15/97............. 1.01182
10/14/97........................... 11/15/97............. 1.00966
11/14/97........................... 12/15/97............. 1.00712
12/14/97........................... 01/15/98............. 1.00451
01/14/98........................... 02/15/98............. 1.00213
02/14/98........................... 03/15/98............. 1.00000
03/14/98........................... 04/15/98............. 0.99798
------------------------------------------------------------------------
For example, the midpoint of a cost reporting period beginning
January 1, 1997 and ending December 31, 1997 is June 30, 1997. An
adjustment factor of 1.01695 would be applied to the wages of a
hospital with such a cost reporting period. In addition, for the data
for any cost reporting period that began in FY 1997 and covers a period
of less than 360 days or more than 370 days, we annualized the data to
reflect a 1-year cost report. Annualization is accomplished by dividing
the data by the number of days in the cost report and then multiplying
the results by 365.
Step 6--Each hospital was assigned to its appropriate urban or
rural labor market area before any reclassifications under section
1886(d)(8)(B) or section 1886(d)(10) of the Act. Within each urban or
rural labor market area, we added the total adjusted salaries plus
wage-related costs obtained in Step 5 (with and without GME and CRNA
costs) for all hospitals in that area to determine the total adjusted
salaries plus wage-related costs for the labor market area.
Step 7--We divided the total adjusted salaries plus wage-related
costs obtained under both methods in Step 6 by the sum of the
corresponding total hours (from Step 4) for all hospitals in each labor
market area to determine an average hourly wage for the area.
Because the proposed FY 2001 wage index is based on a blend of
average hourly wages, we then added 60 percent of the average hourly
wage calculated without removing GME and CRNA costs, and 40 percent of
the average hourly wage calculated with these costs excluded.
Step 8--We added the total adjusted salaries plus wage-related
costs obtained in Step 5 for all hospitals in the nation and then
divided the sum by the national sum of total hours from Step 4 to
arrive at a national average hourly wage (using the same blending
methodology described in Step 7). Using the data as described above,
the national average hourly wage is $21.6988.
Step 9--For each urban or rural labor market area, we calculated
the hospital wage index value by dividing the area average hourly wage
obtained in Step 7 by the national average hourly wage computed in Step
8.
Step 10--Following the process set forth above, we developed a
separate Puerto Rico-specific wage index for purposes of adjusting the
Puerto Rico standardized amounts. (The national Puerto Rico
standardized amount is adjusted by a wage index calculated for all
Puerto Rico labor market areas based on the national average hourly
wage as described above.) We added the total adjusted salaries plus
wage-related costs (as calculated in Step 5) for all hospitals in
Puerto Rico and divided the sum by the total hours for Puerto Rico (as
calculated in Step 4) to arrive at an overall average hourly wage of
$9.9667 for Puerto Rico. For each labor market area in Puerto Rico, we
calculated the Puerto Rico-specific wage index value by dividing the
area average hourly wage (as calculated in Step 7) by the overall
Puerto Rico average hourly wage.
Step 11--Section 4410 of Public Law 105-33 provides that, for
discharges on or after October 1, 1997, the area wage index applicable
to any hospital that is located in an urban area may not be less than
the area wage index applicable to hospitals located in rural areas in
that State. Furthermore, this wage index floor is to be implemented in
such a manner as to assure that aggregate
[[Page 26300]]
prospective payment system payments are not greater or less than those
that would have been made in the year if this section did not apply.
For FY 2001, this change affects 241 hospitals in 41 MSAs. The MSAs
affected by this provision are identified in Table 4A by a footnote.
F. Revisions to the Wage Index Based on Hospital Redesignation
Under section 1886(d)(8)(B) of the Act, hospitals in certain rural
counties adjacent to one or more MSAs are considered to be located in
one of the adjacent MSAs if certain standards are met. Under section
1886(d)(10) of the Act, the Medicare Geographic Classification Review
Board (MGCRB) considers applications by hospitals for geographic
reclassification for purposes of payment under the prospective payment
system.
Under section 152 of Public Law 106-113, hospitals in certain
counties are deemed to be located in specified areas for purposes of
payment under the hospital inpatient prospective payment system, for
discharges occurring on or after October 1, 2000. For payment purposes,
these hospitals are to be treated as though they were reclassified for
purposes of both the standardized amount and the wage index. We are
proposing to calculate FY 2001 wage indexes for hospitals in the
affected counties as if they were reclassified to the specified area.
For purposes of making payments under section 1886(d) of the Act
for FY 2001, section 152 provides the following:
Iredell County, North Carolina is deemed to be located in
the Charlotte-Gastonia-Rock Hill, North Carolina-South Carolina MSA;
Orange County, New York is deemed to be located in the New
York, New York MSA;
Lake County, Indiana and Lee County, Illinois are deemed
to be located in the Chicago, Illinois MSA;
Hamilton-Middletown, Ohio is deemed to be located in the
Cincinnati, Ohio-Kentucky-Indiana MSA;
Brazoria County, Texas is deemed to be located in the
Houston, Texas MSA;
Chittenden County, Vermont is deemed to be located in the
Boston-Worcester-Lawrence-Lowell-Brockton, Massachusetts-New Hampshire
MSA.
Section 152 also requires that these reclassifications be treated
for FY 2001 as though they are reclassification decisions by the MGCRB.
Therefore, the proposed wage indexes for the areas to which these
hospitals are reclassifying, as well as the wage indexes for the areas
in which they are located, are subject to all of the normal rules for
calculating wage indexes for hospitals affected by reclassification
decisions by the MGCRB, as described below.
In addition, we would note that the reclassifications enacted by
section 152 pertain only to the hospitals located in the specified
counties, not to hospitals in other counties within the MSA or
hospitals reclassified into the MSA by the MGCRB.
Under section 154 of Public Law 106-113, the Allentown-Bethlehem-
Easton, Pennsylvania MSA wage index will be calculated including the
wage data for Lehigh Valley Hospital. Section 154 states that, for FY
2001, ``[n]otwithstanding any other provision of section 1886(d) of the
Social Security Act (42 U.S.C. 1395ww(d)), in calculating and applying
the wage indices under that section for discharges occurring during
fiscal year 2001, Lehigh Valley Hospital shall be treated as being
classified in the Allentown-Bethlehem-Easton Metropolitan Statistical
Area.'' This statutory language directs us to include Lehigh Valley
Hospital's wage data in the wage index calculation for the Allentown-
Bethlehem-Easton MSA for FY 2000 and FY 2001, and to apply the
Allentown-Bethlehem-Easton MSA wage index to Lehigh Valley Hospital for
discharges occurring during FY 2001.
Section 1886(d)(8)(B) of the Act established that a hospital
located in a rural county adjacent to one or more urban areas is
treated as being located in the MSA to which the greatest number of
workers in the county commute, if the rural county would otherwise be
considered part of an MSA (or NECMAs), if the commuting rates used in
determining outlying counties were determined on the basis of the
aggregate number of resident workers who commute to (and, if applicable
under the standards, from) the central county or counties of all
contiguous MSAs. Through FY 2000, hospitals are required to use
standards published in the Federal Register on January 3, 1980, by the
Office of Management and Budget. For FY 2000, there were 26 hospitals
affected by this provision.
Section 402 of Public Law 106-113 amended section 1886(d)(8)(B) of
the Act to allow hospitals to elect to use the standards published in
the Federal Register on January 3, 1980 (1980 decennial census data) or
March 30, 1990 (1990 decennial census data) during FY 2001 and FY 2002.
As of FY 2003, hospitals will be required to use the standards
published in the Federal Register by the Director of the Office of
Management and Budget based on the most recent available decennial
population data.
We are in the process of working with the Office of Management and
Budget to identify the hospitals that would be affected by this
amendment. We refer the reader to the September 30, 1988 final rule (53
FR 38499) for a complete discussion of our approach to identify the
outlying counties using the standards published in the January 3, 1980
Federal Register.
The methodology for determining the wage index values for
redesignated hospitals is applied jointly to the hospitals located in
those rural counties that were deemed urban under section 1886(d)(8)(B)
of the Act and those hospitals that were reclassified as a result of
the MGCRB decisions under section 1886(d)(10) of the Act. Section
1886(d)(8)(C) of the Act provides that the application of the wage
index to redesignated hospitals is dependent on the hypothetical impact
that the wage data from these hospitals would have on the wage index
value for the area to which they have been redesignated. Therefore, as
provided in section 1886(d)(8)(C) of the Act, the wage index values
were determined by considering the following:
If including the wage data for the redesignated hospitals
would reduce the wage index value for the area to which the hospitals
are redesignated by 1 percentage point or less, the area wage index
value determined exclusive of the wage data for the redesignated
hospitals applies to the redesignated hospitals.
If including the wage data for the redesignated hospitals
reduces the wage index value for the area to which the hospitals are
redesignated by more than 1 percentage point, the redesignated
hospitals are subject to that combined wage index value.
If including the wage data for the redesignated hospitals
increases the wage index value for the area to which the hospitals are
redesignated, both the area and the redesignated hospitals receive the
combined wage index value.
The wage index value for a redesignated urban or rural
hospital cannot be reduced below the wage index value for the rural
areas of the State in which the hospital is located.
Rural areas whose wage index values would be reduced by
excluding the wage data for hospitals that have been redesignated to
another area continue to have their wage index values calculated as if
no redesignation had occurred.
Rural areas whose wage index values increase as a result
of excluding the wage data for the hospitals that have been
redesignated to another area have
[[Page 26301]]
their wage index values calculated exclusive of the wage data of the
redesignated hospitals.
The wage index value for an urban area is calculated
exclusive of the wage data for hospitals that have been reclassified to
another area. However, geographic reclassification may not reduce the
wage index value for an urban area below the statewide rural wage index
value.
We note that, except for those rural areas in which redesignation
would reduce the rural wage index value, the wage index value for each
area is computed exclusive of the wage data for hospitals that have
been redesignated from the area for purposes of their wage index. As a
result, several urban areas listed in Table 4A have no hospitals
remaining in the area. This is because all the hospitals originally in
these urban areas have been reclassified to another area by the MGCRB.
These areas with no remaining hospitals receive the prereclassified
wage index value. The prereclassified wage index value will apply as
long as the area remains empty.
The proposed wage index values for FY 2001 are shown in Tables 4A,
4B, 4C, and 4F in the Addendum to this proposed rule. Hospitals that
are redesignated should use the wage index values shown in Table 4C.
Areas in Table 4C may have more than one wage index value because the
wage index value for a redesignated urban or rural hospital cannot be
reduced below the wage index value for the rural areas of the State in
which the hospital is located. When the wage index value of the area to
which a hospital is redesignated is lower than the wage index value for
the rural areas of the State in which the hospital is located, the
redesignated hospital receives the higher wage index value; that is,
the wage index value for the rural areas of the State in which it is
located, rather than the wage index value otherwise applicable to the
redesignated hospitals.
Tables 4D and 4E list the average hourly wage for each labor market
area, before the redesignation of hospitals, based on the FY 1997 wage
data. In addition, Table 3C in the Addendum to this proposed rule
includes the adjusted average hourly wage for each hospital based on
the preliminary FY 1997 data as of February 25, 2000 (reflecting the
phase-out of GME and CRNA wages as described at section III.C of this
preamble). The MGCRB will use the average hourly wage published in the
final rule to evaluate a hospital's application for reclassification
for FY 2002 (unless that average hourly wage is later revised in
accordance with the wage data correction policy described in
Sec. 412.63(w)(2)). We note that in adjudicating these wage index
reclassifications the MGCRB will use the average hourly wages for each
hospital and labor market area that are reflected in the final FY 2001
wage index.
At the time this proposed wage index was constructed, the MGCRB had
completed its review of FY 2001 reclassification requests. The proposed
FY 2001 wage index values incorporate all 586 hospitals redesignated
for purposes of the wage index (hospitals redesignated under section
1886(d)(8)(B) or 1886(d)(10) of the Act, and section 152 Public Law
106-113) for FY 2001. The final number of reclassifications may vary
because some MGCRB decisions are still under review by the
Administrator and because some hospitals may withdraw their requests
for reclassification.
Any changes to the wage index that result from withdrawals of
requests for reclassification, wage index corrections, appeals, and the
Administrator's review process will be incorporated into the wage index
values published in the final rule following this proposed rule. The
changes may affect not only the wage index value for specific
geographic areas, but also the wage index value redesignated hospitals
receive; that is, whether they receive the wage index value for the
area to which they are redesignated, or a wage index value that
includes the data for both the hospitals already in the area and the
redesignated hospitals. Further, the wage index value for the area from
which the hospitals are redesignated may be affected.
Under Sec. 412.273, hospitals that have been reclassified by the
MGCRB are permitted to withdraw their applications within 45 days of
the publication of this proposed rule in the Federal Register. The
request for withdrawal of an application for reclassification that
would be effective in FY 2001 must be received by the MGCRB by June 19,
2000. A hospital that requests to withdraw its application may not
later request that the MGCRB decision be reinstated.
G. Requests for Wage Data Corrections
To allow hospitals time to evaluate the wage data used to construct
the proposed FY 2001 hospital wage index, we made available to the
public a data file containing the FY 1997 hospital wage data. As stated
in section II.D of this preamble, the data file used to construct the
proposed wage index includes FY 1997 data submitted to HCFA as of mid-
February 2000. In a memorandum dated January 28, 2000, we instructed
all Medicare intermediaries to inform the prospective payment hospitals
that they service of the availability of the wage data file and the
process and timeframe for requesting revisions. The wage data file was
made available on February 7, 2000 through the Internet at HCFA's home
page (http://www.hcfa.gov). We also instructed the intermediaries to
advise hospitals of the availability of these data either through their
representative hospital organizations or directly from HCFA. Additional
details on ordering this data file are discussed in section IX.A of
this preamble, ``Requests for Data from the Public.''
In addition, Table 3C in the Addendum to this proposed rule
contains each hospital's adjusted average hourly wage used to construct
the proposed wage index values. It should be noted that the hospital
average hourly wages shown in Table 3C may not reflect any changes made
to a hospital's data after February 7, 2000. Changes approved by a
hospital's fiscal intermediary and forwarded to HCFA by April 3, 2000
will be reflected on the final public use wage data file scheduled to
be made available on May 5, 2000.
We believe hospitals have sufficient time to ensure the accuracy of
their FY 1997 wage data. Moreover, the ultimate responsibility for
accurately completing the cost report rests with the hospital, which
must attest to the accuracy of the data at the time the cost report is
filed. However, if, after review of the wage data file released
February 4, 2000, a hospital believed that its FY 1997 wage data were
incorrectly reported, the hospital was to submit corrections along with
complete, detailed supporting documentation to its intermediary by
March 6, 2000. Hospitals were notified of this deadline, and of all
other possible deadlines and requirements, through written
communications from their fiscal intermediaries in late January 2000.
After reviewing requested changes submitted by hospitals,
intermediaries transmitted any revised cost reports to HCFA and
forwarded a copy of the revised Worksheet S-3, Parts II and III to the
hospitals. In addition, fiscal intermediaries were to notify hospitals
of the changes or the reasons that changes were not accepted. This
procedure ensures that hospitals have every opportunity to verify the
data that will be used to construct their wage index values. We believe
that fiscal intermediaries are generally in the best position to make
evaluations regarding the appropriateness of a particular cost and
whether it should be included in the wage index data. However, if a
[[Page 26302]]
hospital disagrees with the intermediary's resolution of a requested
change, the hospital may contact HCFA in an effort to resolve policy
disputes. We note that the April 3, 2000 deadline also applies to these
requested changes. We will not consider factual determinations at this
time, as these should have been resolved earlier in the process.
Any wage data corrections to be reflected in the final wage index
must have been reviewed and verified by the intermediary and
transmitted to HCFA on or before April 3, 2000. (The deadline for
hospitals to request changes from their fiscal intermediaries was March
6, 2000.) These deadlines are necessary to allow sufficient time to
review and process the data so that the final wage index calculation
can be completed for development of the final prospective payment rates
to be published by August 1, 2000.
We have created the process described above to resolve all
substantive wage data correction disputes before we finalize the wage
data for the FY 2001 payment rates. Accordingly, hospitals that do not
meet the procedural deadlines set forth above will not be afforded a
later opportunity to submit wage data corrections or to dispute the
intermediary's decision with respect to requested changes.
The final wage data public use file will be released by May 5,
2000. Hospitals should examine both Table 3C of this proposed rule and
the May 5 final public use wage data file (which reflects revisions to
the data used to calculate the values in Table 3C) to verify the data
HCFA is using to calculate the wage index. Hospitals will have until
June 5, 2000, to submit requests to correct errors in the final wage
data due to data entry or tabulation errors by the intermediary or
HCFA. The correction requests that will be considered at that time will
be limited to errors in the entry or tabulation of the final wage data
that the hospital could not have known about before the release of the
final wage data public use file.
As noted above in section III.C of this preamble, the final wage
data file released on May 5, 2000 will include hospitals' teaching
survey data as well as cost report data. As with the file made
available in February 2000, HCFA will make the final wage data file
released in May 2000 available to hospital associations and the public
on the Internet. However, this file is being made available solely for
the limited purpose of identifying any potential errors made by HCFA or
the intermediary in the entry of the final wage data that result from
the correction process described above (with the March 6 deadline).
Hospitals are encouraged to review their hospital wage data promptly
after the release of the final file because data presented at this time
cannot be used by hospitals to initiate new wage data correction
requests.
If, after reviewing the final file, a hospital believes that its
wage data are incorrect due to a fiscal intermediary or HCFA error in
the entry or tabulation of the final wage data, it should send a letter
to both its fiscal intermediary and HCFA. The letters should outline
why the hospital believes an error exists and provide all supporting
information, including dates. These requests must be received by HCFA
and the intermediaries no later than June 5, 2000. Requests mailed to
HCFA should be sent to: Health Care Financing Administration; Center
for Health Plans and Providers; Attention: Wage Index Team, Division of
Acute Care; C4-07-07; 7500 Security Boulevard; Baltimore, MD 21244-
1850. Each request must also be sent to the hospital's fiscal
intermediary. The intermediary will review requests upon receipt and
contact HCFA immediately to discuss its findings.
At this point in the process, changes to the hospital wage data
will only be made in those very limited situations involving an error
by the intermediary or HCFA that the hospital could not have known
about before its review of the final wage data file. Specifically,
neither the intermediary nor HCFA will accept the following types of
requests at this stage of the process:
Requests for wage data corrections that were submitted too
late to be included in the data transmitted to HCFA on or before April
3, 2000.
Requests for correction of errors that were not, but could
have been, identified during the hospital's review of the February 2000
wage data file.
Requests to revisit factual determinations or policy
interpretations made by the intermediary or HCFA during the wage data
correction process.
Verified corrections to the wage index received timely (that is, by
June 5, 2000) will be incorporated into the final wage index to be
published by August 1, 2000 and effective October 1, 2000.
Again, we believe the wage data correction process described above
provides hospitals with sufficient opportunity to bring errors in their
wage data to the intermediary's attention. Moreover, because hospitals
will have access to the final wage data by early May 2000, they will
have the opportunity to detect any data entry or tabulation errors made
by the intermediary or HCFA before the development and publication of
the FY 2001 wage index by August 1, 2000 and the implementation of the
FY 2001 wage index on October 1, 2000. If hospitals avail themselves of
this opportunity, the wage index implemented on October 1, should be
virtually error free. Nevertheless, in the unlikely event that errors
should occur after that date, we retain the right to make midyear
changes to the wage index under very limited circumstances.
Specifically, in accordance with Sec. 412.63(w)(2), we may make
midyear corrections to the wage index only in those limited
circumstances in which a hospital can show (1) that the intermediary or
HCFA made an error in tabulating its data; and (2) that the hospital
could not have known about the error, or did not have an opportunity to
correct the error, before the beginning of FY 2001 (that is, by the
June 5, 2000 deadline). As indicated earlier, since a hospital will
have the opportunity to verify its data, and the intermediary will
notify the hospital of any changes, we do not foresee any specific
circumstances under which midyear corrections would be necessary.
However, should a midyear correction be necessary, the wage index
change for the affected area will be effective prospectively from the
date the correction is made.
IV. Other Decisions and Proposed Changes to the Prospective Payment
System for Inpatient Operating Costs and Graduate Medical Education
Costs
A. Expanding the Transfer Definition to Include Postacute Care
Discharges (Sec. 412.4)
In accordance with section 1886(d)(5)(I) of the Act, the
prospective payment system distinguishes between ``discharges,''
situations in which a patient leaves an acute care (prospective
payment) hospital after receiving complete acute care treatment, and
``transfers,'' situations in which the patient is transferred to
another acute care hospital for related care. Our policy, as set forth
in the regulations at Sec. 412.4, provides that, in a transfer
situation, full payment is made to the final discharging hospital and
each transferring hospital is paid a per diem rate for each day of the
stay, not to exceed the full DRG payment that would have been made if
the patient had been discharged without being transferred.
Effective with discharges on or after October 1, 1998, section
1886(d)(5)(J) of the Act required the Secretary to define
[[Page 26303]]
and pay as transfers all cases assigned to one of 10 DRGs (identified
below) selected by the Secretary if the individuals are discharged to
one of the following settings:
A hospital or hospital unit that is not a subsection
1886(d) hospital. (Section 1886(d)(1)(B) of the Act identifies the
hospitals and hospital units that are excluded from the term
``subsection(d) hospital'' as psychiatric hospitals and units,
rehabilitation hospitals and units, children's hospitals, long-term
care hospitals, and cancer hospitals.)
A skilled nursing facility (as defined at section 1819(a)
of the Act).
Home health services provided by a home health agency, if
the services relate to the condition or diagnosis for which the
individual received inpatient hospital services, and if the home health
services are provided within an appropriate period (as determined by
the Secretary).
Therefore, any discharge from a prospective payment hospital from
one of the selected 10 DRGs that is admitted to a hospital excluded
from the prospective payment system on the date of discharge from the
acute care hospital, on or after October 1, 1998, would be considered a
transfer and paid accordingly under the prospective payment systems
(operating and capital) for inpatient hospital services. Similarly, a
discharge from an acute care inpatient hospital paid under the
prospective payment system to a skilled nursing facility on the same
date would be defined as a transfer and paid as such. This would
include cases discharged from one of the 10 selected DRGs to a
designated swing bed for skilled nursing care. We consider situations
in which home health services related to the condition or diagnosis of
the inpatient admission are received within 3 days after the discharge
as a transfer.
The statute specifies that the Secretary select 10 DRGs based upon
a high volume of discharges to postacute care and a disproportionate
use of postacute care services. We identified the following DRGs with
the highest percentage of postacute care:
DRG 14 (Specific Cerebrovascular Disorders Except
Transient Ischemic Attack (Medical)).
DRG 113 (Amputation for Circulatory System Disorders
Except Upper Limb and Toe (Surgical)).
DRG 209 (Major Joint Limb Reattachment Procedures of Lower
Extremity (Surgical)).
DRG 210 (Hip and Femur Procedures Except Major Joint
Procedures Age >17 with CC (Surgical)).
DRG 211 (Hip and Femur Procedures Except Major Joint
Procedures Age >17 without CC (Surgical)).
DRG 236 (Fractures of Hip and Pelvis (Medical)).
DRG 263 (Skin Graft and/or Debridement for Skin Ulcer or
Cellulitis with CC (Surgical))
DRG 264 (Skin Graft and/or Debridement for Skin Ulcer or
Cellulitis without CC (Surgical))
DRG 429 (Organic Disturbances and Mental Retardation
(Medical))
DRG 483 (Tracheostomy Except for Face, Mouth and Neck
Diagnoses (Surgical)).
Generally, we pay for transfers based on a per diem payment,
determined by dividing the DRG payment by the average length of stay
for that DRG. The transferring hospital receives twice the per diem
rate the first day and the per diem rate for each following day, up to
the full DRG payment. Of the 10 selected DRGs, 7 are paid under this
method. However, three DRGs exhibit a disproportionate share of costs
very early in the hospital stay. For these three DRGs, hospitals
receive one-half of the DRG payment for the first day of the stay and
one-half of the payment they would receive under the current transfer
payment method, up to the full DRG payment.
Section 1886(d)(5)(J)(iv) of the Act requires the Secretary to
include in the FY 2001 proposed rule a description of the effect of the
provision to treat as transfers cases that are assigned to one of the
10 selected DRGs and receive postacute care upon their discharge from
the hospital. Under contract with HCFA (Contract No. 500-95-0006),
Health Economics Research, Inc. (HER) conducted an analysis of the
impact on hospitals and hospital payments of the postacute transfer
provision. The analysis sought to obtain information on four primary
areas: how hospitals responded in terms of their transfer practices; a
comparison of payments and costs for these cases; whether hospitals are
attempting to circumvent the policy by delaying postacute care or
coding the patient's discharge status as something other than a
transfer; and what the next possible step is for expanding the transfer
payment policy beyond the current 10 selected DRGs or the current
postacute destinations.
Section 1886(d)(5)(J)(iv)(I) authorizes the Secretary to include in
the proposed rule for FY 2001 a description of other post-discharge
services that should be added to this postacute care transfer
provision. Since FY 1999 was the first year this policy was effective
and because of pending changes to payment policies for other postacute
care settings such as hospital outpatient departments, we have limited
data to assess whether additional postacute care settings should be
included. We will continue to closely monitor this issue as more data
become available.
In its analysis, HER relied on HCFA's Standard Analytic Files
containing claims submission data through September 1999. However, the
second and third quarter submissions for calendar year 1999 were not
complete. It was decided that transfer cases would be identified by
linking acute hospital discharges with postacute records based on
Medicare beneficiary numbers and dates of discharge from the acute
hospital with dates of admission or provision of service by the
postacute provider. This method was used rather than selecting cases
based on the discharge status code on the claim even though this code
is being used for payment to these cases because we wanted to also
assess how accurately hospitals are coding this status. However, the
need to link acute and postacute episodes further limited the analytic
data, due to the greater time lag for collecting postacute records.
Therefore, much of HER's analysis focused on only the first two
quarters of FY 1998. The two preceding fiscal years served as a
baseline for purposes of comparison.
HER looked at the 10 DRGs included under the transfer payment
policy and identified a slight decrease in the percentage of short-stay
postacute transfers. Short-stay transfers were defined as those with a
length of stay at least one day below the geometric mean length of stay
for the DRG. Comparing the share of short-stay postacute transfers to
total discharges shows that during the first two quarters of FY 1998,
the resulting percentage was 34 percent. The same comparison during the
first two quarters of FY 1999 yielded 33 percent. When HER examined the
share of short-stay postacute transfers relative to all short-stay
cases, it found that the percentage fell from 59 percent in FY 1998 to
58 percent in FY 1999. According to HER, ``[t]hese figures suggest that
the policy change resulted in a moderate decline in the number of
postacute care transfers paid for under the lower per diem
methodology.''
Evidence also suggests that hospitals are keeping patients in these
10 DRGs longer prior to transfer. The mean length of stay of short-stay
postacute transfers remained fairly constant prior to the change and
after the change, declining less than one-half percent. On the other
hand, the mean length of stay of nontransfer short-stay patients fell
by
[[Page 26304]]
1.8 percent. By comparison, the mean length of stay of long-stay
postacute transfers fell by 3.4 percent, while it fell only 2.1 percent
for long-stay nontransfers. The report suggests ``[t]he relative
decline in the length of stay of transfers among all long-stay cases
suggests that (prospective payment system) hospitals may have responded
to the policy change by holding such patients until they exceeded the
geometric mean minus one day threshold prior to post-discharge
referral.''
We believe these marginal reactions by hospitals to the postacute
transfer policy suggest that the increase in the rate of postacute
transfers over the past several years has been due to a number of
factors, of which Medicare payment policy has been only one. As
indicated in the Conference report accompanying Public Law 105-33 (H.R.
Conf. Rept. No. 105-217, 105th Cong., 1st Sess., at 740 (1997)),
Congress' intent was to ``continue to provide hospitals with strong
incentives to treat patients in the most effective and efficient
manner, while at the same time, adjust PPS payments in a manner that
accounts for reduced hospital lengths of stay because of a discharge to
another setting.'' The preliminary results of HER's report suggest that
the policy resulting from Public Law 105-33 has not had a disruptive
impact on existing clinical practices.
To assess the adequacy of payments under the new policy, HER
examined average profits per case prior to and after the policy change.
Prior to the policy change, HER found average profits for short-stay
transfers in the 10 DRGs to be $2,454 per case. Across the 10 DRGs the
average profits ranged from $32,007 per case for DRG 483 to minus $26
per case for DRG 211 (the only one of the 10 DRGs with a negative
profit margin prior to implementing the policy). After the policy
change, the average profit per case was $1,180 per case. However, 3 of
the 10 DRGs had negative average profits after implementation of the
policy. The average margin for DRG 483 declined to $16,672 per case.
The study also attempted to ascertain whether there was any
concerted effort to circumvent the policy by delaying transfers to
avoid having a case defined as a transfer, or by not coding the case
correctly on the discharge status indicator on the bill. To assess
whether postacute care was being delayed, HER considered, for the
periods preceding and subsequent to the policy change, the number and
percent of cases admitted to either a hospital or distinct-part unit of
a hospital excluded from the prospective payment system or to a skilled
nursing facility 2 or 3 days following the discharge, and the number
and percent of patients who received services from a home health agency
4 or 5 days after discharge from an acute care hospital. The
percentages are based on the share of transferred patients falling into
the time windows described above relative to all such transfers.
The analysis identified 699 patients transferred to an excluded
hospital or unit 2 or 3 days following discharge from an acute care
hospital during the first two quarters of FY 1998, and 660 such cases
during the first two quarters of FY 1999. Similarly, there were 2,219
transfers to skilled nursing facilities 2 or 3 days after discharge
during the first two quarters of FY 1998, and 1,759 during the first
two quarters of FY 1999. The percentage of such transfers was constant
for both excluded hospitals and units and for skilled nursing
facilities. The analysis found that home health referral on the 4th or
5th day following discharge fell from 17.5 percent to 16.5 percent
between the two study periods, from 12,667 cases to 9,745 cases. On the
basis of these findings, HER believes ``[t]hese results do not support
the contention that (prospective payment system) hospitals (would)
circumvent the lower per diem payments by delaying the date of
postacute care admission or visit.''
The study also examined the discharge destination codes as reported
on the acute care hospital claims against postacute care transfers
identified on the basis of a postacute care claim indicating the
patient qualifies as a transfer. This analysis found that in 1998, only
74 percent of transfer cases had discharge destination codes on the
acute care hospital claim that were consistent with whether there was a
postacute care claim for the case matching the date of discharge. In FY
1999, the year the postacute care transfer policy went into effect,
this rate rose to 79 percent. This indicates that hospitals are
improving the accuracy of coding transfer cases.
Transfers to hospitals or units excluded from the prospective
payment system must have a discharge destination code (Patient Status)
of 05. Transfers to a skilled nursing facility must have a discharge
destination code of 03. Transfers to a home health agency must have a
discharge destination code of 06. If the hospital's continuing care
plan for the patient is not related to the purpose of the inpatient
hospital admission, a condition code 42 must be entered on the claim.
If the continuing care plan is related to the purpose of the inpatient
hospital admission, but care did not start within 3 days after the date
of discharge, a condition code 43 must be entered on the claim. The
presence of either of these condition codes in conjunction with
discharge destination code 06 will result in full payment rather than
the transfer payment amount. We intend to closely monitor the accuracy
of hospitals' discharge destination coding in this regard and take
whatever steps are necessary to ensure that accurate payment is made
under this policy.
Section 1886(d)(5)(J)(iv)(II) of the Act authorized but did not
require the Secretary to include as part of this proposed rule
additional DRGs to include under the postacute care transfer provision.
As part of ``The President's Plan to Modernize and Strengthen Medicare
for the 21st Century'' (July 2, 1999), the Administration committed to
not expanding the number of DRGs included in the policy until FY 2003.
Therefore, we are not proposing any change to the postacute care
settings or the 10 DRGs.
HER did undertake an analysis of how additional DRGs might be
considered for inclusion under the policy. The analysis supports the
initial 10 DRGs selected as being consistent with the nature of the
Congressional mandate. According to HER, ``[t]he top 10 DRGs chosen
initially by HCFA exhibit very large PAC [postacute care] levels and
PAC discharge rates (except for DRG 264, Skin Graft and/or Debridement
for Skin Ulcer or Cellulitis without CC, which was paired with DRG
263). All 10 appear to be excellent choices based on the other criteria
as well. Most have fairly high short-stay PAC rates (except possibly
for Strokes, DRG 14, and Mental Retardation, DRG 429).''
Extending the policy beyond these initial DRGs, however, may well
require more extensive analysis and grouping of like-DRGs. One concern
raised in the analysis relates to single DRGs including multiple
procedures with varying lengths of stay. Because the transfer payment
methodology only considers the DRG overall geometric mean length of
stay for a DRG, certain procedures with short lengths of stay relative
to other procedures in the same DRG may be more likely to be treated as
transfers. The analysis also considers pairs of DRGs, such as DRGs 263
and 264, as well as larger bundles of DRGs (grouped by common elements
such as trauma, infections, and major organ procedures). According to
HER, ``[i]n extending the PAC transfer policy, it is necessary to go
beyond the flawed concept of a single DRG to discover multiple DRGs
with a common link that
[[Page 26305]]
exhibit similar PAC statistics. Aggregation of this sort provides a
logical bridge in expanding the PAC transfer policy that is easily
justified to Congress and that avoids unintended inequities in the way
DRGs--and potentially hospitals--are treated under this policy.
Hospitals can be inadvertently penalized or not under the current
implementation criteria due to systematic differences in the DRG mix.''
Finally, the HER report concludes with a discussion of the issues
related to potentially expanding the postacute care transfer policy to
all DRGs. On the positive side, HER points to the benefits of expanding
the policy to include all DRGs:
A simple, uniform formula-driven policy;
Same policy rationale exists for all DRGs--the statutory
provision requiring the Secretary to select only 10 DRGs was a
political compromise;
DRGs with little utilization of short-stay postacute care
would not be harmed by the policy;
Less confusion in discharge destination coding; and
Hospitals that happen to be disproportionately treating
the current 10 DRGs may be harmed more than hospitals with an
aggressive short-stay postacute care transfer policy for other DRGs.
According to HER, the negative implications of expanding the policy
to all DRGs include:
The postacute care transfer policy is irrelevant for many
DRGs;
Added burden for the fiscal intermediaries to verify
discharge destination codes;
Diluted program savings beyond the initial 10 DRGs;
Difficult to identify ongoing postacute care that resumes
after discharge; and
Heterogeneous procedures within single DRGs having varying
lengths of stay.
At the time we developed this proposed rule, HER's report was not
yet in final format. We anticipate that, by the time the final FY 2001
rule is published, this report will be available in final format. We
will announce in that rule how to attain copies of the complete report.
B. Sole Community Hospitals (SCHs) (412.63, 412.73, and 413.75,
Proposed New Sec. 412.77, and Sec. 412.92)
Under the hospital inpatient prospective payment system, special
payment protections are provided to sole community hospitals (SCHs).
Section 1886(d)(5)(D)(iii) of the Act defines an SCH as, among other
things, a hospital that, by reason of factors such as isolated
location, weather conditions, travel conditions, or absence of other
hospitals (as determined by the Secretary), is the sole source of
inpatient hospital services reasonably available to Medicare
beneficiaries. The regulations that set forth the criteria a hospital
must meet to be classified as an SCH are located at Sec. 412.92(a).
Currently SCHs are paid based on whichever of the following rates
yields the greatest aggregate payment to the hospital for the cost
reporting period: the Federal national rate applicable to the hospital;
or the hospital's ``target amount'';--that is, either the updated
hospital-specific rate based on FY 1982 costs per discharge, or the
updated hospital-specific rate based on FY 1987 costs per discharge.
Section 405 of Public Law 106-113, which amended section 1886(b)(3)
of the Act, provides that an SCH that was paid for its cost reporting
period beginning during 1999 on the basis of either its FY 1982 or FY
1987 target amount (the hospital-specific rate as opposed to the
Federal rate) may elect to receive payment under a methodology using a
third hospital-specific rate based on the hospital's FY 1996 costs per
discharge. This amendment to the statute means that, for discharges
occurring in FY 2001, eligible SCHs can elect to use the allowable FY
1996 operating costs for inpatient hospital services as the basis for
their target amount, rather than either their FY 1982 or FY 1987 costs.
We are aware that language in the Conference Report accompanying
Public Law 106-113 indicates that the House bill (H.R. 3075) would have
permitted SCHs that were being paid the Federal rate to rebase, not
SCHs that were paid on the basis of either their FY 1982 or FY 1987
target amount (H.R. Conf. Rep. No. 106-479, 106th Cong., 1st Sess. at
890 (1999)). The language of the section 405 amendment to section
1886(b)(3) (which added new subparagraph (I)(ii)) clearly limits the
option to substitute the FY 1996 base year to SCHs that were paid for
their cost reporting periods beginning during 1999 on the basis of the
target amount applicable to the hospital under section 1886(b)(3)(C).
When calculating an eligible SCH's FY 1996 hospital-specific rate,
we propose to utilize the same basic methodology used to calculate FY
1982 and FY 1987 bases. That methodology is set forth in Secs. 412.71
through 412.75 of the regulations and discussed in detail in several
prospective payment system documents published in the Federal Register
on September 1, 1983 (48 FR 3977); January 3, 1984 (49 FR 256); June 1,
1984 (49 FR 23010); and April 20, 1990 (55 FR 15150).
Since we anticipate that eligible hospitals will elect the option
to rebase using their FY 1996 cost reporting periods, we are
instructing our fiscal intermediaries to identify those SCHs that were
paid for their cost reporting periods beginning during 1999 on the
basis of their target amounts. For these hospitals, fiscal
intermediaries will calculate the FY 1996 hospital-specific rate as
described below in this section IV.B. If this rate exceeds a hospital's
current target amount based on the greater of the FY 1982 or FY 1987
hospital-specific rate, the hospital will receive payment based on the
FY 1996 hospital-specific rate (based on the blended amounts described
at section 1886(b)(3)(I)(i) of the Act) unless the hospital notifies
its fiscal intermediary in writing prior to the end of the cost
reporting period that it does not wish to be paid on the basis of the
FY 1996 hospital-specific rate. Thus, if a hospital does not notify its
fiscal intermediary before the end of the cost reporting period that it
declines the rebasing option, we will deem the lack of such
notification as an election to have section 1886(b)(3)(I) of the Act
apply to the hospital.
An SCH's decision to decline this option for a cost reporting
period will remain in effect for subsequent periods until such time as
the hospital notifies its fiscal intermediary otherwise.
The FY 1996 hospital-specific rate will be based on FY 1996 cost
reporting periods beginning on or after October 1, 1995 and before
October 1, 1996, that are 12 months or longer. If the hospital's last
cost reporting period ending on or before September 30, 1996 is less
than 12 months, the hospital's most recent 12-month or longer cost
reporting period ending before the short period report would be
utilized in the computations. If a hospital has no cost reporting
period beginning in FY 1996, it would not have a hospital-specific rate
based on FY 1996.
For each hospital eligible for FY 1996 rebasing, the fiscal
intermediary would calculate a hospital-specific rate based on the
hospital's FY 1996 cost report as follows:
Determine the hospital's total allowable Medicare
inpatient operating cost, as stated on the FY 1996 cost report.
Divide the total Medicare operating cost by the number of
Medicare discharges in the cost reporting period to determine the FY
1996 base period cost per case. For this purpose, transfers are
considered to be discharges.
[[Page 26306]]
In order to take into consideration the hospital's
individual case-mix, divide the base year cost per case by the
hospital's case-mix index applicable to the FY 1996 cost reporting
period. This step is necessary to standardize the hospital's base
period cost for case-mix and is consistent with our treatment of both
FY 1982 and FY 1987 base-period costs per case. A hospital's case-mix
is computed based on its Medicare patient discharges subject to DRG-
based payment.
The fiscal intermediary will notify eligible hospitals of their FY
1996 hospital-specific rate prior to October 1, 2000. Consistent with
our policies relating to FY 1982 and FY 1987 hospital-specific rates,
we propose to permit hospitals to appeal a fiscal intermediary's
determination of the FY 1996 hospital-specific rate under the
procedures set forth in 42 CFR part 405, subpart R, which concern
provider payment determinations and appeals. In the event of a
modification of base period costs for FY 1996 rebasing due to a final
nonappealable court judgment or certain administrative actions (as
defined in Sec. 412.72(a)(3)(i)), the adjustment would be retroactive
to the time of the intermediary's initial calculation of the base
period costs, consistent with the policy for rates based on FY 1982 and
FY 1987 costs.
Section 405 prescribes the following formula to determine the
payment for SCHs that elect rebasing:
For discharges during FY 2001:
75 percent of the updated FY 1982 or FY 1987 former target
(identified in the statute as the ``subparagraph (C) target amount''),
plus
25 percent of the updated FY 1996 amount (identified in
the statute as the ``''rebased target amount'').
For discharges during FY 2002:
50 percent of the updated FY 1982 or FY 1987 former
target, plus
50 percent of the updated FY 1996 amount.
For discharges during FY 2003:
25 percent of the updated FY 1982 or FY 1987 former
target, plus
75 percent of the updated FY 1996 amount.
For discharges during FY 2004 or any subsequent fiscal year, the
hospital-specific rate would be determined based on 100 percent of the
updated FY 1996 amount.
We are proposing to add a new Sec. 412.77 and amend Sec. 412.92(d)
to incorporate the provisions of section 1886(b)(3)(I) of the Act, as
added by section 405 of Public Law 106-113.
Section 406 of Public Law 106-113 amended section
1886(b)(3)(B)(i)(XVI) of the Act to provide, for fiscal year 2001, for
full market basket updates to both the Federal and hospital-specific
payment rates applicable to sole community hospitals. We are proposing
to amend Sec. Sec. 412.63, 412.73, and 412.75 to incorporate the
amendment made by section 406 of Public Law 106-113.
C. Rural Referral Centers (Sec. 412.96)
Under the authority of section 1886(d)(5)(C)(i) of the Act, the
regulations at Sec. 412.96 set forth the criteria a hospital must meet
in order to receive special treatment under the prospective payment
system as a rural referral center. For discharges occurring before
October 1, 1994, rural referral centers received the benefit of payment
based on the other urban amount rather than the rural standardized
amount. Although the other urban and rural standardized amounts were
the same for discharges beginning with that date, rural referral
centers would continue to receive special treatment under both the
disproportionate share hospital (DSH) payment adjustment and the
criteria for geographic reclassification.
As discussed in 62 FR 45999 and 63 FR 26317, under section 4202 of
Public Law 105-33, a hospital that was classified as a rural referral
center for FY 1991 is to be classified as a rural referral center for
FY 1998 and later years so long as that hospital continued to be
located in a rural area and did not voluntarily terminate its rural
referral center status. Otherwise, a hospital seeking rural referral
center status must satisfy applicable criteria. One of the criteria
under which a hospital may qualify as a rural referral center is to
have 275 or more beds available for use. A rural hospital that does not
meet the bed size requirement can qualify as a rural referral center if
the hospital meets two mandatory prerequisites (specifying a minimum
case-mix index and a minimum number of discharges) and at least one of
three optional criteria (relating to specialty composition of medical
staff, source of inpatients, or referral volume). With respect to the
two mandatory prerequisites, a hospital may be classified as a rural
referral center if its--
Case-mix index is at least equal to the lower of the
median case-mix index for urban hospitals in its census region,
excluding hospitals with approved teaching programs, or the median
case-mix index for all urban hospitals nationally; and
Number of discharges is at least 5,000 per year, or if
fewer, the median number of discharges for urban hospitals in the
census region in which the hospital is located. (The number of
discharges criterion for an osteopathic hospital is at least 3,000
discharges per year.)
1. Case-Mix Index
Section 412.96(c)(1) provides that HCFA will establish updated
national and regional case-mix index values in each year's annual
notice of prospective payment rates for purposes of determining rural
referral center status. The methodology we use to determine the
proposed national and regional case-mix index values is set forth in
regulations at Sec. 412.96(c)(1)(ii). The proposed national case-mix
index value includes all urban hospitals nationwide, and the proposed
regional values are the median values of urban hospitals within each
census region, excluding those with approved teaching programs (that
is, those hospitals receiving indirect medical education payments as
provided in Sec. 412.105). These values are based on discharges
occurring during FY 1999 (October 1, 1998 through September 30, 1999)
and include bills posted to HCFA's records through December 1999.
We are proposing that, in addition to meeting other criteria,
hospitals with fewer than 275 beds, if they are to qualify for initial
rural referral center status for cost reporting periods beginning on or
after October 1, 2000, must have a case-mix index value for FY 1999
that is at least--
1.3401; or
The median case-mix index value for urban hospitals
(excluding hospitals with approved teaching programs as identified in
Sec. 412.105) calculated by HCFA for the census region in which the
hospital is located.
The median case-mix values by region are set forth in the following
table:
------------------------------------------------------------------------
Case-mix
Region index value
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT).................... 1.2291
2. Middle Atlantic (PA, NJ, NY)............................ 1.2387
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)..... 1.3116
4. East North Central (IL, IN, MI, OH, WI)................. 1.2602
5. East South Central (AL, KY, MS, TN)..................... 1.2692
6. West North Central (IA, KS, MN, MO, NE, ND, SD)......... 1.1881
7. West South Central (AR, LA, OK, TX)..................... 1.2800
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)............... 1.3302
9. Pacific (AK, CA, HI, OR, WA)............................ 1.3076
------------------------------------------------------------------------
The preceding numbers will be revised in the final rule to the
extent required to reflect the updated FY 1999 MedPAR file, which will
contain data
[[Page 26307]]
from additional bills received through March 31, 2000.
For the benefit of hospitals seeking to qualify as rural referral
centers or those wishing to know how their case-mix index value
compares to the criteria, we are publishing each hospital's FY 1999
case-mix index value in Table 3C in section VI. of the Addendum to this
proposed rule. In keeping with our policy on discharges, these case-mix
index values are computed based on all Medicare patient discharges
subject to DRG-based payment.
2. Discharges
Section 412.96(c)(2)(i) provides that HCFA will set forth the
national and regional numbers of discharges in each year's annual
notice of prospective payment rates for purposes of determining rural
referral center status. As specified in section 1886(d)(5)(C)(ii) of
the Act, the national standard is set at 5,000 discharges. We are
proposing to update the regional standards based on discharges for
urban hospitals' cost reporting periods that began during FY 1998 (that
is, October 1, 1997 through September 30, 1998). That is the latest
year for which we have complete discharge data available.
Therefore, we are proposing that, in addition to meeting other
criteria, a hospital, if it is to qualify for initial rural referral
center status for cost reporting periods beginning on or after October
1, 2000, must have as the number of discharges for its cost reporting
period that began during FY 1999 a figure that is at least--
5,000; or
The median number of discharges for urban hospitals in the
census region in which the hospital is located, as indicated in the
following table:
------------------------------------------------------------------------
Number of
Region discharges
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT).................... 6,733
2. Middle Atlantic (PA, NJ, NY)............................ 8,681
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)..... 7,845
4. East North Central (IL, IN, MI, OH, WI)................. 7,526
5. East South Central (AL, KY, MS, TN)..................... 6,852
6. West North Central (IA, KS, MN, MO, NE, ND, SD)......... 5,346
7. West South Central (AR, LA, OK, TX)..................... 5,380
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)............... 8,026
9. Pacific (AK, CA, HI, OR, WA)............................ 6,160
------------------------------------------------------------------------
We note that the number of discharges for hospitals in each census
region is greater than the national standard of 5,000 discharges.
Therefore, 5,000 discharges is the minimum criterion for all hospitals.
These numbers will be revised in the final rule based on the latest FY
1998 cost report data.
We reiterate that an osteopathic hospital, if it is to qualify for
rural referral center status for cost reporting periods beginning on or
after October 1, 2000, must have at least 3,000 discharges for its cost
reporting period that began during FY 1999.
D. Indirect Medical Education (IME) Adjustment (Sec. 412.105)
Section 1886(d)(5)(B) of the Act provides that prospective payment
hospitals that have residents in an approved graduate medical education
(GME) program receive an additional payment to reflect the higher
indirect operating costs associated with GME. The regulations regarding
the calculation of this additional payment, known as the indirect
medical education (IME) adjustment, are located at Sec. 412.105.
Section 111 of Public Law 106-113 modified the transition for the
IME adjustment that was established by Public Law 105-33. We will
publish these changes in a separate interim final rule with comment
period. However, for discharges occurring during FY 2001, the
adjustment formula equation used to calculate the IME adjustment factor
is 1.54 x [(1 + r) \.405\ -1]. (The variable r represents the
hospital's resident-to-bed ratio.)
In the July 30, 1999 final rule (64 FR 41517), we set forth certain
policies that affected payment for both direct and indirect GME. These
policies related to adjustments to full-time equivalent (FTE) resident
caps for new medical residency programs affecting both direct and
indirect GME programs; the adjustment to GME caps for certain hospitals
under construction prior to August 5, 1997 (the enactment date of
Public Law 105-33) to account for residents in new medical residency
training programs; and the temporary adjustment to FTE caps to reflect
residents affected by hospital closures. When we amended the
regulations under Sec. 413.86 for direct GME, we inadvertently did not
make the corresponding changes in Sec. 412.105 for IME. We are
proposing to make the following conforming changes:
To amend Sec. 412.105(f)(1)(vii) to provide for an
adjustment to the FTE caps for new medical residency programs as
specified under Sec. 413.86(g)(6).
To add a new Sec. 412.105(f)(1)(viii) related to the
adjustment to the FTE caps for newly constructed hospitals that sponsor
new residency programs in effect on or after January 1, 1995, and on or
before August 5, 1997, that either received initial accreditation by
the appropriate accrediting body or temporarily trained residents at
another hospital(s) until the facility was completed, to conform to the
provisions of Sec. 413.86(g)(7).
To add a new Sec. 412.105(f)(1)(ix) to specify that a
hospital may receive a temporary adjustment to its FTE cap to take into
account residents added because of another hospital's closure if the
hospital meets the criteria listed under Sec. 413.86(g)(8).
In addition, we are proposing to add a cross-reference to
``Sec. 413.86(d)(3)(i) through (v)'' in Sec. 412.105(g), and to correct
the applicable period in both Secs. 412.105(g) and 413.86(d)(3) by
revising the phrase ``For portions of cost reporting periods beginning
on or after January 1, 1998'' to read ``For portions of cost reporting
periods occurring on or after January 1, 1998''.
E. Payments to Disproportionate Share Hospitals (Sec. 412.106)
Effective for discharges beginning on or after May 1, 1986,
hospitals that treat a disproportionately large number of low-income
patients (as defined in section 1886(d)(5)(F) of the Act) receive
additional payments through the DSH adjustment. Section 4403(a) of
Public Law 105-33 amended section 1886(d)(5)(F) of the Act to reduce
the payment a hospital would otherwise receive under the current
disproportionate share formula by 1 percent for FY 1998, 2 percent for
FY 1999, 3 percent for FY 2000, 4 percent for FY 2001, 5 percent for
2002, and 0 percent for FY 2003 and each subsequent fiscal year.
Subsequently, section 112 of Public Law 106-113 modified the amount of
the reductions under Public Law 105-33 by changing the reduction to 3
percent for FY 2001 and 4 percent for FY 2002. The reduction continues
to be 0 percent for FY 2003 and each subsequent fiscal year. We are
proposing to revise Sec. 412.106(e) to reflect the changes in the
statute made by Public Law 106-113.
Section 112 of Public Law 106-113 also directs the Secretary to
require prospective payment system hospitals to submit data on the
costs incurred by the hospitals for providing inpatient and outpatient
hospital services for which the hospitals are not compensated,
including non-Medicare bad debt, charity care, and charges for medical
and indigent care to the Secretary as part of hospitals' cost reports.
These data are required for cost reporting periods beginning on or
after October 1,
[[Page 26308]]
2001. We will be revising our instructions to hospitals for cost
reports for FY 2002 to capture these data.
F. Medicare Geographic Classification Review Board (Secs. 412.256 and
412.276)
With the creation of the Medicare Geographic Classification Review
Board (MGCRB), beginning in FY 1991, under section 1886(d)(10) of the
Act, hospitals could request reclassification from one geographic
location to another for the purpose of using the other area's
standardized amount for inpatient operating costs or the wage index
value, or both (September 6, 1990 interim final rule with comment
period (55 FR 36754), June 4, 1991 final rule with comment period (56
FR 25458), and June 4, 1992 proposed rule (57 FR 23631)). Implementing
regulations in Subpart L of Part 412 (412.230 et seq.) set forth
criteria and conditions for redesignations from rural to urban, rural
to rural, or from an urban area to another urban area with special
rules for SCHs and rural referral centers.
1. Provisions of Public Law 106-113
Section 401 of Public Law 106-113 amended section 1886(d)(8) of the
Act by adding subparagraph (E), which creates a mechanism, separate and
apart from the MGCRB, permitting an urban hospital to apply to the
Secretary to be treated as being located in the rural area of the State
in which the hospital is located. The statute directs the Secretary to
treat a qualifying hospital as being located in a rural area for
purposes of provisions under section 1886(d) of the Act. In addition,
section 401 of Public Law 106-113 went on to incorporate the effects of
such reclassifications from urban to rural for purposes of Medicare
payments to outpatient departments and to hospitals that would qualify
to become critical access hospitals.
Regulations implementing section 1886(d)(8)(E) of the Act are
currently under development and will be published in a separate
document. However, we note that the statutory language of section
1886(d)(8)(E) of the Act does not address the issue of interactions
between changes in classification under section 1886(d)(8)(E) of the
Act and the MGCRB reclassification process under section 1886(d)(10) of
the Act. The Secretary has extremely broad authority under section
1886(d)(10) of the Act to establish criteria for reclassification under
the MGCRB process. Section 401 of Public Law 106-113 does not amend
section 1886(d)(10) of the Act to limit the agency's discretion under
the provision in any way, nor does section 1886(d)(8)(E) of the Act (as
added by section 401) refer to section 1886(d)(10) of the Act. However,
we note that in the Conference Report accompanying Public Law 106-113,
the language discussing the House bill (H.R. 3075, as passed) indicated
that: ``[H]ospitals qualifying under this section shall be eligible to
qualify for all categories and designations available to rural
hospitals, including sole community, Medicare dependent, critical
access, and referral centers. Additionally, qualifying hospitals shall
be eligible to apply to the Medicare Geographic Reclassification Review
Board for geographic reclassification to another area''.
We are concerned that section 1886(d)(8)(E) might create an
opportunity for some urban hospitals to take advantage of the MGCRB
process by first seeking to be reclassified as rural under section
1886(d)(8)(E) (and receiving the benefits afforded to rural hospitals)
and in turn seek reclassification through the MGCRB back to the urban
area for purposes of their standardized amount and wage index (and thus
also receive the higher payments that might result from being treated
as being located in an urban area). That is, we are concerned that some
hospitals might inappropriately seek to be treated as being located in
a rural area for some purposes and as being located in an urban area
for other purposes. In light of the Conference Report language noted
above discussing the House bill on the one hand, and the potential for
inappropriately inconsistent treatment of the same hospital on the
other hand, we are seeking public comment on this issue, and indicating
our position that we may impose a limitation on such MGCRB
reclassifications in the final rule for FY 2001, if such action appears
warranted. We also are seeking specific comments on how such a
limitation, if any, should be imposed.
For example, it could be argued that if a hospital has applied to
be treated as being located in a rural area under section 1886(d)(8)(E)
of the Act, then the hospital should be treated as rural for all
purposes under section 1886(d), and it would be inappropriate to permit
the hospital to be reclassified back to an urban area for any purpose.
Under this approach, hospitals seeking reclassification under section
1886(d)(8)(E) of the Act would be treated as rural for all purposes
under section 1886(d) and would be able to benefit from special
provisions that apply to rural hospitals. They would not, however, be
eligible for reclassification back to an urban area for either the wage
index or the standardized amount. This would apply to hospitals seeking
to reclassify either to their original MSA or to another MSA.
Under an alternative approach, hospitals reclassifying from urban
to rural under section 1886(d)(8)(E) of the Act would be eligible to
apply and be reclassified by the MGCRB like any other rural hospital
(as long as applicable regulations governing MGCRB are met). This might
allow hospitals to effectively pick from an array of urban and rural
payment policies to maximize their Medicare payments. It could be
argued that this would be the policy most consistent with the
Conference Report language but we believe that it might lead to
inappropriate, inconsistent classifications.
We are very concerned that the effect of unlimited MGCRB
reclassifications back to the area from which a hospital was
reclassified under section 1886(d)(8)(E) of the Act could have
implications beyond those envisioned by Congress when it passed Public
Law 106-113. However, in light of the Conference Report language, we
are seeking comments on this issue. In the final rule, we might adopt
one of the approaches discussed above or some other approach for
addressing this issue.
Under section 152 of Public Law 106-113, certain counties are
deemed to be located in specified areas for purposes of payment under
the hospital inpatient prospective payment system, effective for
discharges occurring on or after October 1, 2000. For payment purposes,
these hospitals are to be treated as though they were reclassified for
purposes of both the standardized amount and the wage index. These
provisions are addressed in section III.B. of this preamble, as they
relate to calculation of the FY 2001 wage indexes for hospitals in the
affected counties as if they were reclassified to the specified area;
and in the Addendum to this preamble as they relate to the standardized
amounts.
2. Revised Thresholds Applicable to Rural Hospitals for Wage Index
Reclassifications
Existing Secs. 412.230(e)(1)(iii) and (e)(1)(iv) provide that
hospitals may obtain reclassification to another area for purposes of
calculating and applying the wage index if the hospital's average
hourly wages are at least 108 percent of the average hourly wages in
the area where it is physically located, and at least 84 percent of the
average hourly wages in a proximate area to which the hospital seeks
reclassification. These thresholds apply equally to urban and rural
hospitals seeking reclassification.
[[Page 26309]]
Historically, the financial performance of rural hospitals under
the prospective payment system has lagged behind that of urban
hospitals. Despite an overall increase in recent years of Medicare
inpatient operating profit margins, some rural hospitals continue to
struggle financially (as measured by Medicare inpatient operating
prospective payment system payments minus costs, divided by payments).
For example, during FY 1997, while the national average hospital margin
was 15.1 percent, it was 8.9 percent for rural hospitals. In addition,
approximately one-third of rural hospitals continue to experience
negative Medicare inpatient margins despite this relatively high
average margin.
In response to the lower margins of rural hospitals and the
potential for a negative impact on beneficiaries' access to care if
these hospitals were to close, we considered potential administrative
changes that could help improve payments for rural hospitals. One
approach in that regard would be to make it easier for rural hospitals
to reclassify for purposes of receiving a higher wage index. The
current thresholds for applying for wage index reclassification are
based on our previous analysis showing the average hospital wage as a
percentage of its area wage was 96 percent, and one standard deviation
from that average was equal to 12 percentage points (see the June 4,
1992 proposed rule (57 FR 23635) and the September 1, 1992 final rule
(57 FR 39770)). Because rural hospitals' financial performance has
consistently remained below that of urban hospitals, we now believe
that rural hospitals merit special dispensation with respect to
qualifying for reclassification for purposes of the wage index.
Therefore, we are proposing to change those average wage threshold
percentages so more rural hospitals can be reclassified. Specifically,
we are proposing to lower the upper threshold for rural hospitals to
106 percent and the lower threshold to 82 percent. The thresholds for
urban hospitals seeking reclassification for purposes of the wage index
would be unchanged. We would note that rural hospitals comprised nearly
90 percent of FY 2000 wage index reclassifications. Under this
proposal, beginning October 1, 2000, rural hospitals would be able to
reclassify for the wage index if, among other things, their average
hourly wages are at least 106 percent of the area in which they are
physically located, and at least 82 percent of the average hourly wages
in the proximate area to which it seeks reclassification.
Although it is difficult to estimate precisely how many additional
hospitals might qualify by lowering the thresholds because we do not
have data indicating which hospitals meet all of the other
reclassification criteria (e.g., proximity), our analysis indicates
that, if we were to raise the 108 percent threshold to 109 percent,
approximately 20 rural hospitals would no longer qualify. If the upper
threshold were to be raised to 110 percent, another 16 hospitals would
not qualify. On the other hand, increasing the lower threshold from 84
percent to 85 percent would result in only 2 rural hospitals becoming
ineligible to reclassify. Only 1 additional hospital would be affected
by raising the threshold to 86 percent. Based on this analysis, we
anticipate approximately 50 rural hospitals are likely to benefit from
this proposed change.
We believe this proposal achieves an appropriate balance between
allowing certain hospitals that are currently just below the thresholds
to become eligible for reclassification, while not liberalizing the
criteria so much that an excessive number of hospitals begin to
reclassify. Because these reclassifications are budget neutral,
nonreclassified hospitals' payments are negatively impacted by
reclassification.
We believe there are many factors associated with lower margins
among rural hospitals. We would note that section 410 of Public Law
106-113 requires the Comptroller General of the United States to
``conduct a study of the current laws and regulations for geographic
reclassification of hospitals to determine whether such
reclassification is appropriate for purposes of applying wage
indices.'' In addition, section 411 of Public Law 106-113 requires
MedPAC to conduct a study on the adequacy and appropriateness of the
special payment categories and methodologies established for rural
hospitals. We anticipate that the results of these studies will help
identify other areas to help improve payments for rural hospitals,
either through reclassifications or other means.
G. Payment for Direct Costs of Graduate Medical Education (Sec. 413.86)
1. Background
Under section 1886(h) of the Act, Medicare pays hospitals for the
direct costs of graduate medical education (GME). The payments are
based on the number of residents trained by the hospital. Section
1886(h) of the Act, as amended by section 4623 of Public Law 105-33,
caps the number of residents that hospitals may count for direct GME.
Section 9202 of the Consolidated Omnibus Reconciliation Act (COBRA)
of 1985 (Public Law 99-272) established a methodology for determining
payments to hospitals for the costs of approved GME programs at section
1886(h)(2) of the Act. Section 1886(h)(2) of the Act, as implemented in
regulations at Sec. 413.86(e), sets forth a payment methodology for the
determination of a hospital-specific, base-period per resident amount
(PRA) that is calculated by dividing a hospital's allowable costs of
GME for a base period by its number of residents in the base period.
The base period is, for most hospitals, the hospital's cost reporting
period beginning in FY 1984 (that is, the period of October 1, 1983
through September 30, 1984). The PRA is multiplied by the number of
full-time equivalent (FTE) residents working in all areas of the
hospital complex (or non-hospital sites, when applicable), and the
hospital's Medicare share of total inpatient days to determine
Medicare's direct GME payments. In addition, as specified in section
1886(h)(2)(D)(ii) of the Act, for cost reporting periods beginning on
or after October 1, 1993, through September 30, 1995, each hospital's
PRA for the previous cost reporting period is not adjusted for any FTE
residents who are not either a primary care or an obstetrics and
gynecology resident. As a result, hospitals with both primary care/
obstetrics and gynecology residents and non-primary care residents have
two separate PRAs for FY 1994 and, thereafter, one for primary care and
one for non-primary care. (Thus, for purposes of this proposed rule,
when we refer to a hospital's PRA, this amount is inclusive of any CPI-
U adjustments the hospital may have received since the hospital's base-
year, including any CPI-U adjustments the hospital may have received
because the hospital trains primary care/non-primary care residents, as
specified under existing Sec. 413.86(e)(3)(ii)).
2. Use of National Average Per Resident Amount Methodology in Computing
Direct GME Payments
Section 311 of Public Law 106-113 amended section 1886(h)(2) of the
Act to establish a methodology for the use of a national average PRA in
computing direct GME payments for cost reporting periods beginning on
or after October 1, 2000 and on or before September 30, 2005.
Generally, section 311 establishes a ``floor'' and a ``ceiling'' based
on a locality-adjusted, updated, weighted average PRA. Each hospital's
PRA is compared to the floor and ceiling to determine whether its PRA
should be
[[Page 26310]]
revised. Accordingly, we are proposing to implement section 311 by
setting forth the prescribed methodology for calculation of the
weighted average PRA. We then discuss the proposed steps for
determining whether a hospital's PRA will be adjusted based upon the
proposed calculated weighted average PRA, in accordance with the
methodology specified under section 311 of Public Law 106-113.
We propose to calculate the weighted average PRA based upon data
from hospitals' cost reporting periods ending during FY 1997 (October
1, 1996 through September 30, 1997), as directed by section 311 of
Public Law 106-113. We accessed these FY 1997 cost reporting data from
the Hospital Cost Report Information System (HCRIS) and also obtained
the necessary data for those hospitals that are not included in HCRIS
(because they file manual cost reports), from those hospitals' fiscal
intermediaries. If a hospital had more than one cost reporting period
ending in FY 1997, we propose to include all of its cost reports ending
in FY 1997 in our calculations. However, if a hospital did not have a
cost reporting period ending in FY 1997, such as a hospital with a long
cost reporting period beginning in FY 1996 and ending in FY 1998, the
hospital is excluded from our calculations. One hospital is excluded
from our calculation even though it did have a cost reporting period
ending during FY 1997 because, at that time, it was a new teaching
hospital with no established PRA (the first year of training for a new
teaching hospital is paid for by Medicare on a cost basis; a PRA is
applied in calculating a hospital's payment beginning with the
hospital's second year of residency training). The total number of
hospitals that we include in our calculation is 1,235. Thirty-five of
these hospitals are hospitals with more than one cost report.
In accordance with section 311 of Public Law 106-113, we propose to
calculate the weighted average PRA in the following manner:
Step 1: We determine each hospital's single PRA by adding each
hospital's primary care and non-primary care PRAs, weighted by its
respective FTEs, and dividing by the sum of the FTEs for primary care
and non-primary care residents.
Step 2: We standardize each hospital's single PRA by dividing it by
the 1999 geographic adjustment factor (GAF) (which is an average of the
three geographic index values (weighted by the national average weight
for the work component, practice expense component, and malpractice
component)) in accordance with section 1848(e) of the Act and 42 CFR
414.26 (which is used to adjust physician payments for the different
wage areas), for the physician fee schedule area in which the hospital
is located.
Step 3: We add all the standardized hospital PRAs (as calculated in
Step 2), each weighted by hospitals' respective FTEs, and then divide
by the total number of FTEs.
Based upon this three-step calculation, we have determined the
proposed weighted average PRA (for cost reporting periods ending during
FY 1997) to be $68,487.
For cost reporting periods beginning on or after October 1, 2000
and on or before September 30, 2005 (FY 2001 through FY 2005), the
national average PRA is applied using the following three steps:
Step 1: Update the weighted average PRA for inflation. Under
section 1886(h)(2) of the Act, as amended by section 311 of Public Law
106-113, the weighted average PRA is updated by the estimated
percentage increase in the consumer price index for all urban consumers
(CPI-U) during the period beginning with the month that represents the
midpoint of the cost reporting periods ending during FY 1997 and ending
with the midpoint of the hospital's cost reporting period that begins
in FY 2001. Therefore, the weighted average standardized PRA ($68,487)
would be updated by the increase in CPI-U for the period beginning with
the midpoint of all cost reporting periods for hospitals with cost
reporting periods ending during FY 1997 (October 1, 1996), and ending
with the midpoint of the individual hospital's cost reporting period
that begins during FY 2001.
For example, Hospital A has a calendar year cost reporting period.
Thus, for Hospital A, the weighted average PRA is updated from October
1, 1996 to July 1, 2001, because July 1 is the midpoint of its cost
reporting period beginning on or after October 1, 2000. Or, for
example, if Hospital B has a cost reporting period starting October 1,
the weighted average PRA is updated from October 1, 1996 to April 1,
2001, the midpoint of the cost reporting period for Hospital B.
Therefore, the starting point for updating the weighted average PRA is
the same date for all hospitals (October 1, 1996), but the ending date
is different because it is dependent upon the cost reporting period for
each hospital.
Step 2: Adjust for locality. In accordance with section 1886(h)(2)
of the Act, as amended by section 311 of Public Law 106-113, once the
weighted average PRA is updated according to each hospital's cost
reporting period, the updated weighted average PRA (the national
average PRA) would be further adjusted to calculate a locality-adjusted
national average PRA for each hospital. This is done by multiplying the
updated national average PRA by the 1999 GAF (as specified in the
October 31, 1997 Federal Register (62 FR 59257)) for the fee schedule
area in which the hospital is located.
Step 3: Determine possible revisions to the PRA. For cost reporting
periods beginning on or after October 1, 2000 and on or before
September 30, 2005, the locality-adjusted national average PRA, as
calculated in Step 2, is then compared to the hospital's individual
PRA. Based upon the provisions of section 1886(h)(2) of the Act, as
amended by section 311 of Public Law 106-113, a hospital's PRA would be
revised, if appropriate, according to the following:
Floor--For cost reporting periods beginning in FY 2001, to
determine which PRAs (primary care and non-primary care separately) are
below the 70 percent floor, a hospital's locality-adjusted national
average PRA is multiplied by 70 percent. This resulting number is then
compared to the hospital's PRA that is updated for inflation to the
current cost reporting period. If the hospital's PRA would be less than
70 percent of the locality-adjusted national average PRA, the
individual PRA is replaced by 70 percent of the locality-adjusted
national average PRA for that cost reporting period and would be
updated for inflation in future years by the CPI-U.
We note that there may be some hospitals with primary care and non-
primary care PRAs where both PRAs are replaced by 70 percent of the
locality-adjusted national average PRA. In these situations, the
hospital would receive identical PRAs; no distinction in PRAs would be
made for differences in inflation (because a hospital has both primary
care and non-primary care PRAs, each of which is updated as described
in Sec. 413.86(e)(3)(ii)) as of cost reporting periods beginning on or
after October 1, 2000.
For example, if the FY 2001 locality-adjusted national average PRA
for Area X is $100,000, then 70 percent of that amount is $70,000. If,
in Area X, Hospital A has a primary care FY 2001 PRA of $69,000 and a
non-primary care FY 2001 PRA of $67,000, both of Hospital A's FY 2001
PRAs are replaced by the $70,000 floor. Thus, $70,000 is the amount
that would be used to determine Hospital A's direct GME payments for
both primary care and
[[Page 26311]]
non-primary care FTEs in its cost reporting period beginning in FY
2001, and the $70,000 PRA would be updated for inflation by the CPI-U
in subsequent years.
Ceiling--For cost reporting periods beginning on or after
October 1, 2000 and on or before September 30, 2005 (FY 2001 through FY
2005), a ceiling that is equal to 140 percent of each locality-adjusted
national average PRA would be calculated and compared to each
individual hospital's PRA. If the hospital's PRA is greater than 140
percent of the locality-adjusted national average PRA, the PRA would be
adjusted depending on the fiscal year as follows:
a. FY 2001
For cost reporting periods beginning in FY 2001, each hospital's
PRA from the preceding cost reporting period (that is, FY 2000) is
compared to the FY 2001 locality-adjusted national average PRA. If the
individual hospital's FY 2000 PRA exceeds 140 percent of the FY 2001
locality-adjusted national average PRA, the PRA is frozen at the FY
2000 PRA, and is not updated in FY 2001 by the CPI-U factor, subject to
the limitation in section IV.G.2.d. of this preamble.
For example, if the FY 2001 locality-adjusted national average PRA
``ceiling'' for Area Y is $140,000 (that is, 140 percent of $100,000,
the hypothetical locality-adjusted national average PRA), and if, in
this area, Hospital B has a FY 2000 PRA of $140,001, then for FY 2001,
Hospital B's PRA is frozen at $140,001 and is not updated by the CPI-U
for FY 2001.
b. FY 2002
For cost reporting periods beginning in FY 2002, the methodology
used to calculate each hospital's individual PRA would be the same as
described in section IV.G.2.a. above for FY 2001. Each hospital's PRA
from the preceding cost reporting period (that is, FY 2001) is compared
to the FY 2002 locality-adjusted national average PRA. If the
individual hospital's FY 2001 PRA exceeds 140 percent of the FY 2002
locality-adjusted national average PRA, the PRA is frozen at the FY
2001 PRA, and is not updated in FY 2002 by the CPI-U factor, subject to
the limitation in section IV.G.2.d. of this preamble.
c. FY 2003, FY 2004, and FY 2005
For cost reporting periods beginning in FY 2003, FY 2004, and FY
2005, if the hospital's PRA for the previous cost reporting period is
greater than 140 percent of the locality-adjusted national average PRA
for that same previous cost reporting period (for example, for the cost
reporting period beginning in FY 2003, compare the hospital's PRA from
the FY 2002 cost reporting period to the locality-adjusted national
average PRA from FY 2002), then, subject to the limitation in section
IV.G.2.d. of this preamble, the hospital's PRA is updated in accordance
with section 1886(h)(2)(D)(i) of the Act, except that the CPI-U applied
is reduced (but not below zero) by 2 percentage points.
For example, for purposes of Hospital A's FY 2003 cost report,
Hospital A's PRA for FY 2002 is compared to Hospital A's locality-
adjusted national average PRA ceiling for FY 2002. If, in FY 2002,
Hospital A's PRA is $100,001 and the FY 2002 locality-adjusted national
average PRA ceiling is $100,000, then for FY 2003, Hospital A's PRA is
updated with the FY 2003 CPI-U minus 2 percent. If, in this scenario,
the CPI-U for FY 2003 is 1.024, Hospital A would update its PRA in FY
2003 by 1.004 (the CPI-U minus 2 percentage points). However, if the
CPI-U factor for FY 2003 is 1.01 and subtracting 2 percentage points of
1.01 yields 0.99, the PRA for FY 2003 would not be updated, and would
remain $100,001.
We note that, while the language in section 1886(h)(2)(D)(iv)(I)
and in section 1886(h)(2)(D)(iv)(II) of the Act (the sections that
describe the adjustments to PRAs for hospitals that exceed 140 percent
of the locality-adjusted national average PRA) is very similar, the
language does differ. Section 1886(h)(2)(D)(iv)(I) of the Act states
that for a cost reporting period beginning during FY 2000 or FY 2001,
``if the approved FTE resident amount for a hospital for the preceding
cost reporting period exceeds 140 percent of the locality-adjusted
national average per resident amount * * * for that hospital and period
* * *, the approved FTE resident amount for the period involved shall
be the same as the approved FTE resident amount for such preceding cost
reporting period.'' (Emphasis added.) Section 1886(h)(2)(D)(iv)(II) of
the Act states that for a cost reporting period beginning during FY
2003, FY 2004, or FY 2005, ``if the approved FTE resident amount for a
hospital for the preceding cost reporting period exceeds 140 percent of
the locality-adjusted national average per resident amount * * * for
that hospital and preceding period, the approved FTE resident amount
for the period involved shall be updated * * . *.'' (Emphasis added.)
Accordingly, for FYs 2001 and 2002, a hospital's PRA from the previous
cost reporting period is compared to the locality-adjusted national
average PRA of the current cost reporting period. For FY 2003, FY 2004,
or FY 2005, a hospital's PRA from the previous cost reporting period is
compared to the locality-adjusted national average PRA from the
previous cost reporting period.
d. General Rule for Hospitals That Exceed the Ceiling
For cost reporting periods beginning in FY 2001 through FY 2005, if
a hospital's PRA exceeds 140 percent of the locality-adjusted national
average PRA and it is adjusted under any of the above criteria, the
current year PRA cannot be reduced below 140 percent of the locality-
adjusted national average PRA.
For example, to determine the PRA of Hospital A, in FY 2003,
Hospital A had a FY 2002 PRA of $100,001 and the FY 2002 locality-
adjusted national average PRA ceiling is $100,000. For FY 2003,
applying an update of the CPI-U factor minus 2 percentage points (for
example, 1.024 - .02 = 1.004 would yield an updated PRA of $100,401)
while the locality-adjusted national average PRA (before calculation of
the ceiling) is updated for FY 2003 with the full CPI-U factor (1.024)
so that the ceiling of $100,000 is now increased to $102,400 (that is,
$100,000 x 1.024 = $102,400). Therefore, applying the adjustment
would result in a PRA of $100,401, which is under the ceiling of
$102,400 for FY 2003. In this situation, for purposes of the FY 2003
cost report, Hospital A's PRA equals $102,400.
We note that if the hospital's PRA does not exceed 140 percent of
the locality-adjusted national average PRA, the PRA is updated by the
CPI-U for the respective fiscal year. If a hospital's PRA is updated by
the CPI-U because it is less than 140 percent of the locality-adjusted
national average PRA for a respective fiscal year, and once updated,
the PRA exceeds the 140 percent ceiling for the respective fiscal year,
the updated PRA would still be used to calculate the hospital's direct
GME payments. Whether a hospital's PRA exceeds the ceiling is
determined before the application of the update factors; if a
hospital's PRA exceeds the ceiling only because of the application of
the update factors, the hospital's PRA would retain the CPI-U factors.
For example, if, in FY 2001, the locality-adjusted national average
PRA ceiling for Area Y is $140,000, and if, in this area, Hospital B
has a FY 2000 PRA of $139,000, then for FY 2001, Hospital B's PRA is
updated for inflation for FY 2001 because the PRA is below the ceiling.
However, once the update factors are applied, Hospital B's PRA is now
$142,000 (that is, above the $140,000 ceiling). In this scenario,
[[Page 26312]]
Hospital B's inflated PRA would be used to calculate its direct GME
payments because Hospital B has only exceeded the ceiling after the
application of the inflation factors.
PRAs greater than or equal to the floor and less than or
equal to the ceiling. For cost reporting periods beginning in FY 2001
through FY 2005, if a hospital's PRA is greater than or equal to 70
percent and less than or equal to 140 percent of the locality-adjusted
national average PRA, the hospital's PRA is updated using the existing
methodology specified in Sec. 413.86(e)(3)(i).
For cost reporting periods beginning in FY 2006 and thereafter, a
hospital's PRA for its preceding cost reporting period would be updated
using the existing methodology specified in Sec. 413.86(e)(3)(i).
We are proposing to redesignate the existing Sec. 413.86(e)(4) as
Sec. 413.86(e)(5) and add the rules implementing section 1886(h)(2) of
the Act, as amended by section 311 of Public Law 106-113, in the
vacated Sec. 413.86(e)(4). Because we are proposing to apply the
methodology for updating the PRA for inflation that is described in
existing Sec. 413.86(e)(3), we also are proposing to amend
Sec. 413.86(e)(3) to make those rules applicable to the cost reporting
periods (FY 2001 through FY 2005) specified in the proposed
Sec. 413.86(e)(4), and in subsequent cost reporting periods.
In addition, we are proposing to make a conforming change by
amending proposed redesignated Sec. 413.86(e)(5) to account for
situations in which hospitals do not have a 1984 base period and
establish a PRA in a cost reporting period beginning on or after
October 1, 2000. We believe there are two factors to consider when a
new teaching hospital establishes its PRA under proposed redesignated
Sec. 413.86(e)(5). First, for example, when calculating the weighted
mean value of PRAs of hospitals located in the same geographic area or
the weighted mean of the PRAs in the hospital's census region (as
specified in Sec. 412.62(f)(1)(i)), the hospitals' PRAs used to
calculate the weighted mean values are subject to the provisions of
proposed Sec. 413.86(e)(4), the national average PRA methodology.
Second, the resulting PRA established under proposed redesignated
Sec. 413.86(e)(5) also would be subject to the national average PRA
methodology specified in proposed Sec. 413.86(e)(4).
We also are making a clarifying amendment to the proposed
redesignated Sec. 413.86(e)(5)(i)(B) to account for an oversight in the
regulations text when we amended our regulations on August 29, 1997 (62
FR 46004). In the preamble of the August 29, 1997 final rule, in
setting forth our policy on the determination of per resident amounts
for hospitals that did not have residents in the 1984 GME base period,
we stated that we would use a ``weighted'' average of the per resident
amounts for hospitals located in the same geographic area. However, we
inadvertently did not include a specific reference to ``weighted'' in
the language of the regulation text. Therefore, we are proposing to
specify that the ``weighted mean value'' of per resident amounts of
hospitals located in the same geographic wage area is used for
determining the base period for certain hospitals for cost reporting
periods beginning in the same fiscal years.
H. Outliers: Miscellaneous Change
Under the provisions of section 1886(d)(5)(A)(i) of the Act, the
Secretary does not pay for day outliers for discharges from hospitals
paid under the prospective payment systems that occur after September
30, 1997. We are proposing to make a conforming change to Sec. 412.2(a)
by deleting the reference to an additional payment for both inpatient
operating and inpatient capital-related costs for cases that have an
atypically long length of stay.
V. The Prospective Payment System for Capital-Related Costs: The
Last Year of the Transition Period
Since FY 2001 is the last year of the 10-year transition period
established to phase in the prospective payment system for hospital
capital-related costs, for the readers' benefit, we are providing a
summary of the statutory basis for the system, the development and
evolution of the system, the methodology used to determine capital-
related payments to hospitals, and the policy for providing exceptions
payments during the transition period.
Section 1886(g) of the Act requires the Secretary to pay for the
capital-related costs of inpatient hospital services ``in accordance
with a prospective payment system established by the Secretary.'' Under
the statute, the Secretary has broad authority in establishing and
implementing the capital prospective payment system. We initially
implemented the capital prospective payment system in the August 30,
1991 final rule (56 FR 43409), in which we established a 10-year
transition period to change the payment methodology for Medicare
inpatient capital-related costs from a reasonable cost-based
methodology to a prospective methodology (based fully on the Federal
rate).
The 10-year transition period established to phase in the
prospective payment system for capital-related costs is effective for
discharges occurring on or after October 1, 1991 (FY 1992) through
discharges occurring on or before September 30, 2001. For FY 2001,
hospitals paid under the fully prospective transition period
methodology will be paid 100 percent of the Federal rate and zero
percent of their hospital-specific rate, while hospitals paid under the
hold-harmless transition period methodology will be paid 85 percent of
their allowable old capital costs (100 percent for sole community
hospitals) plus a payment for new capital costs based on the Federal
rate. Fiscal year 2001 is the final year of the capital transition
period and, therefore, the last fiscal year for which a portion of a
hold-harmless hospital's capital costs per discharge will be paid on a
cost basis (except for new hospitals). Also, since fully prospective
hospitals will be paid based on 100 percent of the Federal rate and
zero percent of their hospital-specific rate, we will not determine a
hospital-specific rate update for FY 2001 in section IV of the Addendum
of this proposed rule. Beginning with discharges occurring on or after
October 1, 2001 (FY 2002), payment for capital-related costs will be
determined based solely on the capital standard Federal rate. Hospitals
that were defined as ``Anew'' for the purposes of capital payments
during the transition period (Sec. 412.30(b)) will continue to be paid
according to the applicable payment methodology outlined in
Sec. 412.324.
Generally, during the transition period, inpatient capital-related
costs are paid on a per discharge basis, and the amount of payment
depends on the relationship between the hospital-specific rate and the
Federal rate during the hospital's base year. A hospital with a base
year hospital-specific rate lower than the Federal rate is paid under
the fully prospective payment methodology during the transition period.
This method is based on a dynamic blend percentage of the hospital's
hospital-specific rate and the applicable Federal rate for each year
during the transition period. A hospital with a base period hospital-
specific rate greater than the Federal rate is paid under the hold-
harmless payment methodology during the transition period. A hospital
paid under the hold-harmless payment methodology receives the higher of
(1) a blended payment of 85 percent of reasonable cost for old capital
plus an amount for new capital based on a portion of the Federal rate
or (2) a
[[Page 26313]]
payment based on 100 percent of the adjusted Federal rate. The amount
recognized as old capital is generally limited to the allowable
Medicare capital-related costs that were in use for patient care as of
December 31, 1990. Under limited circumstances, capital-related costs
for assets obligated as of December 31, 1990, but put in use for
patient care after December 31, 1990, also may be recognized as old
capital if certain conditions are met. These costs are known as
obligated capital costs. New capital costs are generally defined as
allowable Medicare capital-related costs for assets put in use for
patient care after December 31, 1990. Beginning in FY 2001, at the
conclusion of the transition period for the capital prospective payment
system, capital payments will be based solely on the Federal rate for
the vast majority of hospitals.
During the transition period, new hospitals are exempt from the
prospective payment system for capital-related costs for their first 2
years of operation and are paid 85 percent of their reasonable cost
during that period. The hospital's first 12-month cost reporting period
(or combination of cost reporting periods covering at least 12 months)
beginning at least 1 year after the hospital accepts its first patient
serves as the hospital's base period. Those base year costs qualify as
old capital and are used to establish its hospital-specific rate used
to determine its payment methodology under the capital prospective
payment system. Effective with the third year of operation, the
hospital is paid under either the fully prospective methodology or the
hold-harmless methodology. If the fully prospective methodology is
applicable, the hospital is paid using the appropriate transition blend
of its hospital-specific rate and the Federal rate for that fiscal year
until the conclusion of the transition period, at which time the
hospital will be paid based on 100 percent of the Federal rate. If the
hold-harmless methodology is applicable, the hospital will receive
hold-harmless payment for assets in use during the base period for 8
years, which may extend beyond the transition period.
The basic methodology for determining capital prospective payments
based on the Federal rate is set forth in Sec. 412.312. For the purpose
of calculating payments for each discharge, the standard Federal rate
is adjusted as follows:
(Standard Federal Rate) x (DRG Weight) x (GAF) x (Large Urban
Add-on, if applicable) x (COLA Adjustment for Hospitals Located in
Alaska and Hawaii) x (1 + DSH Adjustment Factor + IME Adjustment
Factor).
Hospitals may also receive outlier payments for those cases that
qualify under the thresholds established for each fiscal year. Section
412.312(c) provides for a single set of thresholds to identify outlier
cases for both inpatient operating and inpatient capital-related
payments.
During the capital prospective payment system transition period, a
hospital may also receive an additional payment under an exceptions
process if its total inpatient capital-related payments are less than a
minimum percentage of its allowable Medicare inpatient capital-related
costs for qualifying classes of hospitals. For up to 10 years after the
conclusion of the transition period, a hospital may also receive an
additional payment under a special exceptions process if certain
qualifying criteria are met and its total inpatient capital-related
payments are less than the 70 percent minimum percentage of its
allowable Medicare inpatient capital-related costs.
In accordance with section 1886(d)(9)(A) of the Act, under the
prospective payment system for inpatient operating costs, hospitals
located in Puerto Rico are paid for operating costs under a special
payment formula. Prior to FY 1998, hospitals in Puerto Rico were paid a
blended rate that consisted of 75 percent of the applicable
standardized amount specific to Puerto Rico hospitals and 25 percent of
the applicable national average standardized amount. However, effective
October 1, 1997, under amendments to the Act enacted by section 4406 of
Public Law 105-33, operating payments to hospitals in Puerto Rico are
based on a blend of 50 percent of the applicable standardized amount
specific to Puerto Rico hospitals and 50 percent of the applicable
national average standardized amount. In conjunction with this change
to the operating blend percentage, effective with discharges on or
after October 1, 1997, we compute capital payments to hospitals in
Puerto Rico based on a blend of 50 percent of the Puerto Rico rate and
50 percent of the Federal rate. Section 412.374 provides for the use of
this blended payment system for payments to Puerto Rico hospitals under
the prospective payment system for inpatient capital-related costs.
Accordingly, for capital-related costs, we compute a separate payment
rate specific to Puerto Rico hospitals using the same methodology used
to compute the national Federal rate for capital-related costs.
In the August 30, 1991 final rule, we established a capital
exceptions policy, which provides for exceptions payments during the
transition period (Sec. 412.348). Section 412.348 provides that, during
the transition period, a hospital may receive additional payment under
an exceptions process when its regular payments are less than a minimum
percentage, established by class of hospital, of the hospital's
reasonable capital-related costs. The amount of the exceptions payment
is the difference between the hospital's minimum payment level and the
payments the hospital would receive under the capital prospective
payment system in the absence of an exceptions payment. The comparison
is made on a cumulative basis for all cost reporting periods during
which the hospital is subject to the capital prospective payment
transition rules. The minimum payment percentages for regular capital
exceptions payments by class of hospitals for FY 2001 are:
For sole community hospitals, 90 percent;
For urban hospitals with at least 100 beds that have a
disproportionate share patient percentage of at least 20.2 percent or
that received more than 30 percent of their net inpatient care revenues
from State or local governments for indigent care, 80 percent;
For all other hospitals, 70 percent of the hospital's
reasonable inpatient capital-related costs.
The provision for regular exceptions payments will expire at the
end of the transition period. Payments will no longer be adjusted to
reflect regular exceptions payments at Sec. 412.348. Accordingly, for
cost reporting periods beginning on or after October 1, 2001, hospitals
will receive only the per discharge payment based on the Federal rate
for capital costs (plus any applicable DSH or IME and outlier
adjustments) unless a hospital qualifies for a special exceptions
payment under Sec. 412.348(g).
Under the special exceptions provision at Sec. 412.348(g), an
additional payment may be made for up to 10 years beyond the end of the
capital prospective payment system transition period for eligible
hospitals. The capital special exceptions process is budget neutral;
that is, even after the end of the capital prospective payment system
transition, we will continue to make an adjustment to the capital
Federal rate in a budget neutral manner to pay for exceptions, as long
as an exceptions policy is in force. Currently, the limited
[[Page 26314]]
special exceptions policy will allow for exceptions payments for 10
years beyond the conclusion of the 10-year capital transition period or
through September 30, 2011.
VI. Proposed Changes for Hospitals and Hospital Units Excluded From
the Prospective Payment System
A. Limits on and Adjustments to the Target Amounts for Excluded
Hospitals and Units (Sec. 413.40(b)(4) and (g))
1. Updated Caps
Section 1886(b)(3) of the Act (as amended by section 4414 of Public
Law 105-33) establishes caps on the target amounts for certain existing
excluded hospitals and units for cost reporting periods beginning on or
after October 1, 1997 through September 30, 2002. The caps on the
target amounts apply to the following three classes of excluded
hospitals: Psychiatric hospitals and units, rehabilitation hospitals
and units, and long-term care hospitals.
A discussion of how the caps on the target amounts were calculated
can be found in the August 29, 1997 final rule with comment period (62
FR 46018); the May 12, 1998 final rule (63 FR 26344); the July 31, 1998
final rule (63 FR 41000), and the July 30, 1999 final rule (64 FR
41529). For purposes of calculating the caps on existing facilities,
the statute required us to calculate the national 75th percentile of
the target amounts for each class of hospital (psychiatric,
rehabilitation, or long-term care) for cost reporting periods ending
during FY 1996. Under section 1886(b)(3)(H)(iii) of the Act, the
resulting amounts are updated by the market basket percentage to the
applicable fiscal year. However, section 121 of Public Law 106-113
amended section 1886(b)(3)(H) of the Act to provide for an appropriate
wage adjustment to the caps on the target amounts for psychiatric
hospitals and units, rehabilitation hospitals and units, and long-term
care hospitals, effective for cost reporting periods beginning on or
after October 1, 1999, through September 30, 2002. We intend to publish
an interim final rule with comment period implementing this provision
for cost reporting periods beginning on or after October 1, 1999 and
before October 1, 2000. This proposed rule addresses the wage
adjustment to the caps for cost reporting periods beginning on or after
October 1, 2000.
For purposes of calculating the caps, section 1886(b)(3)(H)(ii) of
the Act requires the Secretary to first ``estimate the 75th percentile
of the target amounts for such hospitals within such class for cost
reporting periods ending during fiscal year 1996.'' Furthermore,
section 1886(b)(3)(H)(iii), as added by Public Law 106-113, requires
the Secretary to provide for ``an appropriate adjustment to the labor-
related portion of the amount determined under such subparagraph to
take into account the differences between average wage-related costs in
the area of the hospital and the national average of such costs within
the same class of hospital.''
Consistent with the broad authority conferred on the Secretary by
section 1886(b)(3)(H)(iii) of the Act to determine the appropriate wage
adjustment, we propose to account for differences in wage-related costs
by adjusting the caps to account for the following:
First, we would adjust each hospital's target amount to account for
area differences in wage-related costs. For each class of hospitals
(psychiatric, rehabilitation, and long-term care), we would determine
the labor-related portion of each hospital's FY 1996 target amount by
multiplying its target amount by the actuarial estimate of the labor-
related portion of costs (or 0.71553). Similarly, we would determine
the nonlabor-related portion of each hospital's FY 1996 target amount
by multiplying its target amount by the actuarial estimate of the
nonlabor-related portion of costs (or 0.28447).
Next, we would account for wage differences among hospitals within
each class by dividing the labor-related portion of each hospital's
target amount by the hospital's FY 1998 hospital wage index under the
hospital inpatient prospective payment system (see Sec. 412.63), as
shown in Tables 4A and 4B of the August 29, 1997 final rule (62 FR
46070). Within each class, each hospital's wage-adjusted target amount
would be calculated by adding the wage-adjusted labor-related portion
of its target amount and the nonlabor-related portion of its target
amount. Then, the wage-adjusted target amounts for hospitals within
each class would be arrayed in order to determine the national 75th
percentile caps on the target amounts for each class.
This adjustment methodology for the national 75th percentile of the
target amounts is identical to the methodology we utilized for the wage
index adjustment described in the August 29, 1997 final rule (62 FR
46020) to calculate the wage-adjusted 110 percent of the national
median target amounts for new excluded hospitals and units. Again, we
recognize that wages may differ for prospective payment hospitals and
excluded hospitals, but we believe that the wage data reflect area
differences in wage-related costs. Moreover, in light of the short
timeframe for implementing this provision, we would use the wage data
for acute hospitals since they are the most feasible data source.
In the July 30, 1999 final rule (64 FR 41529), we established the
FY 2000 caps on the target amounts as follows:
Psychiatric hospitals and units: $11,110.
Rehabilitation hospitals and units: $20,129.
Long-term care hospitals: $39,712.
Therefore, based on these previously calculated caps on the target
amounts and consistent with the broad authority conferred on the
Secretary by section 1886(b)(3)(H)(iii) of the Act to determine the
appropriate wage adjustment to the caps, we have determined the labor-
related and nonlabor-related portions of the proposed caps on the
target amounts for FY 2001 using the methodology outlined above.
------------------------------------------------------------------------
Labor- Nonlabor-
Class of excluded hospital or unit related related
share share
------------------------------------------------------------------------
Psychiatric................................... $8,106 $3,223
Rehabilitation................................ 15,108 6,007
Long-Term Care................................ 29,312 11,654
------------------------------------------------------------------------
These labor-related and nonlabor-related portions of the proposed
caps on the target amounts for FY 2001 are based on the current
estimate of the market basket increase for excluded hospitals and units
for FY 2001 of 3.1 percent.
In the interim final rule with comment period that we plan to
publish, we will revise Secs. 413.40(c)(4)(i) and (c)(4)(ii) to
incorporate the changes in the formula used to determine the limitation
on the target amounts for excluded hospitals and units, as provided for
by section 121 of Public Law 106-113.
Finally, to determine payments described in Sec. 413.40(c), the cap
on the hospital's target amount per discharge is determined by adding
the hospital's nonlabor-related portion of the national 75th percentile
cap to its wage-adjusted, labor-related portion of the national 75th
percentile cap. A hospital's wage-adjusted, labor-related portion of
the target amount is calculated by multiplying the labor-related
portion of the national 75th percentile cap for the hospital's class by
the hospital's applicable wage index. For FY 2001, a hospital's
applicable wage index is the wage index under the hospital inpatient
prospective payment system (see Sec. 412.63), for cost reporting
periods beginning on or after October 1, 2000 and ending on or before
September 30,
[[Page 26315]]
2001 as shown in Tables 4A and 4B of this proposed rule. A hospital's
applicable wage index corresponds to the area in which the hospital or
unit is physically located (MSA or rural area) and is not subject to
prospective payment system hospital reclassification under section
1886(d)(10) of the Act.
2. Updated Caps for New Excluded Hospitals and Units (Sec. 413.40(f))
Section 1886(b)(7) of the Act establishes a payment methodology for
new psychiatric hospitals and units, rehabilitation hospitals and
units, and long-term care hospitals. Under the statutory methodology,
for a hospital that is within a class of hospitals specified in the
statute and that first receives payments as a hospital or unit excluded
from the prospective payment system on or after October 1, 1997, the
amount of payment will be determined as follows: For the first two 12-
month cost reporting periods, the amount of payment is the lesser of
(1) the operating costs per case; or (2) 110 percent of the national
median of target amounts for the same class of hospitals for cost
reporting periods ending during FY 1996, updated to the first cost
reporting period in which the hospital receives payments and adjusted
for differences in area wage levels.
The proposed amounts included in the following table reflect the
updated 110 percent of the wage neutral national median target amounts
for each class of excluded hospitals and units for cost reporting
periods beginning during FY 2001. These figures are updated to reflect
the projected market basket increase of 3.1 percent. For a new
provider, the labor-related share of the target amount is multiplied by
the appropriate geographic area wage index and added to the nonlabor-
related share in order to determine the per case limit on payment under
the statutory payment methodology for new providers.
------------------------------------------------------------------------
Labor- Nonlabor-
Class of excluded hospital or unit related related
share share
------------------------------------------------------------------------
Psychiatric................................... $6,592 $2,623
Rehabilitation................................ 12,964 5,154
Long-Term Care................................ 16,708 6,643
------------------------------------------------------------------------
3. Development of Prospective Payment System for Inpatient
Rehabilitation Hospitals and Units
Section 4421 of Public Law 105-33 added section 1886(j) to the Act.
Section 1886(j) of the Act mandates the phase-in of a case-mix adjusted
prospective payment system for inpatient rehabilitation services
(freestanding hospitals and units) for cost reporting periods beginning
on or after October 1, 2000 and before October 1, 2002. The prospective
payment system will be fully implemented for cost reporting periods
beginning on or after October 1, 2002. Section 1886(j) was amended by
section 125 of Public Law 106-113 to require the Secretary to use the
discharge as the payment unit under the prospective payment system for
inpatient rehabilitation services and to establish classes of patient
discharges by functional-related groups.
We will issue a separate notice of proposed rulemaking in the
Federal Register on the prospective payment system for inpatient
rehabilitation facilities. That document will discuss the requirements
in section 1886(j)(1)(A)(i) of the Act for a transition phase covering
the first two cost reporting periods under the prospective payment
system. During this transition phase, inpatient rehabilitation
facilities will receive a payment rate comprised of a blend of the
facility specific rate (the TEFRA percentage) based on the amount that
would have been paid under Part A with respect to these costs if the
prospective payment system would not be implemented and the inpatient
rehabilitation facility prospective payment rate (prospective payment
percentage). As set forth in sections 1886(j)(1)(C)(i) and (ii) of the
Act, the TEFRA percentage for a cost reporting period beginning on or
after October 1, 2000, and before October 1, 2001, is 66\2/3\ percent;
the prospective payment percentage is 33\1/3\ percent. For cost
reporting periods beginning on or after October 1, 2001 and before
October 1, 2002, the TEFRA percentage is 33\1/3\ percent and the
prospective payment percentage is 66\2/3\ percent.
As provided in section 1886(j)(3)(A) of the Act, the prospective
payment rates will be based on the average inpatient operating and
capital costs of rehabilitation facilities and units. Payments will be
adjusted for case-mix using patient classification groups, area wages,
inflation, outlier status and any other factors the Secretary
determines necessary. We will propose to set prospective payment
amounts in effect during FY 2001 so that total payments under the
system are projected to equal 98 percent of the amount of payments that
would have been made under the current payment system. Outlier payments
in a fiscal year may not be projected or estimated to exceed 5 percent
of the total payments based on the rates for that fiscal year.
4. Continuous Improvement Bonus Payment
Under Sec. 413.40(d)(4), for cost reporting periods beginning on or
after October 1, 1997, an ``eligible'' hospital may receive continuous
improvement bonus payments in addition to its payment for inpatient
operating costs plus a percentage of the hospital's rate-of-increase
ceiling (as specified in Sec. 413.40(d)(2)). An eligible hospital is a
hospital that has been a provider excluded from the prospective payment
system for at least three full cost reporting periods prior to the
applicable period and the hospital's operating costs per discharge for
the applicable period are below the lowest of its target amount,
trended costs, or expected costs for the applicable period. Prior to
enactment of Public Law 106-113, the amount of the continuous
improvement bonus payment was equal to the lesser of--
(a) 50 percent of the amount by which operating costs were less
than the expected costs for the period; or
(b) 1 percent of the ceiling.
Section 122 of Public Law 106-113 amended section 1886(b)(2) of the
Act to provide, for cost reporting periods beginning on or after
October 1, 2000, and before September 30, 2001, for an increase in the
continuous improvement bonus payment for long-term care and psychiatric
hospitals and units. Under section 1886(b)(2) of the Act, as amended, a
hospital that is within one of these two classes of hospitals
(psychiatric hospitals or units and long-term-care hospitals) will
receive the lesser of 50 percent of the amount by which the operating
costs are less than the expected costs for the period, or the increased
percentages mandated by statute as follows:
(a) For a cost reporting period beginning on or after October 1,
2000 and before September 30, 2001, 1.5 percent of the ceiling; and
(b) For a cost reporting period beginning on or after October 1,
2001, and before September 30, 2002, 2 percent of the ceiling.
We are proposing to revise Sec. 413.40(d)(4) to incorporate this
provision of the statute.
B. Responsibility for Care of Patients in Hospitals-Within-Hospitals
(Sec. 413.40(a)(3))
Effective October 1, 1999, for hospitals-within-hospitals, we
implemented a policy that allows for a 5-percent threshold for cases in
which a patient discharged from an excluded hospital-within-a-hospital
and admitted to the host hospital was subsequently
[[Page 26316]]
readmitted to the excluded hospital-within-a-hospital. With respect to
these cases, if the excluded hospital exceeds the 5-percent threshold,
we do not include any previous discharges to the prospective payment
hospital in calculating the excluded hospital's cost per discharge.
That is, the entire stay is considered one Medicare ``discharge'' for
purposes of payments to the excluded hospital. The effect of this rule,
as explained more fully in the May 7, 1999 proposed rule (64 FR 24716)
and in the July 30, 1999 final rule (64 FR 41490), is to prevent
inappropriate Medicare payment to hospitals having a large number of
such stays.
In the existing regulations at Sec. 413.40(a)(3), we state that the
5-percent threshold is determined based on the total number of
discharges from the hospital-within-a-hospital. We have received
questions as to whether, in determining whether the threshold is met,
we consider Medicare patients only or all patients (Medicare and non-
Medicare). To avoid any further misunderstanding, we are clarifying the
definition of ``ceiling'' in Sec. 413.40(a)(3) by specifying that the
5-percent threshold is based on the Medicare inpatients discharged from
the hospital-within-a-hospital in a particular cost reporting period,
not on total Medicare and non-Medicare inpatient discharges.
C. Critical Access Hospitals (CAHs)
1. Election of Payment Method (Sec. 413.70)
Section 1834(g) of the Act, as in effect before enactment of Public
Law 106-113, provided that the amount of payment for outpatient CAH
services is the reasonable costs of the CAH in providing such services.
However, the reasonable costs of the CAH's services to outpatients
included only the CAH's costs of providing facility services, and did
not include any payment for professional services. Physicians and other
practitioners who furnished professional services to CAH outpatients
billed the Part B carrier for these services and were paid under the
physician fee schedule in accordance with the provisions of section
1848 of the Act.
Section 403(d) of Public Law 106-113 amended section 1834(g) of the
Act to permit the CAH to elect to be paid for its outpatient services
under another option. CAHs making this election would be paid amounts
equal to the sum of the following, less the amount that the hospital
may charge as described in section 1866(a)(2)(A) of the Act (that is,
Part A and Part B deductibles and coinsurance):
(1) For facility services, not including any services for which
payment may be made as outpatient professional services, the reasonable
costs of the CAH in providing the services; and
(2) For professional services otherwise included within outpatient
CAH services, the amounts that would otherwise be paid under Medicare
if the services were not included in outpatient CAH services.
Section 403(d) of Public Law 106-113 added section 1834(g)(3) to
the Act to further specify that payment amounts under this election are
be determined without regard to the amount of the customary or other
charge.
The amendment made by section 403(d) is effective for cost
reporting periods beginning on or after October 1, 2000.
We are proposing to revise Sec. 413.70 to incorporate the
provisions of section 403(d) of Public Law 106-113. The existing
Sec. 413.70 specifies a single set of reasonable cost basis payment
rules applicable to both inpatient and outpatient services furnished by
CAHs. As section 403(d) of Public Law 106-113 provides that CAHs may
elect to be paid on a reasonable cost basis for facility services and
on a fee schedule basis for professional services, we are proposing to
revise the section to allow for separate payment rules for CAH
inpatient and outpatient services.
We are proposing to place the provisions of existing Sec. 413.70(a)
and (b) that relate to payment on a reasonable cost basis for inpatient
services furnished by a CAH under proposed Sec. 413.70(a). Proposed
Sec. 413.70(a)(2) would also state that payment to a CAH for inpatient
services does not include professional services to CAH inpatients and
is subject to the Part A hospital deductible and coinsurance determined
under 42 CFR part 409, Subpart G.
We are proposing to include under Sec. 413.70(b) the payment rules
for outpatient services furnished by CAHs, including the option for
CAHs to elect to be paid on the basis of reasonable costs for facility
services and on the basis of the physician fee schedule for
professional services. Under proposed Sec. 413.70(b)(2), we would
retain the existing provision that unless the CAH elects the option
provided for under section 403 of Public Law 106-113, payment for
outpatient CAH services is on a reasonable cost basis, as determined in
accordance with section 1861(v)(1)(A) of the Act and the applicable
principles of cost reimbursement in Parts 413 and 415 (except for
certain payment principles that do not apply; that is, the lesser of
costs or charges, RCE limits, any type of reduction to operating or
capital costs under Sec. 413.124 or Sec. 413.130(j)(7), and blended
payment amounts for ambulatory surgical center services, radiology
services, and other diagnostic services.
Under proposed Sec. 413.70(b)(3), we would specify that any CAH
that elects to be paid under the optional method must make an annual
request in writing, and deliver the request for the election to the
fiscal intermediary at least 60 days before the start of the affected
cost reporting period. In addition, proposed Sec. 413.70(b)(3) states
that if a CAH elects payment under this method, payment to the CAH for
each outpatient visit will be the sum of the following two amounts:
For facility services, not including any outpatient
professional services for which payment may be made on a fee schedule
basis, the amount would be the reasonable costs of the services as
determined in accordance with applicable principles of cost
reimbursement in 42 CFR Parts 413 and 415, except for certain payment
principles that would not apply as specified above; and
For professional services, otherwise payable to the
physician or other practitioner on a fee schedule basis, the amounts
would be those amounts that would otherwise be paid for the services if
the CAH had not elected payment under this method.
We would also specify that payment to a CAH for outpatient services
would be subject to the Part B deductible and coinsurance amounts, as
determined under Secs. 410.152, 410.160, and 410.161. Final payment to
the CAH for its facility services to inpatients and outpatients
furnished during a cost reporting would be based on a cost report for
that period, as required under Sec. 413.20(b).
2. Condition of Participation: Organ, Tissue, and Eye Procurement
(Sec. 485.643)
Sections 1820(c)(2)(B) and 1861(mm) of the Act set forth the
criteria for designating a CAH. Under this authority, the Secretary has
established in regulations the minimum requirements a CAH must meet to
participate in Medicare (42 CFR part 485, Subpart F).
Section 1905(a) of the Act provides that Medicaid payments may be
made for any other medical care, and any other type of remedial care
recognized under State law, specified by the Secretary. The Secretary
has specified CAH services as Medicaid services in regulations,
specifically, the regulations at 42 CFR 440.170(g)(1)(i), and defined
CAH services under Medicaid as those services furnished by a provider
[[Page 26317]]
meeting the Medicare conditions of participation (CoP).
Section 1138 of the Act provides that a CAH participating in
Medicare must establish written protocols to identify potential organ
donors that: (1) Assures that potential donors and their families are
made aware of the full range of options for organ or tissue donation as
well as their rights to decline donation; (2) encourage discretion and
sensitivity with respect to the circumstances, views, and beliefs of
those families; and (3) require that an organ procurement agency
designated by the Secretary be notified of potential organ donors.
On June 22, 1998, as part of the Medicare hospital conditions of
participation under Part 482, subpart C, we added to the regulations at
Sec. 482.45, a condition that specifically addressed organ, tissue, and
eye procurement. However, Part 482 does not apply to CAHs, as CAHs are
a distinct type of provider with separate CoP under Part 485.
Therefore, we are proposing to add a CoP for organ, tissue, and eye
procurement for CAHs at a new Sec. 485.643 that generally parallels the
CoP at Sec. 482.45 for all Medicare hospitals with respect to the
statutory requirement in section 1138 of the Act concerning organ
donation. CAHs are not full service hospitals and therefore are not
equipped to perform organ transplantations. Therefore, we are not
including the standard applicable to Medicare hospitals that CAHs must
be a member of the Organ Procurement and Transplantation Network
(OPTN), abide by its rules and provide organ transplant-related data to
the OPTN, the Scientific Registry, organ procurement agencies, or
directly to the Department on request of the Secretary.
The proposed CoP for CAHs includes several requirements designed to
increase organ donation. One of these requirements is that a CAH must
have an agreement with the Organ Procurement Organization (OPO)
designated by the Secretary, under which the CAH will contact the OPO
in a timely manner about individuals who die or whose death is
imminent. The OPO will then determine the individual's medical
suitability for donation. In addition, the CAH must have an agreement
with at least one tissue bank and at least one eye bank to cooperate in
the retrieval, processing, preservation, storage, and distribution of
tissues and eyes, as long as the agreement does not interfere with
organ donation. The proposed CoP would require a CAH to ensure, in
collaboration with the OPO with which it has an agreement, that the
family of every potential donor is informed of its option to either
donate or not donate organs, tissues, or eyes. The CAH may choose to
have OPO staff perform this function, have CAH and OPO staff jointly
perform this function, or rely exclusively on CAH staff. Research
indicates that consent to organ donation is highest when the formal
request is made by OPO staff or by OPO staff and hospital staff
together. While we require collaboration, we also recognize that CAH
staff may wish to perform this function and may do so when properly
trained. Moreover, the CoP would require the CAH to ensure that CAH
employees who initiate a request for donation to the family of a
potential donor have been trained as designated requestors.
Finally, the CoP would require the CAH to work with the OPO and at
least one tissue bank and one eye bank in educating staff on donation
issues, reviewing death records to improve identification of potential
donors, and maintaining potential donors while necessary testing and
placement of organs and tissues is underway.
We are sensitive to the possible burden this proposed CoP may place
on CAHs. Therefore, we are particularly interested in comments and
information concerning the following requirements: (1) Developing
written protocols for donations; (2) developing agreements with OPOs,
tissue banks, and eye banks; (3) referring all deaths to the OPO; (4)
working cooperatively with the designated OPO, tissue bank, and eye
bank in educating staff on donation issues, reviewing death records,
and maintaining potential donors. We note that the proposed requirement
allow some degree of flexibility for the CAH. For example, the CAH
would have the option of using an OPO-approved education program to
train its own employees as routine requestors or deferring requesting
services to the OPO, the tissue bank, or the eye bank to provide
requestors.
VII. MedPAC Recommendations
We have reviewed the March 1, 2000 report submitted by MedPAC to
Congress and have given it careful consideration in conjunction with
the proposals set forth in this document. MedPAC's recommendations and
our responses are set forth below.
We note that MedPAC's March 1, 2000 report did not contain a
recommendation concerning the update factors for inpatient hospital
operating costs under the prospective payment system or for hospitals
and hospital units excluded from the prospective payment system.
However, at its April 13, 2000 public meeting, MedPAC announced that it
was recommending a combined update of between 3.5 percent and 4.0
percent for operating and capital-related payments for FY 2001. This
recommendation is higher than the current law amount as prescribed by
Public Law 105-33 and proposed in this rule. Because of the timing of
MedPAC's announcement in relation to the publication of this proposed
rule, we intend to respond to MedPAC's recommendation in the FY 2001
final rule to be issued in August 2000 when we will have had the
opportunity to review the data analyses that substantiate MedPAC's
recommendation.
A. Combined Operating and Capital Prospective Payment Systems
(Recommendation 3J)
Recommendation: The Congress should combine prospective payment
system operating and capital payment rates to create a single
prospective rate for hospital inpatient care. This change would require
a single set of payment adjustments--in particular, for indirect
medical education and disproportionate share hospital payments--and a
single payment update.
Response: We responded to a similar comment in the July 30, 1999
final rule (64 FR 41552), the July 31, 1998 final rule (63 FR 41013),
and the September 1, 1995 final rule (60 FR 45816). In those rules, we
stated that our long-term goal was to develop a single update framework
for operating and capital prospective payments and that we would begin
development of a unified framework. However, we have not yet developed
such a single framework as the actual operating system update has been
determined by Congress through FY 2002. In the meantime, we intend to
maintain as much consistency as possible with the current operating
framework in order to facilitate the eventual development of a unified
framework. We maintain our goal of combining the update frameworks at
the end of the 10-year capital transition period (the end of FY 2001)
and may examine combining the payment systems post-transition. Because
of the similarity of the update frameworks, we believe that they could
be combined with little difficulty.
In the discussion of its recommendation, MedPAC notes that it ``is
examining broad reforms to the prospective payment system, including
DRG refinement and modifications of the graduate medical education
payment and the IME and DSH adjustments. The Commission believes that a
combined hospital prospective payment rate should be established
[[Page 26318]]
whether or not broader reforms are undertaken. However, if the Congress
acts on any or all of the Commission's recommendations, it should
consider combining operating and capital payments as part of a larger
package.''
We agree that ultimately the operating and capital prospective
payment systems should be combined into a single system. However, we
believe that, because of MedPAC's ongoing analysis and the
Administration's pending DSH report to Congress, any such unification
should occur within the context of other system refinements.
B. Continuing Postacute Transfer Payment Policy (Recommendation 3K)
Recommendation: The Commission recommends continuing the existing
policy of adjusting per case payments through an expanded transfer
policy when a short length of stay results from a portion of the
patient's care being provided in another setting.
Response: As noted in section IV.A. of this preamble, we have
undertaken (through a contract with HER) an analysis of the impact on
hospitals and hospital payments of the postacute transfer provision.
That analysis (based on preliminary data covering only approximately 6
months of discharge data) showed a minimal impact on the rate of short-
stay postacute transfers after implementation of the policy. However,
average profit margins as measured by HER declined from $2,454 prior to
implementation of the policy to $1,180 after implementation. We believe
these preliminary findings demonstrate that the postacute transfer
provision has had only marginal impact on existing practice patterns
while more closely aligning the payments to hospitals for these cases
with the costs incurred. Therefore, we agree with MedPAC's
recommendation that the policy should be continued.
C. Disproportionate Share Hospitals (DSH) (Recommendations 3L and 3M)
Recommendation: To address longstanding problems and current legal
and regulatory developments, Congress should reform the
disproportionate share adjustment to: include the costs of all poor
patients in calculating low-income shares used to distribute
disproportionate share payments, and use the same formula to distribute
payments to all hospitals covered by prospective payment.
Response: As we noted in section IV.E. of this preamble, Public Law
106-113 directed the Secretary to require subsection (d) hospitals (as
defined in section 1886(d)(1)(B) of the Act) to submit data on costs
incurred for providing inpatient and outpatient hospital services for
which the hospital is not compensated, including non-Medicare bad debt,
charity care, and charges for Medicaid and indigent care. These data
must be reported on the hospital's cost reports for cost reporting
periods beginning on or after October 1, 2001, and will provide
information that will enable MedPAC and us to evaluate potential
refinements to the DSH formula to address issues referred to by MedPAC.
Medicare fiscal intermediaries will audit these data to ensure
their accuracy and consistency. Our experience with administering the
current DSH formula leads us to believe that this auditing function
would necessarily be extensive, because the non-Medicare data that
would be collected have never before been collected and reviewed by
Medicare's fiscal intermediaries. The data would have to be determined
to be accurate and usable, and corrected if necessary.
We agree that the current statutory payment formula could be
improved, largely because of different threshold levels and different
formula parameters applicable to different groups of hospitals. We are
in the process of preparing a report to Congress on the Medicare DSH
adjustment that includes several options for amending the statutory
formula.
Recommendation: To provide further protection for the primarily
voluntary hospitals with mid-level low-income shares, the minimum
value, or threshold, for the low-income share that a hospital must have
before payment is made should be set to make 60 percent of hospitals
eligible to receive disproportionate share payments.
Response: Currently, approximately less than 40 percent of all
prospective payment system hospitals receive DSH payments. Therefore,
this recommendation would entail significant redistributions of
existing DSH payments if implemented in a budget neutral manner. We are
particularly concerned about the effect of this recommendation on
hospitals receiving substantial DSH payments currently, including major
teaching hospitals and public hospitals. The analysis by MedPAC
demonstrates that these hospitals would be negatively impacted if more
hospitals were made eligible for DSH payments.
VIII. Other Required Information
A. Requests for Data From the Public
In order to respond promptly to public requests for data related to
the prospective payment system, we have set up a process under which
commenters can gain access to the raw data on an expedited basis.
Generally, the data are available in computer tape or cartridge format;
however, some files are available on diskette as well as on the
Internet at http://www.hcfa.gov/stats/pubfiles.html. Data files are
listed below with the cost of each. Anyone wishing to purchase data
tapes, cartridges, or diskettes should submit a written request along
with a company check or money order (payable to HCFA-PUF) to cover the
cost to the following address: Health Care Financing Administration,
Public Use Files, Accounting Division, P.O. Box 7520, Baltimore,
Maryland 21207-0520, (410) 786-3691. Files on the Internet may be
downloaded without charge.
1. Expanded Modified MedPAR-Hospital (National)
The Medicare Provider Analysis and Review (MedPAR) file contains
records for 100 percent of Medicare beneficiaries using hospital
inpatient services in the United States. (The file is a Federal fiscal
year file, that is, discharges occurring October 1 through September 30
of the requested year.) The records are stripped of most data elements
that would permit identification of beneficiaries. The hospital is
identified by the 6-position Medicare billing number. The file is
available to persons qualifying under the terms of the Notice of
Proposed New Routine Uses for an Existing System of Records published
in the Federal Register on December 24, 1984 (49 FR 49941), and amended
by the July 2, 1985 notice (50 FR 27361). The national file consists of
approximately 11 million records. Under the requirements of these
notices, an agreement for use of HCFA Beneficiary Encrypted Files must
be signed by the purchaser before release of these data. For all files
requiring a signed agreement, please write or call to obtain a blank
agreement form before placing an order. Two versions of this file are
created each year. They support the following:
Notice of Proposed Rulemaking (NPRM) published in the
Federal Register. This file, scheduled to be available by the end of
April, is derived from the MedPAR file with a cutoff of 3 months after
the end of the fiscal year (December file).
Final Rule published in the Federal Register. The FY 1999
MedPAR file used for the FY 2001 final rule will be cut off 6 months
after the end of the fiscal year (March file) and is scheduled to be
available by the end of April.
Media: Tape/Cartridge
File Cost: $3,655.00 per fiscal year
[[Page 26319]]
Periods Available: FY 1988 through FY 1999
2. Expanded Modified MedPAR-Hospital (State)
The State MedPAR file contains records for 100 percent of Medicare
beneficiaries using hospital inpatient services in a particular State.
The records are stripped of most data elements that will permit
identification of beneficiaries. The hospital is identified by the 6-
position Medicare billing number. The file is available to persons
qualifying under the terms of the Notice of Proposed New Routine Uses
for an Existing System of Records published in the December 24, 1984
Federal Register notice, and amended by the July 2, 1985 notice. This
file is a subset of the Expanded Modified MedPAR-Hospital (National) as
described above. Under the requirements of these notices, an agreement
for use of HCFA Beneficiary Encrypted Files must be signed by the
purchaser before release of these data. Two versions of this file are
created each year. They support the following:
NPRM published in the Federal Register. This file,
scheduled to be available by the end of April, is derived from the
MedPAR file with a cutoff of 3 months after the end of the fiscal year
(December file).
Final Rule published in the Federal Register. The FY 1999
MedPAR file used for the FY 2001 final rule will be cut off 6 months
after the end of the fiscal year (March file) and is scheduled to be
available by the end of April.
Media: Tape/Cartridge
File Cost: $1,130.00 per State per year
Periods Available: FY 1988 through FY 1999
3. HCFA Wage Data
This file contains the hospital hours and salaries for FY 1997 used
to create the proposed FY 2001 prospective payment system wage index.
The file will be available by the beginning of February for the NPRM
and the beginning of May for the final rule.
------------------------------------------------------------------------
Processing year Wage data year PPS fiscal year
------------------------------------------------------------------------
2000 1997 2001
1999 1996 2000
1998 1995 1999
1997 1994 1998
1996 1993 1997
1995 1992 1996
1994 1991 1995
1993 1990 1994
1992 1989 1993
1991 1988 1992
------------------------------------------------------------------------
These files support the following:
NPRM published in the Federal Register.
Final Rule published in the Federal Register.
Media: Diskette/most recent year on the Internet
File Cost: $165.00 per year
Periods Available: FY 2001 PPS Update
4. HCFA Hospital Wages Indices (Formerly: Urban and Rural Wage Index
Values Only)
This file contains a history of all wage indices since October 1,
1983.
Media: Diskette/most recent year on the Internet
File Cost: $165.00 per year
Periods Available: FY 2001 PPS Update
5. PPS SSA/FIPS MSA State and County Crosswalk
This file contains a crosswalk of State and county codes used by
the Social Security Administration (SSA) and the Federal Information
Processing Standards (FIPS), county name, and a historical list of
Metropolitan Statistical Area (MSA).
Media: Diskette/Internet
File Cost: $165.00 per year
Periods Available: FY 2001 PPS Update
6. Reclassified Hospitals New Wage Index (Formerly: Reclassified
Hospitals by Provider Only)
This file contains a list of hospitals that were reclassified for
the purpose of assigning a new wage index. Two versions of these files
are created each year. They support the following:
NPRM published in the Federal Register.
Final Rule published in the Federal Register.
Media: Diskette/Internet
File Cost: $165.00 per year
Periods Available: FY 2001 PPS Update
7. PPS-IV to PPS-XII Minimum Data Set
The Minimum Data Set contains cost, statistical, financial, and
other information from Medicare hospital cost reports. The data set
includes only the most current cost report (as submitted, final
settled, or reopened) submitted for a Medicare participating hospital
by the Medicare fiscal intermediary to HCFA. This data set is updated
at the end of each calendar quarter and is available on the last day of
the following month.
Media: Tape/Cartridge
------------------------------------------------------------------------
Periods
beginning and before
on or after
------------------------------------------------------------------------
PPS-IV........................................ 10/01/86 10/01/87
PPS-V......................................... 10/01/87 10/01/88
PPS-VI........................................ 10/01/88 10/01/89
PPS-VII....................................... 10/01/89 10/01/90
PPS-VIII...................................... 10/01/90 10/01/91
PPS-IX........................................ 10/01/91 10/01/92
PPS-X......................................... 10/01/92 10/01/93
PPS-XI........................................ 10/01/93 10/01/94
PPS-XIII...................................... 10/01/94 10/01/95
------------------------------------------------------------------------
(Note: The PPS-XIII, PPS-XIV, and PPS-XV Minimum Data Sets are part of
the PPS-XIII, PPS-XIV, and PPS-XV Hospital Date Set Files).
File Cost: $770.00 per year
8. PPS-IX to PPS-XII Capital Data Set
The Capital Data Set contains selected data for capital-related
costs, interest expense and related information and complete balance
sheet data from the Medicare hospital cost report. The data set
includes only the most current cost report (as submitted, final settled
or reopened) submitted for a Medicare certified hospital by the
Medicare fiscal intermediary to HCFA. This data set is updated at the
end of each calendar quarter and is available on the last day of the
following month.
Media: Tape/Cartridge
------------------------------------------------------------------------
Periods
beginning and before
on or after
------------------------------------------------------------------------
PPS-IX........................................ 10/01/91 10/01/92
PPS-X......................................... 10/01/92 10/01/93
PPS-XI........................................ 10/01/93 10/01/94
PPS-XII....................................... 10/01/94 10/01/95
------------------------------------------------------------------------
(Note: The PPS-XIII, PPS-XIV, and PPS-XV Capital Data Sets are part of
the PPS-XIII, PPS-XIV, PPS-XV Hospital Data Set files.)
File Cost: $770.00 per year
9. PPS-XIII to PPS-XV Hospital Data Set
The file contains cost, statistical, financial, and other data from
the Medicare Hospital Cost Report. The data set includes only the most
current cost report (as submitted, final settled, or reopened)
submitted for a Medicare-certified hospital by the Medicare fiscal
intermediary to HCFA. The data set are updated at the end of each
calendar quarter and is available on the last day of the following
month.
Media: Diskette/Internet
File Cost: $2,500.00
[[Page 26320]]
------------------------------------------------------------------------
Periods
beginning and before
on or after
------------------------------------------------------------------------
PPS-XIII...................................... 10/01/95 10/01/96
PPS-XIV....................................... 10/01/96 10/01/97
PPS-XV........................................ 10/01/97 10/01/98
------------------------------------------------------------------------
10. Provider-Specific File
This file is a component of the PRICER program used in the fiscal
intermediary's system to compute DRG payments for individual bills. The
file contains records for all prospective payment system eligible
hospitals, including hospitals in waiver States, and data elements used
in the prospective payment system recalibration processes and related
activities. Beginning with December 1988, the individual records were
enlarged to include pass-through per diems and other elements.
Media: Diskette/Internet
File Cost: $265.00
Periods Available: FY 2001 PPS Update
11. HCFA Medicare Case-Mix Index File
This file contains the Medicare case-mix index by provider number
as published in each year's update of the Medicare hospital inpatient
prospective payment system. The case-mix index is a measure of the
costliness of cases treated by a hospital relative to the cost of the
national average of all Medicare hospital cases, using DRG weights as a
measure of relative costliness of cases. Two versions of this file are
created each year. They support the following:
NPRM published in the Federal Register.
Final rule published in the Federal Register.
Media: Diskette/most recent year on Internet
Price: $165.00 per year/per file
Periods Available: FY 1985 through FY 1999
12. DRG Relative Weights (Formerly Table 5 DRG)
This file contains a listing of DRGs, DRG narrative description,
relative weights, and geometric and arithmetic mean lengths of stay as
published in the Federal Register. The hard copy image has been copied
to diskette. There are two versions of this file as published in the
Federal Register:
NPRM.
Final rule.
Media: Diskette/Internet
File Cost: $165.00
Periods Available: FY 2001 PPS Update
13. PPS Payment Impact File
This file contains data used to estimate payments under Medicare's
hospital inpatient prospective payment systems for operating and
capital-related costs. The data are taken from various sources,
including the Provider-Specific File, Minimum Data Sets, and prior
impact files. The data set is abstracted from an internal file used for
the impact analysis of the changes to the prospective payment systems
published in the Federal Register. This file is available for release 1
month after the proposed and final rules are published in the Federal
Register.
Media: Diskette/Internet
File Cost: $165.00
Periods Available: FY 2001 PPS Update
14. AOR/BOR Tables
This file contains data used to develop the DRG relative weights.
It contains mean, maximum, minimum, standard deviation, and coefficient
of variation statistics by DRG for length of stay and standardized
charges. The BOR tables are ``Before Outliers Removed'' and the AOR is
``After Outliers Removed.'' (Outliers refers to statistical outliers,
not payment outliers.) Two versions of this file are created each year.
They support the following:
NPRM published in the Federal Register.
Final rule published in the Federal Register.
Media: Diskette/Internet
File Cost: $165.00
Periods Available: FY 2001 PPS Update
For further information concerning these data tapes, contact The
HCFA Public Use Files Hotline at (410) 786-3691.
Commenters interested in obtaining or discussing any other data
used in constructing this rule should contact Stephen Phillips at (410)
786-4531.
B. Information Collection Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues
for the sections that contain information collection requirements.
Section 412.77, Determination of the Hospital-Specific Rate for
Inpatient Operating Costs for Certain Sole Community Hospitals Based on
a Federal Fiscal Year 1996 Base Period, and 412.92, Special Treatment:
Sole Community Hospitals
Sections 412.77(a)(2) and 412.92(d)(1)(ii) state that an otherwise
eligible hospital that elects not to receive payment based on its
hospital-specific rate as determined under Sec. 412.77 must notify its
fiscal intermediary of its decision prior to the beginning of its cost
reporting period beginning on or after October 1, 2000.
We estimate that it will take each hospital that notifies its
intermediary of its election not to receive payments based on its
hospital-specific rate as determined under Sec. 412.77 an hour to draft
and send its notice. However, we are unable at this time to determine
how many hospitals will make this election and, therefore, will need to
notify their intermediaries of their decision.
Section 485.643, Condition of Participation: Organ, Tissue, and Eye
Procurement
It is important to note that because of the inherent flexibility of
this proposed regulation, the extent of the information collection
requirements is dependent upon decisions that will be made either by
the CAH or by the CAH in conjunction with the OPO or the tissue and eye
banks, or both. Thus, the paperwork burden on individual CAHs will vary
and is subject, in large part, to their decisionmaking.
The burden associated with the requirements of this section
include: (1) The requirement to maintain protocol documentation
demonstrating that the five requirements of this section have been met;
(2) the requirement for a CAH to notify an OPO, a tissue bank, or an
eye bank of any imminent or actual death; and (3) the time required for
a hospital to document and maintain OPO referral information.
We estimate that, on average, the requirement to maintain protocol
documentation demonstrating that the requirements of this section have
been met will impose one hour of burden on each CAH (on 161 CAHs) on an
annual basis (a total of 161 annual burden hours).
The CoP in this section would require CAHs to notify the OPO about
every
[[Page 26321]]
death that occurs in the CAH. The average Medicare hospital has
approximately 165 beds and 200 deaths per year. However, by statute and
regulation, CAHs may use no more than 15 beds for acute care services.
Assuming that the number of deaths in a hospital is related to the
number of acute care beds, there should be approximately 18 deaths per
year in the average CAH. We estimated that the average notification
telephone call to the OPO takes 5 minutes. Based on this estimate, a
CAH would need approximately 90 minutes per year to notify the OPO
about all deaths and imminent deaths.
Under the proposed CoP, a CAH may agree to have the OPO determine
medical suitability for tissue and eye donation or may have alternative
arrangements with a tissue bank and an eye bank. These alternative
arrangements could include the CAH's direct notification of the tissue
and eye bank of potential tissue and eye donors or direct notification
of all deaths. If a CAH chose to contact both a tissue bank and an eye
bank directly on all deaths, it would need an additional 6 hours per
year (that is, 5 minutes per call) in order to call both the tissue and
eye bank directly. Again, the impact is small, and the proposed
regulation permits the CAH to decide how this process will take place.
Note that many communities already have a one-phone call system in
place. In addition, some OPOs are also tissue banks or eye banks, or
both. A CAH that chose to use the OPO's tissue and eye bank services in
these localities would need to make only one telephone call on every
death.
We estimate that additional time would be needed by the CAH to
annotate the patient record or fill out a form regarding the
disposition of a call to the OPO or the tissue bank or the eye bank, or
both. This recordkeeping should take no more than 5 minutes per call.
Therefore, the paperwork burden associated with the call(s) would add
up to an additional 270 minutes per year per CAH.
In summary, the information collection requirements of this section
would be a range of from 3 to 9 hours per CAH, or 483 to 1,449 hours
annually nationally.
If you comment on these information collection and recordkeeping
requirements, please mail copies directly to the following addresses:
Health Care Financing Administration, Office of Information Services,
Security and Standards Group, Division of HCFA Enterprise Standards,
Room N2-14-26, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.
Attn: John Burke HCFA-1118-P; and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 3001, New Executive Office Building, Washington, DC 20503.
Attn: Allison Herron Eydt, HCFA Desk Officer.
These new information collection and recordkeeping requirements
have been submitted to the Office of Management and Budget (OMB) for
review under the authority of PRA. We have submitted a copy of the
proposed rule to OMB for its review of the information collection
requirements. These requirements will not be effective until they have
been approved by OMB.
The requirements associated with a hospital's application for a
geographic redesignation, codified in Part 412, are currently approved
by OMB under OMB approval number 0938-0573, with an expiration date of
September 30, 2002.
C. Public Comments
Because of the large number of items of correspondence we normally
receive on a proposed rule, we are not able to acknowledge or respond
to them individually. However, in preparing the final rule, we will
consider all comments concerning the provisions of this proposed rule
that we receive by the date and time specified in the DATES section of
this preamble and respond to those comments in the preamble to that
rule. We emphasize that section 1886(e)(5) of the Act requires the
final rule for FY 2001 to be published by August 1, 2000, and we will
consider only those comments that deal specifically with the matters
discussed in this proposed rule.
List of Subjects
42 CFR Part 412
Administrative practice and procedure, Health facilities, Medicare,
Puerto Rico, Reporting and recordkeeping requirements.
42 CFR Part 413
Health facilities, Kidney diseases, Medicare, Puerto Rico,
Reporting and recordkeeping requirements.
42 CFR Part 485
Grant programs--health, Health facilities, Medicaid, Medicare,
Reporting and recordkeeping requirements.
42 CFR Chapter IV is proposed to be amended as set forth below:
PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
A. Part 412 is amended as follows:
1. The authority citation for Part 412 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
2. Section 412.2 is amended by revising the last sentence of
paragraph (a) to read as follows:
Sec. 412.2 Basis of payment.
(a) Payment on a per discharge basis. * * * An additional payment
is made for both inpatient operating and inpatient capital-related
costs, in accordance with subpart F of this part, for cases that are
extraordinarily costly to treat.
* * * * *
Sec. 412.4 [Amended]
3. In Sec. 412.4(f)(3), the reference to ``Sec. 412.2(e)'' is
removed and `` 412.2(b)'' is added in its place.
4. Section 412.63 is amended by:
a. Revising paragraph (s);
b. Redesignating paragraphs (t), (u), (v), and (w) as paragraphs
(u), (v), (w), and (x) respectively; and
c. Adding a new paragraph (t), to read as follows:
Sec. 412.63 Federal rates for inpatient operating costs for fiscal
years after Federal fiscal year 1984.
* * * * *
(s) Applicable percentage change for fiscal year 2001. The
applicable percentage change for fiscal year 2001 is the percentage
increase in the market basket index for prospective payment hospitals
(as defined in Sec. 413.40(a) of this subchapter) for sole community
hospitals and the increase in the market basket index minus 1.1
percentage points for other hospitals in all areas.
(t) Applicable percentage change for fiscal year 2002. The
applicable percentage change for fiscal year 2002 is the percentage
increase in the market basket index for prospective payment hospitals
(as defined in Sec. 413.40(a) of this subchapter) minus 1.1 percentage
points for hospitals in all areas.
* * * * *
5. Section 412.73 is amended by revising paragraph (c)(12) and
adding paragraphs (c)(13), (c)(14), and (c)(15), to read as follows:
Sec. 412.73 Determination of the hospital-specific rate based on a
Federal fiscal year 1982 base period.
* * * * *
(c) Updating base-year costs * * *
(12) For Federal fiscal years 1996 through 2000. For Federal fiscal
years
[[Page 26322]]
1996 through 2000, the update factor is the applicable percentage
change for other prospective payment hospitals in each respective year
as set forth in Secs. 412.63(n) through (r).
(13) For Federal fiscal year 2001. For Federal fiscal year 2001,
the update factor is the percentage increase in the market basket index
for prospective payment hospitals (as defined in Sec. 413.40(a) of this
chapter).
(14) For Federal fiscal year 2002. For Federal fiscal year 2002,
the update factor is the percentage increase in the market basket index
for prospective payment hospitals (as defined in Sec. 413.40(a) of this
chapter) minus 1.1 percentage points.
(15) For Federal fiscal year 2003 and for subsequent years. For
Federal fiscal year 2003 and subsequent years, the update factor is the
percentage increase in the market basket index for prospective payment
hospitals (as defined in Sec. 413.40(a) of this chapter).
* * * * *
Sec. 412.75 [Amended]
6. In Sec. 412.75(d), the cross reference ``Sec. 412.73 (c)(5)
through (c)(12)'' is removed and ``Sec. 412.75(c)(15)'' is added in its
place.
Sec. 412.76 [Redesignated]
7. Section 412.76 is redesignated as a new Sec. 412.78.
8. A new Sec. 412.77 is added to read as follows:
Sec. 412.77 Determination of the hospital-specific rate for inpatient
operating costs for certain sole community hospitals based on a Federal
fiscal year 1996 base period.
(a) Applicability. (1) This section applies to a hospital that has
been designated as a sole community hospital, as described in
Sec. 412.72, that received payment for its cost reporting period
beginning during 1999 based on its hospital-specific rate for either
fiscal year 1982 under Sec. 412.73 or fiscal year 1987 under
Sec. 412.75, and that elects under paragraph (a)(2) of this section to
be paid based on a fiscal year 1996 base period.
(2) Hospitals that are otherwise eligible for but elect not to
receive payment on the basis of their Federal fiscal year 1996 updated
costs per case must notify their fiscal intermediary of this decision
prior to the beginning of their cost reporting period beginning on or
after October 1, 2000, for which such payments would otherwise be made.
If a hospital does not make the notification to its fiscal intermediary
before the end of the cost reporting period, the hospital is deemed to
have elected to have section 1886(b)(3)(I) of the Act apply to the
hospital.
(3) This section applies only to cost reporting periods beginning
on or after October 1, 2000.
(4) The formula for determining the hospital-specific costs for
hospitals described under paragraph (a)(1) of this section is set forth
in paragraph (f) of this section.
(b) Base-period costs for hospitals subject to fiscal year 1996
rebasing. (1) General rule. Except as provided in paragraph (b)(2) of
this section, for each hospital eligible under paragraph (a) of this
section, the intermediary determines the hospital's Medicare Part A
allowable inpatient operating costs, as described in Sec. 412.2(c), for
the 12-month or longer cost reporting period ending on or after
September 30, 1996 and before September 30, 1997, and computes the
hospital-specific rate for purposes of determining prospective payment
rates for inpatient operating costs as determined under Sec. 412.92(d).
(2) Exceptions. (i) If the hospital's last cost reporting period
ending before September 30, 1997 is for less than 12 months, the base
period is the hospital's most recent 12-month or longer cost reporting
period ending before the short period report.
(ii) If the hospital does not have a cost reporting period ending
on or after September 30, 1996 and before September 30, 1997, and does
have a cost reporting period beginning on or after October 1, 1995 and
before October 1, 1996, that cost reporting period is the base period
unless the cost reporting period is for less than 12 months. If that
cost reporting period is for less than 12 months, the base period is
the hospital's most recent 12-month or longer cost reporting period
ending before the short cost reporting period. If a hospital has no
cost reporting period beginning in fiscal year 1996, the hospital will
not have a hospital-specific rate based on fiscal year 1996.
(c) Costs on a per discharge basis. The intermediary determines the
hospital's average base-period operating cost per discharge by dividing
the total operating costs by the number of discharges in the base
period. For purposes of this section, a transfer as defined in
Sec. 412.4(b) is considered to be a discharge.
(d) Case-mix adjustment. The intermediary divides the average base-
period cost per discharge by the hospital's case-mix index for the base
period.
(e) Updating base-period costs. For purposes of determining the
updated base-period costs for cost reporting periods beginning in
Federal fiscal year 1996, the update factor is determined using the
methodology set forth in Sec. 412.73(c)(12) through (c)(15).
(f) DRG adjustment. The applicable hospital-specific cost per
discharge is multiplied by the appropriate DRG weighting factor to
determine the hospital-specific base payment amount (target amount) for
a particular covered discharge.
(g) Phase-in of fiscal year 1996 base-period rate. The intermediary
calculates the hospital-specific rates determined on the basis of the
fiscal year 1996 base period rate as follows:
(1) For Federal fiscal year 2001, the hospital-specific rate is the
sum of 75 percent of the hospital-specific rate for fiscal year 1982 or
fiscal year 1987 (the Sec. 412.73 or Sec. 412.75 target amount), plus
25 percent of the hospital-specific rate for fiscal year 1996 (the
Sec. 412.77 target amount).
(2) For Federal fiscal year 2002, the hospital-specific rate is the
sum of 50 percent of the Sec. 412.73 or Sec. 412.75 target amount and
50 percent of the Sec. 412.77 target amount.
(3) For Federal fiscal year 2003, the hospital-specific rate is the
sum of 25 percent of the Sec. 412.73 or Sec. 412.75 target amount and
75 percent of the Sec. 412.77 target amount.
(4) For Federal fiscal year 2004 and any subsequent fiscal years,
the hospital-specific rate is 100 percent of the Sec. 412.77 target
amount.
(h) Notice of hospital-specific rates. The intermediary furnishes a
hospital eligible for rebasing a notice of the hospital-specific rate
as computed in accordance with this section. The notice will contain a
statement of the hospital's Medicare Part A allowable inpatient
operating costs, the number of Medicare discharges, and the case-mix
index adjustment factor used to determine the hospital's cost per
discharge for the Federal fiscal year 1996 base period.
(i) Right to administrative and judicial review. An intermediary's
determination of the hospital-specific rate for a hospital is subject
to administrative and judicial review. Review is available to a
hospital upon receipt of the notice of the hospital-specific rate. This
notice is treated as a final intermediary determination of the amount
of program reimbursement for purposes of subpart R of part 405 of this
chapter.
(j) Modification of hospital-specific rate. (1) The intermediary
recalculates the hospital-specific rate to reflect the following:
(i) Any modifications that are determined as a result of
administrative or judicial review of the hospital-specific rate
determinations; or
(ii) Any additional costs that are recognized as allowable costs
for the
[[Page 26323]]
hospital's base period as a result of administrative or judicial review
of the base-period notice of amount of program reimbursement.
(2) With respect to either the hospital-specific rate determination
or the amount of program reimbursement determination, the actions taken
on administrative or judicial review that provide a basis for the
recalculations of the hospital-specific rate include the following:
(i) A reopening and revision of the hospital's base-period notice
of amount of program reimbursement under Secs. 405.1885 through
405.1889 of this chapter.
(ii) A prehearing order or finding issued during the provider
payment appeals process by the appropriate reviewing authority under
Sec. 405.1821 or Sec. 405.1853 of this chapter that resolved a matter
at issue in the hospital's base-period notice of amount of program
reimbursement.
(iii) An affirmation, modification, or reversal of a Provider
Reimbursement Review Board decision by the Administrator of HCFA
underSec. 405.1875 of this chapter that resolved a matter at issue in
the hospital's base-period notice of amount of program reimbursement.
(iv) An administrative or judicial review decision under
Sec. 405.1831, Sec. 405.1871, or Sec. 405.1877 of this chapter that is
final and no longer subject to review under applicable law or
regulations by a higher reviewing authority, and that resolved a matter
at issue in the hospital's base-period notice of amount of program
reimbursement.
(v) A final, nonappealable court judgment relating to the base-
period costs.
(3) The adjustments to the hospital-specific rate made under
paragraphs (i)(1) and (i)(2) of this section are effective
retroactively to the time of the intermediary's initial determination
of the rate.
9. Section 412.92 is amended by revising paragraph (d)(1) to read
as follows:
Sec. 412.92 Special treatment: sole community hospitals.
* * * * *
(d) Determining prospective payment rates for inpatient operating
costs for sole community hospitals. (1) General rules. (i) Except as
provided in paragraph (d)(1)(ii) of this section, for cost reporting
periods beginning on or after April 1, 1990, a sole community hospital
is paid based on whichever of the following amounts yields the greatest
aggregate payment for the cost reporting period:
(A) The Federal payment rate applicable to the hospitals as
determined under Sec. 412.63.
(B) The hospital-specific rate as determined under Sec. 412.73.
(C) The hospital-specific rate as determined under Sec. 412.75.
(ii) For cost reporting periods beginning on or after October 1,
2000, a sole community hospital that was paid for its cost reporting
period beginning during 1999 on the basis of the hospital-specific rate
specified in paragraph (d)(1)(i)(B) or (d)(1)(i)(C) of this section,
may elect to use the hospital-specific rate as determined under
Sec. 412.77.
* * * * *
10. Section 412.105 is amended by:
a. Revising paragraph (d)(3)(v);
b. Republishing paragraph (f)(1) introductory text and revising
paragraph (f)(1)(vii);
c. Adding new paragraphs (f)(1)(viii) and (f)(1)(ix); and
d. Revising paragraph (g), to read as follows:
Sec. 412.105 Special treatment: Hospitals that incur indirect costs
for graduate medical education programs.
* * * * *
(d) Determination of education adjustment factor * * *
(3) * * *
(v) For discharges occurring during fiscal year 2001, 1.54.
* * * * *
(f) Determining the total number of full-time equivalent residents
for cost reporting periods beginning on or after July 1, 1991. (1) For
cost reporting periods beginning on or after July 1, 1991, the count of
full-time equivalent residents for the purpose of determining the
indirect medical education adjustment is determined as follows:
* * * * *
(vii) If a hospital establishes a new medical residency training
program, as defined in Sec. 413.86(g)(9) of this subchapter, the
hospital's full-time equivalent cap may be adjusted in accordance with
the provisions of Secs. 413.86(g)(6) (i) through (iv) of this
subchapter.
(viii) A hospital that began construction of its facility prior to
August 5, 1997, and sponsored new medical residency training programs
on or after January 1, 1995 and on or before August 5, 1997, that
either received initial accreditation by the appropriate accrediting
body or temporarily trained residents at another hospital(s) until the
facility was completed, may receive an adjustment to its full-time
equivalent cap in accordance with the provisions of Sec. 413.86(g)(7)
of this subchapter.
(ix) A hospital may receive a temporary adjustment to its full-time
equivalent cap to reflect residents added because of another hospital's
closure if the hospital meets the criteria specified in
Sec. 413.86(g)(8) of this subchapter.
* * * * *
(g) Indirect medical education payment for managed care enrollees.
For portions of cost reporting periods occurring on or after January 1,
1998, a payment is made to a hospital for indirect medical education
costs, as determined under paragraph (e) of this section, for
discharges associated with individuals who are enrolled under a risk-
sharing contract with an eligible organization under section 1876 of
the Act or with a Medicare+Choice organization under title XVIII, Part
C of the Act during the period, according to the applicable payment
percentages described in Secs. 413.86(d)(3)(i) through (d)(3)(v) of
this subchapter.
11. In Sec. 412.106, the introductory text of paragraph (e) is
republished and paragraphs (e)(4) and (e)(5) are revised to read as
follows:
Sec. 412.106 Special treatment: Hospitals that serve a
disproportionate share of low-income patients.
* * * * *
(e) Reduction in payment for FYs 1998 through 2002. The amounts
otherwise payable to a hospital under paragraph (d) of this section are
reduced by the following:
* * * * *
(4) For FY 2001, 3 percent.
(5) For FY 2002, 4 percent.
* * * * *
12. Section 412.230 is amended by:
a. Republishing the introductory text of paragraph (e)(1); and
b. Revising paragraph (e)(1)(iii) and (e)(1)(iv)(A), to read as
follows:
Sec. 412.230 Criteria for an individual hospital seeking redesignation
to another rural area or an urban area.
* * * * *
(e) Use of urban or other rural area's wage index--(1) Criteria for
use of area's wage index. Except as provided in paragraphs (e)(3) and
(e)(4) of this section, to use an area's wage index, a hospital must
demonstrate the following:
* * * * *
(iii) The hospital's average hourly wage is, in the case of a
hospital located in a rural area, at least 106 percent, and, in the
case of a hospital located in an urban area, at least 108 percent of
the average hourly wage of hospitals in the
[[Page 26324]]
area in which the hospital is located; and
(iv) * * *
(A) The hospital's average hourly wage is equal to, in the case of
a hospital located in a rural area, at least 82 percent, and in the
case of a hospital located in an urban area, at least 84 percent of the
average hourly wage of hospitals in the area to which it seeks
redesignation.
* * * * *
PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE SERVICES; OPTIONAL PROSPECTIVELY DETERMINED
PAYMENT RATES FOR SKILLED NURSING FACILITIES
B. Part 413 is amended as follows:
1. The authority citation for Part 413 is revised to read as
follows:
Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and
(n), 1871, 1881, 1883, and 1886 of the Social Security Act (42
U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n),
1395hh, 1395rr, 1395tt, and 1395ww).
2. In Sec. 413.40, paragraph (a)(3) is amended by revising
paragraph (B) in the definition of ``ceiling'' and paragraph (d)(4) is
revised, to read as follows:
Sec. 413.40 Ceiling on the rate of increase in hospital inpatient
costs.
(a) Introduction. * * *
(3) Definitions. * * *
Ceiling. * * *
(B) The hospital-within-a-hospital has discharged to the other
hospital and subsequently readmitted more than 5 percent (that is, in
excess of 5.0 percent) of the total number of Medicare inpatients
discharged from the hospital-within-a-hospital in that cost reporting
period.
* * * * *
(d) Application of the target amount in determining the amount of
payment. * * *
(4) Continuous improvement bonus payments. (i) For cost reporting
periods beginning on or after October 1, 1997 and ending before October
1, 2000, eligible hospitals (as defined in paragraph (d)(5) of this
section) receive payments in addition to those in paragraph (d)(2) of
this section, as applicable. These payments are equal to the lesser
of--
(A) 50 percent of the amount by which the operating costs are less
than the expected costs for the period; or
(B) 1 percent of the ceiling.
(ii) For cost reporting periods beginning on or after October 1,
2000, and ending before October 1, 2001, eligible psychiatric hospitals
and units and long-term care hospitals (as defined in paragraph (d)(5)
of this section) receive payments in addition to those in paragraph
(d)(2) of this section, as applicable. These payments are equal to the
lesser of--
(A) 50 percent of the amount by which the operating costs are less
than the expected costs for the period; or
(B) 1.5 percent of the ceiling.
(iii) For cost reporting periods beginning on or after October 1,
2001, and ending before October 1, 2002, eligible psychiatric hospitals
and units and long-term care hospitals receive payments in addition to
those in paragraph (d)(5) of this section, as applicable. These
payments are equal to the lesser of--
(A) 50 percent of the amount by which the operating costs are less
than the expected costs for the periods; or
(B) 2 percent of the ceiling.
* * * * *
3. Section 413.70 is revised to read as follows:
Sec. 413.70 Payment for services of a CAH.
(a) Payment for inpatient services furnished by a CAH. (1) Payment
for inpatient services of a CAH is the reasonable costs of the CAH in
providing CAH services to its inpatients, as determined in accordance
with section 1861(v)(1)(A) of the Act and the applicable principles of
cost reimbursement in this part and in Part 415 of this chapter, except
that the following payment principles are excluded when determining
payment for CAH inpatient services:
(i) Lesser of cost or charges;
(ii) Ceilings on hospital operating costs; and
(iii) Reasonable compensation equivalent (RCE) limits for physician
services to providers.
(2) Payment to a CAH for inpatient services does not include any
costs of physician services or other professional services to CAH
inpatients, and is subject to the Part A hospital deductible and
coinsurance, as determined under subpart G of part 409 of this chapter.
(b) Payment for outpatient services furnished by a CAH. (1)
General. Unless the CAH elects to be paid for services to its
outpatients under the method specified in paragraph (b)(3) of this
section, the amount of payment for outpatient services of a CAH is the
amount determined under paragraph (b)(2) of this section.
(2) Reasonable costs for facility services. (i) Payment for
outpatient services of a CAH is the reasonable costs of the CAH in
providing CAH services to its outpatients, as determined in accordance
with section 1861(v)(1)(A) of the Act and the applicable principles of
cost reimbursement in this part and in Part 415 of this chapter, except
that the following payment principles are excluded when determining
payment for CAH outpatient services:
(A) Lesser of costs or charges;
(B) RCE limits;
(C) Any type of reduction to operating or capital costs under
Sec. 413.124 or Sec. 413.130(j)(7); and
(D) Blended payment amounts for ambulatory surgical services,
radiology services, and other diagnostic services;
(ii) Payment to a CAH under paragraph (b)(2) of this section does
not include any costs of physician services or other professional
services to CAH outpatients, and is subject to the Part B deductible
and coinsurance amounts, as determined under Secs. 410.152(k), 410.160,
and 410.161 of this chapter.
(3) Election to be paid reasonable costs for facility services plus
fee schedule for professional services. (i) A CAH may elect to be paid
for outpatient services in any cost reporting period under the method
described in paragraphs (b)(3)(ii) and (b)(3)(iii) of this section.
This election must be made in writing, made on an annual basis, and
delivered to the intermediary at least 60 days before the start of each
affected cost reporting period. An election of this payment method,
once made for a cost reporting period, remains in effect for all of
that period and applies to all services furnished to outpatients during
that period.
(ii) If the CAH elects payment under this method, payment to the
CAH for each outpatient visit will be the sum of the following amounts:
(A) For facility services, not including any services for which
payment may be made under paragraph (b)(3)(ii)(B) of this section, the
reasonable costs of the services as determined under paragraph
(b)(2)(i) of this section; and
(B) For professional services otherwise payable to the physician or
other practitioner on a fee schedule basis, the amounts that otherwise
would be paid for the services if the CAH had not elected payment under
this method.
(iii) Payment to a CAH is subject to the Part B deductible and
coinsurance amounts, as determined under Secs. 410.152, 410.160, and
410.161 of this chapter.
(c) Final payment based on cost report. Final payment to the CAH
for CAH facility services to inpatients and outpatients furnished
during a cost reporting is based on a cost report for that period, as
required under Sec. 413.20(b).
[[Page 26325]]
4. Section 413.86 is amended by:
a. Revising the first sentence of paragraph (d)(3);
b. Revising the introductory text of paragraph (e)(3);
c. Redesignating paragraph (e)(4) as paragraph (e)(5);
d. Adding a new paragraph (e)(4);
e. Revising newly designated paragraph (e)(5)(i)(B); and
f. Adding a new paragraph (e)(5)(iv), to read as follows:
Sec. 413.86 Direct graduate medical education payments.
* * * * *
(d) Calculating payment for graduate medical education costs. * * *
(3) Step Three. For portions of cost reporting periods occurring on
or after January 1, 1998, the product derived in step one is multiplied
by the proportion of the hospital's inpatient days attributable to
individuals who are enrolled under a risk-sharing contract with an
eligible organization under section 1876 of the Act and who are
entitled to Medicare Part A or with a Medicare+Choice organization
under Title XVIII, Part C of the Act. * * *
* * * * *
(e) Determining per resident amounts for the base period. * * *
(3) For cost reporting periods beginning on or after July 1, 1986.
Subject to the provisions of paragraph (e)(4) of this section, for cost
reporting periods beginning on or after July 1, 1986, a hospital's
base-period per resident amount is adjusted as follows:
* * * * *
(4) For cost reporting periods beginning on or after October 1,
2000 and ending on or before September 30, 2005. For cost reporting
periods beginning on or after October 1, 2000 and ending on or before
September 30, 2005, a hospital's per resident amount for each fiscal
year is adjusted in accordance with the following provisions:
(i) General provisions. For purposes of Sec. 413.86(e)(4)--
(A) Weighted average per resident amount. The weighted average per
resident amount is established as follows:
(1) Using data from hospitals' cost reporting periods ending during
FY 1997, HCFA calculates each hospital's single per resident amount by
adding each hospital's primary care and non-primary care per resident
amounts, weighted by its respective FTEs, and dividing by the sum of
the FTEs for primary care and non-primary care residents.
(2) Each hospital's single per resident amount calculated under
paragraph (e)(4)(i)(A)(1) of this section is standardized by the 1999
geographic adjustment factor for the physician fee schedule area (as
determined under Sec. 414.26 of this chapter) in which the hospital is
located.
(3) HCFA calculates an average of all hospitals' standardized per
resident amounts that are determined under paragraph (e)(4)(i)(A)(2) of
this section. The resulting amount is the weighted average per resident
amount.
(B) Primary care/obstetrics and gynecology and non-primary care per
resident amounts. A hospital's per resident amount is an amount
inclusive of any CPI-U adjustments that the hospital may have received
since the hospital's base year, including any CPI-U adjustments the
hospital may have received because the hospital trains primary care/
obstetrics and gynecology residents and non-primary care residents as
specified under paragraph (e)(3)(ii) of this section.
(ii) Adjustment beginning in FY 2001 and ending in FY 2005. For
cost reporting periods beginning on or after October 1, 2000 and ending
on or before September 30, 2005, a hospital's per resident amount is
adjusted in accordance with paragraphs (e)(4)(ii)(A) through
(e)(4)(ii)(C) of this section, in that order:
(A) Updating the weighted average per resident amount for
inflation. The weighted average per resident amount (as determined
under paragraph (e)(4)(i)(A) of this section) is updated by the
estimated percentage increase in the CPI-U during the period beginning
with the month that represents the midpoint of the cost reporting
periods ending during FY 1997 (that is, October 1, 1996) and ending
with the midpoint of the hospital's cost reporting period that begins
in FY 2001.
(B) Adjusting for locality. The updated weighted average per
resident amount determined under paragraph (e)(4)(ii)(A) of this
section (the national average per resident amount) is adjusted for the
locality of each hospital by multiplying the national average per
resident amount by the 1999 geographic adjustment factor for the
physician fee schedule area in which each hospital is located,
established in accordance with Sec. 414.26 of this subchapter.
(C) Determining necessary revisions to the per resident amount. The
locality-adjusted national average per resident amount, as calculated
in accordance with paragraph (e)(4)(ii)(B) of this section, is compared
to the hospital's per resident amount. Each hospital's per resident
amount is revised, if appropriate, according to the following three
categories:
(1) Floor. For cost reporting periods beginning on or after October
1, 2000 and on or before September 30, 2001, if the hospital's per
resident amount would otherwise be less than 70 percent of the
locality-adjusted national average per resident amount for FY 2001 (as
determined under paragraph (e)(4)(ii)(B) of this section), the per
resident amount is equal to 70 percent of the locality-adjusted
national average per resident amount for FY 2001. For subsequent cost
reporting periods, the hospital's per resident amount is updated using
the methodology specified under paragraph (e)(3)(i) of this section.
(2) Ceiling. If the hospital's per resident amount is greater than
140 percent of the locality-adjusted national average per resident
amount, the per resident amount is adjusted as follows for FY 2001
through FY 2005:
(i) FY 2001. For cost reporting periods beginning on or after
October 1, 2000 and on or before September 30, 2001, if the hospital's
FY 2000 per resident amount exceeds 140 percent of the FY 2001
locality-adjusted national average per resident amount (as calculated
under paragraph (e)(4)(ii)(B) of this section), then, subject to the
provision stated in paragraph (e)(4)(ii)(C)(2)(iv) of this section, the
hospital's per resident amount is frozen at the FY 2000 per resident
amount and is not updated for FY 2001 by the CPI-U factor.
(ii) FY 2002. For cost reporting periods beginning on or after
October 1, 2001 and on or before September 30, 2002, if the hospital's
FY 2001 per resident amount exceeds 140 percent of the FY 2002
locality-adjusted national average per resident amount, then, subject
to the provision stated in paragraph (e)(4)(ii)(C)(2)(iv) of this
section, the hospital's per resident amount is frozen at the FY 2001
per resident amount and is not updated for FY 2002 by the CPI-U factor.
(iii) FY 2003 through FY 2005. For cost reporting periods beginning
on or after October 1, 2002 and on or before September 30, 2005, if the
hospital's per resident amount for the previous cost reporting period
is greater than 140 percent of the locality-adjusted national average
per resident amount for that same previous cost reporting period (for
example, for cost reporting periods beginning in FY 2003, compare the
hospital's per resident amount from the FY 2002 cost report to the
hospital's locality-adjusted national average per resident amount from
FY 2002), then, subject to the provision stated in paragraph
(e)(4)(ii)(C)(2)(iv) of this section, the hospital's per resident
amount is adjusted using the methodology specified in paragraph
[[Page 26326]]
(e)(3)(i) of this section, except that the CPI-U applied for a 12-month
period is reduced (but not below zero) by 2 percentage points.
(iv) General rule for hospitals that exceed the ceiling. For cost
reporting periods beginning on or after October 1, 2000 and on or
before September 30, 2005, if a hospital's per resident amount exceeds
140 percent of the hospital's locality-adjusted national average per
resident amount and it is adjusted under any of the criteria under
paragraphs (e)(4)(ii)(C)(2)(i) through (iii) of this section, the
current year per resident amount resident amount cannot be reduced
below 140 percent of the locality-adjusted national average per
resident amount.
(3) Per resident amounts greater than or equal to the floor and
less than or equal to the ceiling. For cost reporting periods beginning
on or after October 1, 2000 and on or before September 30, 2005, if a
hospital's per resident amount is greater than or equal to 70 percent
and less than or equal to 140 percent of the hospital's locality-
adjusted national average per resident amount for each respective
fiscal year, the hospital's per resident amount is updated using the
methodology specified in paragraph (e)(3)(i) of this section.
(5) Exceptions--(i) Base period for certain hospitals. * * *
(B) The weighted mean value of per resident amounts of hospitals
located in the same geographic wage area, as that term is used in the
prospective payment system under part 412 of this chapter, for cost
reporting periods beginning in the same fiscal years. If there are
fewer than three amounts that can be used to calculate the weighted
mean value, the calculation of the per resident amounts includes all
hospitals in the hospital's region as that term is used in
Sec. 412.62(f)(1)(i) of this chapter.
* * * * *
(iv) Effective October 1, 2000, the per resident amounts
established under paragraphs (e)(5)(i) through (iii) of this section
are subject to the provisions of paragraph (e)(4) of this section.
* * * * *
PART 485B--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS
C. Part 485 is amended as follows:
1. The authority citation for part 485 continues to read as
follows:
Authority: Sec. 1820 of the Act (42 U.S.C. 1395i-4), unless
otherwise noted.
2. A new Sec. 485.643 is added to subpart F to read as follows:
Sec. 485.643 Condition of participation: Organ, tissue, and eye
procurement.
The CAH must have and implement written protocols that:
(a) Incorporate an agreement with an OPO designated under part 486
of this chapter, under which it must notify, in a timely manner, the
OPO or a third party designated by the OPO of individuals whose death
is imminent or who have died in the CAH. The OPO determines medical
suitability for organ donation and, in the absence of alternative
arrangements by the CAH, the OPO determines medical suitability for
tissue and eye donation, using the definition of potential tissue and
eye donor and the notification protocol developed in consultation with
the tissue and eye banks identified by the CAH for this purpose;
(b) Incorporate an agreement with at least one tissue bank and at
least one eye bank to cooperate in the retrieval, processing,
preservation, storage and distribution of tissues and eyes, as may be
appropriate to assure that all usable tissues and eyes are obtained
from potential donors, insofar as such an agreement does not interfere
with organ procurement;
(c) Ensure, in collaboration with the designated OPO, that the
family of each potential donor is informed of its option to either
donate or not donate organs, tissues, or eyes. The individual
designated by the CAH to initiate the request to the family must be a
designated requestor. A designated requestor is an individual who has
completed a course offered or approved by the OPO and designed in
conjunction with the tissue and eye bank community in the methodology
for approaching potential donor families and requesting organ or tissue
donation;
(d) Encourage discretion and sensitivity with respect to the
circumstances, views, and beliefs of the families of potential donors;
(e) Ensure that the CAH works cooperatively with the designated
OPO, tissue bank and eye bank in educating staff on donation issues,
reviewing death records to improve identification of potential donors,
and maintaining potential donors while necessary testing and placement
of potential donated organs, tissues, and eyes take place.
(f) For purposes of these standards, the term ``Organ'' means a
human kidney, liver, heart, lung, or pancreas.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: April 14, 2000.
Nancy Ann Min DeParle,
Administrator, Health Care Financing Administration
Dated: April 28, 2000.
Donna E. Shalala,
Secretary.
[Editorial Note: The following Addendum and appendixes will not
appear in the Code of Federal Regulations.]
Addendum--Proposed Schedule of Standardized Amounts Effective With
Discharges Occurring On or After October 1, 2000 and Update Factors
and Rate-of-Increase Percentages Effective With Cost Reporting
Periods Beginning On or After October 1, 2000
I. Summary and Background
In this Addendum, we are setting forth the proposed amounts and
factors for determining prospective payment rates for Medicare
inpatient operating costs and Medicare inpatient capital-related costs.
We are also setting forth proposed rate-of-increase percentages for
updating the target amounts for hospitals and hospital units excluded
from the prospective payment system.
For discharges occurring on or after October 1, 2000, except for
sole community hospitals, Medicare-dependent, small rural hospitals,
and hospitals located in Puerto Rico, each hospital's payment per
discharge under the prospective payment system will be based on 100
percent of the Federal national rate.
Sole community hospitals are paid based on whichever of the
following rates yields the greatest aggregate payment: the Federal
national rate, the updated hospital-specific rate based on FY 1982 cost
per discharge, the updated hospital-specific rate based on FY 1987 cost
per discharge, or, if qualified, 25 percent of the updated hospital-
specific rate based on FY 1996 cost per discharge, plus 75 percent of
the updated FY 1982 or FY 1987 hospital-specific rate. Section 405 of
Public Law 106-113 amended section 1886(b)(3) of the Act to allow a
sole community hospital that was paid for its cost reporting period
beginning during FY 1999 on the basis of either its FY 1982 or FY 1987
hospital-specific rate to elect to rebase its hospital-specific rate
based on its FY 1996 cost per discharge.
Section 404 of Public Law 106-113 amended section 1886(d)(5)(G) of
the Act to extend the special treatment for Medicare-dependent, small
rural hospitals. Therefore, Medicare-dependent, small rural hospitals
are paid based on the Federal national rate or, if higher, the Federal
national rate plus 50 percent of the difference
[[Page 26327]]
between the Federal national rate and the updated hospital-specific
rate based on FY 1982 or FY 1987 cost per discharge, whichever is
higher.
For hospitals in Puerto Rico, the payment per discharge is based on
the sum of 50 percent of a Puerto Rico rate and 50 percent of a Federal
national rate.
As discussed below in section II of this Addendum, we are proposing
to make changes in the determination of the prospective payment rates
for Medicare inpatient operating costs for FY 2001. The changes, to be
applied prospectively, would affect the calculation of the Federal
rates. In section III of this Addendum, we discuss updates to the
payments per unit for blood clotting factor provided to hospital
inpatients who have hemophilia. In section IV of this Addendum, we
discuss our proposed changes for determining the prospective payment
rates for Medicare inpatient capital-related costs for FY 2001. Section
V of this Addendum sets forth our proposed changes for determining the
rate-of-increase limits for hospitals excluded from the prospective
payment system for FY 2001. The tables to which we refer in the
preamble to this proposed rule are presented at the end of this
Addendum in section VI.
II. Proposed Changes to Prospective Payment Rates for Inpatient
Operating Costs for FY 2001
The basic methodology for determining prospective payment rates for
inpatient operating costs is set forth at Sec. 412.63 for hospitals
located outside of Puerto Rico. The basic methodology for determining
the prospective payment rates for inpatient operating costs for
hospitals located in Puerto Rico is set forth at Secs. 412.210 and
412.212. Below, we discuss the proposed factors used for determining
the prospective payment rates. The Federal and Puerto Rico rate
changes, once issued as final, will be effective with discharges
occurring on or after October 1, 2000. As required by section
1886(d)(4)(C) of the Act, we must also adjust the DRG classifications
and weighting factors for discharges in FY 2001.
In summary, the proposed standardized amounts set forth in Tables
1A and 1C of section VI of this Addendum reflect--
Updates of 2.0 percent for all areas (that is, the market
basket percentage increase of 3.1 percent minus 1.1 percentage points);
An adjustment to ensure budget neutrality as provided for
in sections 1886(d)(4)(C)(iii) and (d)(3)(E) of the Act by applying new
budget neutrality adjustment factors to the large urban and other
standardized amounts;
An adjustment to ensure budget neutrality as provided for
in section 1886(d)(8)(D) of the Act by removing the FY 2000 budget
neutrality factor and applying a revised factor;
An adjustment to apply the revised outlier offset by
removing the FY 2000 outlier offsets and applying a new offset; and
An adjustment in the Puerto Rico standardized amounts to
reflect the application of a Puerto Rico-specific wage index.
The standardized amounts set forth in table 1E of section VI of
this Addendum, which apply to sole community hospitals, reflect updates
of 3.1 percent (that is, the full market basket percentage increase) as
provided for in section 406 of Public Law 106-113, but otherwise
reflect the same adjustments as the national standardized amounts.
A. Calculation of Adjusted Standardized Amounts
1. Standardization of Base-Year Costs or Target Amounts
Section 1886(d)(2)(A) of the Act required the establishment of
base-year cost data containing allowable operating costs per discharge
of inpatient hospital services for each hospital. The preamble to the
September 1, 1983 interim final rule (48 FR 39763) contains a detailed
explanation of how base-year cost data were established in the initial
development of standardized amounts for the prospective payment system
and how they are used in computing the Federal rates.
Section 1886(d)(9)(B)(i) of the Act required us to determine the
Medicare target amounts for each hospital located in Puerto Rico for
its cost reporting period beginning in FY 1987. The September 1, 1987
final rule (52 FR 33043, 33066) contains a detailed explanation of how
the target amounts were determined and how they are used in computing
the Puerto Rico rates.
The standardized amounts are based on per discharge averages of
adjusted hospital costs from a base period or, for Puerto Rico,
adjusted target amounts from a base period, updated and otherwise
adjusted in accordance with the provisions of section 1886(d) of the
Act. Sections 1886(d)(2)(B) and (d)(2)(C) of the Act required us to
update base-year per discharge costs for FY 1984 and then standardize
the cost data in order to remove the effects of certain sources of cost
variations among hospitals. These effects include case-mix, differences
in area wage levels, cost-of-living adjustments for Alaska and Hawaii,
indirect medical education costs, and payments to hospitals serving a
disproportionate share of low-income patients.
Under sections 1886(d)(2)(H) and (d)(3)(E) of the Act, in making
payments under the prospective payment system, the Secretary estimates
from time to time the proportion of costs that are wages and wage-
related costs. Since October 1, 1997, when the market basket was last
revised, we have considered 71.1 percent of costs to be labor-related
for purposes of the prospective payment system. The average labor share
in Puerto Rico is 71.3 percent. We are proposing to revise the
discharge-weighted national standardized amount for Puerto Rico to
reflect the proportion of discharges in large urban and other areas
from the FY 1999 MedPAR file.
2. Computing Large Urban and Other Area Averages
Sections 1886(d)(2)(D) and (d)(3) of the Act require the Secretary
to compute two average standardized amounts for discharges occurring in
a fiscal year: one for hospitals located in large urban areas and one
for hospitals located in other areas. In addition, under sections
1886(d)(9)(B)(iii) and (d)(9)(C)(i) of the Act, the average
standardized amount per discharge must be determined for hospitals
located in urban and other areas in Puerto Rico. Hospitals in Puerto
Rico are paid a blend of 50 percent of the applicable Puerto Rico
standardized amount and 50 percent of a national standardized payment
amount.
Section 1886(d)(2)(D) of the Act defines ``urban area'' as those
areas within a Metropolitan Statistical Area (MSA). A ``large urban
area'' is defined as an urban area with a population of more than 1
million. In addition, section 4009(i) of Public Law 100-203 provides
that a New England County Metropolitan Area (NECMA) with a population
of more than 970,000 is classified as a large urban area. As required
by section 1886(d)(2)(D) of the Act, population size is determined by
the Secretary based on the latest population data published by the
Bureau of the Census. Urban areas that do not meet the definition of a
``large urban area'' are referred to as ``other urban areas.'' Areas
that are not included in MSAs are considered ``rural areas'' under
section 1886(d)(2)(D) of the Act. Payment for discharges from hospitals
located in large urban areas will be based on the large urban
standardized amount. Payment for discharges from hospitals located in
other urban and rural areas will be
[[Page 26328]]
based on the other standardized amount.
Based on 1997 population estimates published by the Bureau of the
Census, 61 areas meet the criteria to be defined as large urban areas
for FY 2001. These areas are identified by a footnote in Table 4A.
3. Updating the Average Standardized Amounts
Under section 1886(d)(3)(A) of the Act, we update the area average
standardized amounts each year. In accordance with section
1886(d)(3)(A)(iv) of the Act, we are proposing to update the large
urban areas' and the other areas' average standardized amounts for FY
2001 using the applicable percentage increases specified in section
1886(b)(3)(B)(i) of the Act. Section 1886(b)(3)(B)(i)(XVI) of the Act
specifies that the update factor for the standardized amounts for FY
2001 is equal to the market basket percentage increase minus 1.1
percentage points for hospitals, except sole community hospitals, in
all areas. The Act, as amended by section 406 of Public Law 106-113,
specifies an update factor equal to the market basket percentage
increase for sole community hospitals.
The percentage change in the market basket reflects the average
change in the price of goods and services purchased by hospitals to
furnish inpatient care. The most recent forecast of the hospital market
basket increase for FY 2001 is 3.1 percent. Thus, for FY 2001, the
proposed update to the average standardized amounts equals 3.1 percent
for sole community hospitals and 2.0 percent for other hospitals.
As in the past, we are adjusting the FY 2000 standardized amounts
to remove the effects of the FY 2000 geographic reclassifications and
outlier payments before applying the FY 2001 updates. That is, we are
increasing the standardized amounts to restore the reductions that were
made for the effects of geographic reclassification and outliers. We
then apply the new offsets to the standardized amounts for outliers and
geographic reclassifications for FY 2001.
Although the update factors for FY 2001 are set by law, we are
required by section 1886(e)(3) of the Act to report to the Congress our
initial recommendation of update factors for FY 2001 for both
prospective payment hospitals and hospitals excluded from the
prospective payment system. For general information purposes, we have
included the report to Congress as Appendix C to this proposed rule.
Our proposed recommendation on the update factors (which is required by
sections 1886(e)(4)(A) and (e)(5)(A) of the Act) is set forth as
Appendix D to this proposed rule.
4. Other Adjustments to the Average Standardized Amounts
a. Recalibration of DRG Weights and Updated Wage Index--Budget
Neutrality Adjustment
Section 1886(d)(4)(C)(iii) of the Act specifies that, beginning in
FY 1991, the annual DRG reclassification and recalibration of the
relative weights must be made in a manner that ensures that aggregate
payments to hospitals are not affected. As discussed in section II of
the preamble, we normalized the recalibrated DRG weights by an
adjustment factor, so that the average case weight after recalibration
is equal to the average case weight prior to recalibration.
Section 1886(d)(3)(E) of the Act requires us to update the hospital
wage index on an annual basis beginning October 1, 1993. This provision
also requires us to make any updates or adjustments to the wage index
in a manner that ensures that aggregate payments to hospitals are not
affected by the change in the wage index.
To comply with the requirement of section 1886(d)(4)(C)(iii) of the
Act that DRG reclassification and recalibration of the relative weights
be budget neutral, and the requirement in section 1886(d)(3)(E) of the
Act that the updated wage index be budget neutral, we used historical
discharge data to simulate payments and compared aggregate payments
using the FY 2000 relative weights and wage index to aggregate payments
using the proposed FY 2001 relative weights and wage index. The same
methodology was used for the FY 2000 budget neutrality adjustment. (See
the discussion in the September 1, 1992 final rule (57 FR 39832).)
Based on this comparison, we computed a budget neutrality adjustment
factor equal to 0.996506. We also adjust the Puerto Rico-specific
standardized amounts for the effect of DRG reclassification and
recalibration. We computed a budget neutrality adjustment factor for
Puerto Rico-specific standardized amounts equal to 0.999753. These
budget neutrality adjustment factors are applied to the standardized
amounts without removing the effects of the FY 2000 budget neutrality
adjustments. We do not remove the prior budget neutrality adjustment
because estimated aggregate payments after the changes in the DRG
relative weights and wage index should equal estimated aggregate
payments prior to the changes. If we removed the prior year adjustment,
we would not satisfy this condition.
In addition, we are proposing to apply these same adjustment
factors to the hospital-specific rates that are effective for cost
reporting periods beginning on or after October 1, 2000. (See the
discussion in the September 4, 1990 final rule (55 FR 36073).)
b. Reclassified Hospitals--Budget Neutrality Adjustment
Section 1886(d)(8)(B) of the Act provides that, effective with
discharges occurring on or after October 1, 1988, certain rural
hospitals are deemed urban. In addition, section 1886(d)(10) of the Act
provides for the reclassification of hospitals based on determinations
by the Medicare Geographic Classification Review Board (MGCRB). Under
section 1886(d)(10) of the Act, a hospital may be reclassified for
purposes of the standardized amount or the wage index, or both.
Under section 1886(d)(8)(D) of the Act, the Secretary is required
to adjust the standardized amounts so as to ensure that aggregate
payments under the prospective payment system after implementation of
the provisions of sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the
Act are equal to the aggregate prospective payments that would have
been made absent these provisions. Section 152(b) of Public Law 106-113
requires reclassifications under that subsection to be treated as
reclassifications under section 1886(d)(10) of the Act. To calculate
this budget neutrality factor, we used historical discharge data to
simulate payments, and compared total prospective payments (including
IME and DSH payments) prior to any reclassifications to total
prospective payments after reclassifications. Based on these
simulations, we are applying an adjustment factor of 0.994270 to ensure
that the effects of reclassification are budget neutral.
The adjustment factor is applied to the standardized amounts after
removing the effects of the FY 2000 budget neutrality adjustment
factor. We note that the proposed FY 2001 adjustment reflects wage
index and standardized amount reclassifications approved by the MGCRB
or the Administrator as of February 29, 2000. The effects of any
additional reclassification changes resulting from appeals and reviews
of the MGCRB decisions for FY 2001 or from a hospital's request for the
withdrawal of a reclassification request will be reflected in the final
budget neutrality adjustment published in the final rule for FY 2001.
[[Page 26329]]
c. Outliers
Section 1886(d)(5)(A) of the Act provides for payments in addition
to the basic prospective payments for ``outlier'' cases, cases
involving extraordinarily high costs (cost outliers). Section
1886(d)(3)(B) of the Act requires the Secretary to adjust both the
large urban and other area national standardized amounts by the same
factor to account for the estimated proportion of total DRG payments
made to outlier cases. Similarly, section 1886(d)(9)(B)(iv) of the Act
requires the Secretary to adjust the large urban and other standardized
amounts applicable to hospitals in Puerto Rico to account for the
estimated proportion of total DRG payments made to outlier cases.
Furthermore, under section 1886(d)(5)(A)(iv) of the Act, outlier
payments for any year must be projected to be not less than 5 percent
nor more than 6 percent of total payments based on DRG prospective
payment rates.
i. FY 2001 outlier thresholds. For FY 2000, the fixed loss cost
outlier threshold was equal to the prospective payment for the DRG plus
$14,050 ($12,827 for hospitals that have not yet entered the
prospective payment system for capital-related costs). The marginal
cost factor for cost outliers (the percent of costs paid after costs
for the case exceed the threshold) was 80 percent. We applied an
outlier adjustment to the FY 2000 standardized amounts of 0.948859 for
the large urban and other areas rates and 0.9402 for the capital
Federal rate.
For FY 2001, we propose to establish a fixed loss cost outlier
threshold equal to the prospective payment rate for the DRG plus the
IME and DSH payments plus $17,250 ($15,763 for hospitals that have not
yet entered the prospective payment system for capital-related costs).
In addition, we propose to maintain the marginal cost factor for cost
outliers at 80 percent.
To calculate FY 2001 outlier thresholds, we simulated payments by
applying FY 2001 rates and policies to the December 1999 update of the
FY 1999 MedPAR file and the December 1999 update of the provider-
specific file. As we have explained in the past, to calculate outlier
thresholds, we apply a cost inflation factor to update costs for the
cases used to simulate payments. For FY 1999, we used a cost inflation
factor of minus 1.724 percent. For FY 2000, we used a cost inflation
factor (or cost adjustment factor) of zero percent. To set the proposed
FY 2001 outlier thresholds, we are using a cost inflation factor of 1.0
percent. This factor reflects our analysis of the best available cost
report data as well as calculations (using the best available data)
indicating that the percentage of actual outlier payments for FY 1999
is higher than we projected before the beginning of FY 1999, and that
the percentage of actual outlier payments for FY 2000 will likely be
higher than we projected before the beginning of FY 2000. The
calculations of ``actual'' outlier payments are discussed further
below.
ii. Other changes concerning outliers. In accordance with section
1886(d)(5)(A)(iv) of the Act, we calculated proposed outlier thresholds
so that outlier payments are projected to equal 5.1 percent of total
payments based on DRG prospective payment rates. In accordance with
section 1886(d)(3)(E), we reduced the proposed FY 2001 standardized
amounts by the same percentage to account for the projected proportion
of payments paid to outliers.
As stated in the September 1, 1993 final rule (58 FR 46348), we
establish outlier thresholds that are applicable to both inpatient
operating costs and inpatient capital-related costs. When we modeled
the combined operating and capital outlier payments, we found that
using a common set of thresholds resulted in a higher percentage of
outlier payments for capital-related costs than for operating costs. We
project that the proposed thresholds for FY 2001 will result in outlier
payments equal to 5.1 percent of operating DRG payments and 5.8 percent
of capital payments based on the Federal rate.
The proposed outlier adjustment factors to be applied to the
standardized amounts for FY 2001 are as follows:
------------------------------------------------------------------------
Operating Capital
standardized federal
amounts rate
------------------------------------------------------------------------
National................................... 0.948865 0.9416
Puerto Rico................................ 0.975408 0.9709
------------------------------------------------------------------------
We apply the proposed outlier adjustment factors after removing the
effects of the FY 2000 outlier adjustment factors on the standardized
amounts.
Table 8A in section VI of this Addendum contains the updated
Statewide average operating cost-to-charge ratios for urban hospitals
and for rural hospitals to be used in calculating cost outlier payments
for those hospitals for which the fiscal intermediary is unable to
compute a reasonable hospital-specific cost-to-charge ratio. These
Statewide average ratios would replace the ratios published in the July
30, 1999 final rule (64 FR 41620). Table 8B contains comparable
Statewide average capital cost-to-charge ratios. These average ratios
would be used to calculate cost outlier payments for those hospitals
for which the fiscal intermediary computes operating cost-to-charge
ratios lower than 0.201132 or greater than 1.308495 and capital cost-
to-charge ratios lower than 0.01266 or greater than 0.16901. This range
represents 3.0 standard deviations (plus or minus) from the mean of the
log distribution of cost-to-charge ratios for all hospitals. We note
that the cost-to-charge ratios in Tables 8A and 8B would be used during
FY 2001 when hospital-specific cost-to-charge ratios based on the
latest settled cost report are either not available or outside the
three standard deviations range.
iii. FY 1999 and FY 2000 outlier payments. In the July 30, 1999
final rule (64 FR 41547), we stated that, based on available data, we
estimated that actual FY 1999 outlier payments would be approximately
6.3 percent of actual total DRG payments. This was computed by
simulating payments using the March 1998 bill data available at the
time. That is, the estimate of actual outlier payments did not reflect
actual FY 1999 bills but instead reflected the application of FY 1999
rates and policies to available FY 1998 bills. Our current estimate,
using available FY 1999 bills, is that actual outlier payments for FY
1999 were approximately 7.5 percent of actual total DRG payments. We
note that the MedPAR file for FY 1999 discharges continues to be
updated. Thus, the data indicate that, for FY 1999, the percentage of
actual outlier payments relative to actual total payments is higher
than we projected before FY 1999 (and thus exceeds the percentage by
which we reduced the standardized amounts for FY 1999). In fact, the
data indicate that the proportion of actual outlier payments for FY
1999 exceeds 6 percent. Nevertheless, consistent with the policy and
statutory interpretation we have maintained since the inception of the
prospective payment system, we do not plan to recoup money and make
retroactive adjustments to outlier payments for FY 1999.
We currently estimate that actual outlier payments for FY 2000 will
be approximately 6.1 percent of actual total DRG payments, higher than
the 5.1 percent we projected in setting outlier policies for FY 2000.
This estimate is based on simulations using the December 1999 update of
the provider-specific file and the December 1999 update of the FY 1999
MedPAR file (discharge data for FY 1999 bills). We used these data to
calculate an estimate of the actual outlier percentage for FY 2000 by
applying FY 2000 rates and policies to available FY 1999 bills.
[[Page 26330]]
5. FY 2001 Standardized Amounts
The adjusted standardized amounts are divided into labor and
nonlabor portions. Table 1A (Table 1E for sole community hospitals)
contains the two national standardized amounts that we are proposing to
be applicable to all hospitals, except hospitals in Puerto Rico. Under
section 1886(d)(9)(A)(ii) of the Act, the Federal portion of the Puerto
Rico payment rate is based on the discharge-weighted average of the
national large urban standardized amount and the national other
standardized amount (as set forth in Table 1A). The labor and nonlabor
portions of the national average standardized amounts for Puerto Rico
hospitals are set forth in Table 1C. This table also includes the
Puerto Rico standardized amounts.
B. Adjustments for Area Wage Levels and Cost of Living
Tables 1A, 1C and 1E, as set forth in this Addendum, contain the
proposed labor-related and nonlabor-related shares that would be used
to calculate the prospective payment rates for hospitals located in the
50 States, the District of Columbia, and Puerto Rico. This section
addresses two types of adjustments to the standardized amounts that are
made in determining the prospective payment rates as described in this
Addendum.
1. Adjustment for Area Wage Levels
Sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act require
that we make an adjustment to the labor-related portion of the
prospective payment rates to account for area differences in hospital
wage levels. This adjustment is made by multiplying the labor-related
portion of the adjusted standardized amounts by the appropriate wage
index for the area in which the hospital is located. In section III of
this preamble, we discuss the data and methodology for the proposed FY
2001 wage index. The proposed wage index is set forth in Tables 4A
through 4F of this Addendum.
2. Adjustment for Cost-of-Living in Alaska and Hawaii
Section 1886(d)(5)(H) of the Act authorizes an adjustment to take
into account the unique circumstances of hospitals in Alaska and
Hawaii. Higher labor-related costs for these two States are taken into
account in the adjustment for area wages described above. For FY 2001,
we propose to adjust the payments for hospitals in Alaska and Hawaii by
multiplying the nonlabor portion of the standardized amounts by the
appropriate adjustment factor contained in the table below. If the
Office of Personnel Management releases revised cost-of-living
adjustment factors before July 1, 2000, we will publish them in the
final rule and use them in determining FY 2001 payments.
Table of Cost-of-Living Adjustment Factors, Alaska and Hawaii Hospitals
------------------------------------------------------------------------
------------------------------------------------------------------------
Alaska--All areas................................................ 1.25
Hawaii:
County of Honolulu........................................... 1.25
County of Hawaii............................................. 1.15
County of Kauai.............................................. 1.225
County of Maui............................................... 1.225
County of Kalawao............................................ 1.225
------------------------------------------------------------------------
(The above factors are based on data obtained from the U.S. Office of
Personnel Management.)
C. DRG Relative Weights
As discussed in section II of the preamble, we have developed a
classification system for all hospital discharges, assigning them into
DRGs, and have developed relative weights for each DRG that reflect the
resource utilization of cases in each DRG relative to Medicare cases in
other DRGs. Table 5 of section VI of this Addendum contains the
relative weights that we are proposing to use for discharges occurring
in FY 2001. These factors have been recalibrated as explained in
section II of the preamble.
D. Calculation of Prospective Payment Rates for FY 2001
General Formula for Calculation of Prospective Payment Rates for FY
2001
Prospective payment rate for all hospitals located outside of
Puerto Rico except sole community hospitals and Medicare-dependent,
small rural hospitals = Federal rate.
Prospective payment rate for sole community hospitals = Whichever
of the following rates yields the greatest aggregate payment: the
Federal national rate, the updated hospital-specific rate based on FY
1982 cost per discharge, the updated hospital-specific rate based on FY
1987 cost per discharge, or, if the sole community hospital was paid
for its cost reporting period beginning during FY 1999 on the basis of
either its FY 1982 or FY 1987 hospital-specific rate and elects
rebasing, 25 percent of its updated hospital-specific rate based on FY
1996 cost per discharge plus 75 percent of its updated FY 1982 or FY
1987 hospital-specific rate.
Prospective payment rate for Medicare-dependent, small rural
hospitals = 100 percent of the Federal rate, or, if the greater of the
updated FY 1982 hospital-specific rate or the updated FY 1987 hospital-
specific rate is higher than the Federal rate, 100 percent of the
Federal rate plus 50 percent of the difference between the applicable
hospital-specific rate and the Federal rate.
Prospective payment rate for Puerto Rico = 50 percent of the Puerto
Rico rate + 50 percent of a discharge-weighted average of the national
large urban standardized amount and the Federal national other
standardized amount.
1. Federal Rate
For discharges occurring on or after October 1, 2000 and before
October 1, 2001, except for sole community hospitals, Medicare-
dependent, small rural hospitals and hospitals in Puerto Rico, the
hospital's payment is based exclusively on the Federal national rate.
The payment amount is determined as follows:
Step 1--Select the appropriate national standardized amount
considering the type of hospital and designation of the hospital as
large urban or other (see Table 1A or 1E in section VI of this
Addendum).
Step 2--Multiply the labor-related portion of the standardized
amount by the applicable wage index for the geographic area in which
the hospital is located (see Tables 4A, 4B, and 4C of section VI of
this Addendum).
Step 3--For hospitals in Alaska and Hawaii, multiply the nonlabor-
related portion of the standardized amount by the appropriate cost-of-
living adjustment factor.
Step 4--Add the amount from Step 2 and the nonlabor-related portion
of the standardized amount (adjusted, if appropriate, under Step 3).
Step 5--Multiply the final amount from Step 4 by the relative
weight corresponding to the appropriate DRG (see Table 5 of section VI
of this Addendum).
2. Hospital-Specific Rate (Applicable Only to Sole Community Hospitals
and Medicare-Dependent, Small Rural Hospitals)
Section 1886(b)(3)(C) of the Act, as amended by section 405 of
Public Law 106-113, provides that sole community hospitals are paid
based on whichever of the following rates yields the greatest aggregate
payment: the Federal national rate, the updated hospital-specific rate
based on FY 1982 cost per discharge, the updated hospital-specific rate
based on FY 1987 cost per discharge, or, if the sole community hospital
was paid for its cost reporting period beginning during FY 1999 on the
basis of either its FY 1982 or FY 1987 hospital-specific
[[Page 26331]]
rate and elects rebasing, 25 percent of its updated hospital-specific
rate based on FY 1996 cost per discharge plus 75 percent of the updated
FY 1982 or FY 1987 hospital-specific rate.
Section 1886(d)(5)(G) of the Act, as amended by section 404 of
Public Law 106-113, provides that Medicare-dependent, small rural
hospitals are paid based on whichever of the following rates yields the
greatest aggregate payment: the Federal rate or the Federal rate plus
50 percent of the difference between the Federal rate and the greater
of the updated hospital-specific rate based on FY 1982 and FY 1987 cost
per discharge.
Hospital-specific rates have been determined for each of these
hospitals based on either the FY 1982 cost per discharge, the FY 1987
cost per discharge or, for qualifying sole community hospitals, the FY
1996 cost per discharge. For a more detailed discussion of the
calculation of the hospital-specific rates, we refer the reader to the
September 1, 1983 interim final rule (48 FR 39772); the April 20, 1990
final rule with comment (55 FR 15150); and the September 4, 1990 final
rule (55 FR 35994).
a. Updating the FY 1982 and FY 1987 Hospital-Specific Rates for FY 2001
We are proposing to increase the hospital-specific rates by 3.1
percent (the hospital market basket rate of increase) for sole
community hospitals and by 2.0 percent (the hospital market basket
percentage increase minus 1.1 percentage points) for Medicare-
dependent, small rural hospitals for FY 2001. Section 1886(b)(3)(C)(iv)
of the Act provides that the update factor applicable to the hospital-
specific rates for sole community hospitals equal the update factor
provided under section 1886(b)(3)(B)(iv) of the Act, which, for sole
community hospitals in FY 2001, is the market basket rate of increase.
Section 1886(b)(3)(D) of the Act provides that the update factor
applicable to the hospital-specific rates for Medicare-dependent, small
rural hospitals equal the update factor provided under section
1886(b)(3)(B)(iv) of the Act, which, for FY 2001, is the market basket
rate of increase minus 1.1 percentage points.
b. Calculation of Hospital-Specific Rate
For sole community hospitals, the applicable FY 2001 hospital-
specific rate would be the greater of the following: the hospital-
specific rate for the preceding fiscal year, increased by the
applicable update factor (3.1 percent); or, if the hospital qualifies
to rebase its hospital-specific rate based on cost per case in FY 1996
and elects rebasing, 75 percent of the hospital-specific rate for the
preceding fiscal year, increased by the applicable update factor, plus
25 percent of its rebased FY 1996 hospital-specific rate updated
through FY 2001. For Medicare-dependent, small rural hospitals, the
applicable FY 2001 hospital-specific rate would be calculated by
increasing the hospital's hospital-specific rate for the preceding
fiscal year by the applicable update factor (2.0 percent), which is the
same as the update for all prospective payment hospitals, except sole
community hospitals. In addition, the hospital-specific rate would be
adjusted by the budget neutrality adjustment factor (that is, 0.996506)
as discussed in section II.A.4.a. of this Addendum. The resulting rate
is used in determining under which rate a sole community hospital or
Medicare-dependent, small rural hospital is paid for its discharges
beginning on or after October 1, 2000, based on the formula set forth
above.
3. General Formula for Calculation of Prospective Payment Rates for
Hospitals Located in Puerto Rico Beginning On or After October 1, 2000
and Before October 1, 2001
a. Puerto Rico Rate
The Puerto Rico prospective payment rate is determined as follows:
Step 1--Select the appropriate adjusted average standardized amount
considering the large urban or other designation of the hospital (see
Table 1C of section VI of the Addendum).
Step 2--Multiply the labor-related portion of the standardized
amount by the appropriate Puerto Rico-specific wage index (see Table 4F
of section VI of the Addendum).
Step 3--Add the amount from Step 2 and the nonlabor-related portion
of the standardized amount.
Step 4--Multiply the result in Step 3 by 50 percent.
Step 5--Multiply the amount from Step 4 by the appropriate DRG
relative weight (see Table 5 of section VI of the Addendum).
b. National Rate
The national prospective payment rate is determined as follows:
Step 1--Multiply the labor-related portion of the national average
standardized amount (see Table 1C of section VI of the Addendum) by the
appropriate national wage index (see Tables 4A and 4B of section VI of
the Addendum).
Step 2--Add the amount from Step 1 and the nonlabor-related portion
of the national average standardized amount.
Step 3--Multiply the result in Step 2 by 50 percent.
Step 4--Multiply the amount from Step 3 by the appropriate DRG
relative weight (see Table 5 of section VI of the Addendum).
The sum of the Puerto Rico rate and the national rate computed
above equals the prospective payment for a given discharge for a
hospital located in Puerto Rico.
III. Changes to the Payment Rates for Blood Clotting Factor for
Hemophilia Inpatients
For the past 2 years in the Federal Register (63 FR 41010 and 64 FR
41549), we have discussed section 4452 of Public Law 105-33, which
amended section 6011(d) of Public Law 101-239 to reinstate the add-on
payment for the costs of administering blood clotting factor to
Medicare beneficiaries who have hemophilia and who are hospital
inpatients for discharges occurring on or after October 1, 1997. In
these prior rules, we have described the payment policy and
specifically listed the updated add-on payment amounts for each
clotting factor, as described by HCFA's Common Procedure Coding System
(HCPCS). Because we are not changing the policy established 2 years
ago, we are proposing to discontinue listing these amounts in the
annual proposed and final rules. Instead, the program manuals will
instruct fiscal intermediaries to follow this policy and obtain the
average wholesale price (AWP) for each relevant HCPCS from either their
corresponding local carrier or the Medicare durable medical equipment
regional carrier (DMERC) that has jurisdiction in their area. Carriers
already calculate the AWP based on the median AWP of the several
products available in each category of factor. The payment amount for
clotting factors covered by this inpatient benefit is equal to 85
percent of the AWP, subject to the Part A deductible and coinsurance
requirements.
The payment amounts will be determined using the most recent AWP
data available to the carrier at the time the intermediary performs
these annual update calculations. These amounts are updated annually
and are effective for discharges beginning on or after October 1 of the
current year through September 30 of the following year. Payment will
be made for blood clotting factor only if there is an ICD-9-CM
diagnosis code for hemophilia included on the bill.
[[Page 26332]]
IV. Proposed Changes to Payment Rates for Inpatient Capital-Related
Costs for FY 2001
The prospective payment system for hospital inpatient capital-
related costs was implemented for cost reporting periods beginning on
or after October 1, 1991. Effective with that cost reporting period and
during a 10-year transition period extending through FY 2001, hospital
inpatient capital-related costs are paid on the basis of an increasing
proportion of the capital prospective payment system Federal rate and a
decreasing proportion of a hospital's historical costs for capital.
The basic methodology for determining Federal capital prospective
rates is set forth at Secs. 412.308 through 412.352. Below we discuss
the factors that we used to determine the proposed Federal rate and the
hospital-specific rates for FY 2001. The rates will be effective for
discharges occurring on or after October 1, 2000.
For FY 1992, we computed the standard Federal payment rate for
capital-related costs under the prospective payment system by updating
the FY 1989 Medicare inpatient capital cost per case by an actuarial
estimate of the increase in Medicare inpatient capital costs per case.
Each year after FY 1992, we update the standard Federal rate, as
provided in Sec. 412.308(c)(1), to account for capital input price
increases and other factors. Also, Sec. 412.308(c)(2) provides that the
Federal rate is adjusted annually by a factor equal to the estimated
proportion of outlier payments under the Federal rate to total capital
payments under the Federal rate. In addition, Sec. 412.308(c)(3)
requires that the Federal rate be reduced by an adjustment factor equal
to the estimated proportion of payments for exceptions under
Sec. 412.348. Furthermore, Sec. 412.308(c)(4)(ii) requires that the
Federal rate be adjusted so that the annual DRG reclassification and
the recalibration of DRG weights and changes in the geographic
adjustment factor are budget neutral. For FYs 1992 through 1995,
Sec. 412.352 required that the Federal rate also be adjusted by a
budget neutrality factor so that aggregate payments for inpatient
hospital capital costs were projected to equal 90 percent of the
payments that would have been made for capital-related costs on a
reasonable cost basis during the fiscal year. That provision expired in
FY 1996. Section 412.308(b)(2) describes the 7.4 percent reduction to
the rate that was made in FY 1994, and Sec. 412.308(b)(3) describes the
0.28 percent reduction to the rate made in FY 1996 as a result of the
revised policy of paying for transfers. In the FY 1998 final rule with
comment period (62 FR 45966), we implemented section 4402 of Public Law
105-33, which requires that for discharges occurring on or after
October 1, 1997, and before October 1, 2002, the unadjusted standard
Federal rate is reduced by 17.78 percent. A small part of that
reduction will be restored effective October 1, 2002.
For each hospital, the hospital-specific rate was calculated by
dividing the hospital's Medicare inpatient capital-related costs for a
specified base year by its Medicare discharges (adjusted for
transfers), and dividing the result by the hospital's case mix index
(also adjusted for transfers). The resulting case-mix adjusted average
cost per discharge was then updated to FY 1992 based on the national
average increase in Medicare's inpatient capital cost per discharge and
adjusted by the exceptions payment adjustment factor and the budget
neutrality adjustment factor to yield the FY 1992 hospital-specific
rate. Since FY 1992, the hospital-specific rate has been updated
annually for inflation and for changes in the exceptions payment
adjustment factor. For FYs 1992 through 1995, the hospital-specific
rate was also adjusted by a budget neutrality adjustment factor. For
discharges occurring on or after October 1, 1997, and before October 1,
2002, the unadjusted hospital-specific rate is reduced by 17.78
percent. A small part of this reduction will be restored effective
October 1, 2002.
To determine the appropriate budget neutrality adjustment factor
and the exceptions payment adjustment factor, we developed a dynamic
model of Medicare inpatient capital-related costs, that is, a model
that projects changes in Medicare inpatient capital-related costs over
time. With the expiration of the budget neutrality provision, the model
is still used to estimate the exceptions payment adjustment and other
factors. The model and its application are described in greater detail
in Appendix B of this proposed rule.
In accordance with section 1886(d)(9)(A) of the Act, under the
prospective payment system for inpatient operating costs, hospitals
located in Puerto Rico are paid for operating costs under a special
payment formula. Prior to FY 1998, hospitals in Puerto Rico were paid a
blended rate that consisted of 75 percent of the applicable
standardized amount specific to Puerto Rico hospitals and 25 percent of
the applicable national average standardized amount. However, effective
October 1, 1997, as a result of section 4406 of Public Law 105-33,
operating payments to hospitals in Puerto Rico are based on a blend of
50 percent of the applicable standardized amount specific to Puerto
Rico hospitals and 50 percent of the applicable national average
standardized amount. In conjunction with this change to the operating
blend percentage, effective with discharges on or after October 1,
1997, we compute capital payments to hospitals in Puerto Rico based on
a blend of 50 percent of the Puerto Rico rate and 50 percent of the
Federal rate.
Section 412.374 provides for the use of this blended payment system
for payments to Puerto Rico hospitals under the prospective payment
system for inpatient capital-related costs. Accordingly, for capital-
related costs, we compute a separate payment rate specific to Puerto
Rico hospitals using the same methodology used to compute the national
Federal rate for capital.
A. Determination of Federal Inpatient Capital-Related Prospective
Payment Rate Update
In the July 30, 1999 final rule (64 FR 41551), we established a
Federal rate of $377.03 for FY 2000. As a result of the changes we are
proposing to the factors used to establish the Federal rate in this
addendum, the proposed FY 2001 Federal rate is $383.06.
In the discussion that follows, we explain the factors that were
used to determine the proposed FY 2001 Federal rate. In particular, we
explain why the proposed FY 2001 Federal rate has increased 1.60
percent compared to the FY 2000 Federal rate. We also estimate
aggregate capital payments will increase by 5.89 percent during this
same period. This increase is primarily due to the increase in the
number of hospital admissions, the increase in case-mix, and the
increase in the Federal blend percentage from 90 to 100 percent for
fully prospective payment hospitals.
Total payments to hospitals under the prospective payment system
are relatively unaffected by changes in the capital prospective
payments. Since capital payments constitute about 10 percent of
hospital payments, a 1 percent change in the capital Federal rate
yields only about 0.1 percent change in actual payments to hospitals.
Aggregate payments under the capital prospective payment transition
system are estimated to increase in FY 2001 compared to FY 2000.
1. Standard Federal Rate Update
a. Description of the Update Framework
Under Sec. 412.308(c)(1), the standard Federal rate is updated on
the basis of
[[Page 26333]]
an analytical framework that takes into account changes in a capital
input price index and other factors. The update framework consists of a
capital input price index (CIPI) and several policy adjustment factors.
Specifically, we have adjusted the projected CIPI rate of increase as
appropriate each year for case-mix index-related changes, for
intensity, and for errors in previous CIPI forecasts. The proposed
update factor for FY 2001 under that framework is 0.9 percent. This
proposal is based on a projected 0.9 percent increase in the CIPI, a
0.0 percent adjustment for intensity, a 0.0 percent adjustment for
case-mix, a 0.0 percent adjustment for the FY 1999 DRG reclassification
and recalibration, and a forecast error correction of 0.0 percent. We
explain the basis for the FY 2001 CIPI projection in section II.D of
this Addendum. In this section IV of the Addendum, we describe the
policy adjustments that have been applied.
The case-mix index is the measure of the average DRG weight for
cases paid under the prospective payment system. Because the DRG weight
determines the prospective payment for each case, any percentage
increase in the case-mix index corresponds to an equal percentage
increase in hospital payments.
The case-mix index can change for any of several reasons:
The average resource use of Medicare patients changes
(``real'' case-mix change);
Changes in hospital coding of patient records result in
higher weight DRG assignments (``coding effects''); and
The annual DRG reclassification and recalibration changes
may not be budget neutral (``reclassification effect'').
We define real case-mix change as actual changes in the mix (and
resource requirements) of Medicare patients as opposed to changes in
coding behavior that result in assignment of cases to higher weighted
DRGs but do not reflect higher resource requirements. In the update
framework for the prospective payment system for operating costs, we
adjust the update upwards to allow for real case-mix change, but remove
the effects of coding changes on the case-mix index. We also remove the
effect on total payments of prior changes to the DRG classifications
and relative weights, in order to retain budget neutrality for all
case-mix index-related changes other than patient severity. (For
example, we adjusted for the effects of the FY 1999 DRG
reclassification and recalibration as part of our FY 2001 update
recommendation.) We have adopted this case-mix index adjustment in the
capital update framework as well.
For FY 2001, we are projecting a 0.5 percent increase in the case-
mix index. We estimate that real case-mix increase will equal 0.5
percent in FY 2001. Therefore, the proposed net adjustment for case-mix
change in FY 2001 is 0.0 percentage points.
We estimate that FY 1999 DRG reclassification and recalibration
will result in a 0.0 percent change in the case-mix when compared with
the case-mix index that would have resulted if we had not made the
reclassification and recalibration changes to the DRGs. Therefore, we
are making a 0.0 percent adjustment for DRG reclassification and
recalibration in the update recommendation for FY 2001.
The capital update framework contains an adjustment for forecast
error. The input price index forecast is based on historical trends and
relationships ascertainable at the time the update factor is
established for the upcoming year. In any given year there may be
unanticipated price fluctuations that may result in differences between
the actual increase in prices and the forecast used in calculating the
update factors. In setting a prospective payment rate under the
framework, we make an adjustment for forecast error only if our
estimate of the change in the capital input price index for any year is
off by 0.25 percentage points or more. There is a 2-year lag between
the forecast and the measurement of the forecast error. A forecast
error of 0.0 percentage points was calculated for the FY 1999 update.
That is, current historical data indicate that the FY 1999 CIPI used in
calculating the forecasted FY 1999 update factor did not overstate or
understate realized price increases. Therefore, we are making a 0.0
percent adjustment for forecast error in the update for FY 2001.
Under the capital prospective payment system framework, we also
make an adjustment for changes in intensity. We calculate this
adjustment using the same methodology and data as in the framework for
the operating prospective payment system. The intensity factor for the
operating update framework reflects how hospital services are utilized
to produce the final product, that is, the discharge. This component
accounts for changes in the use of quality-enhancing services, changes
in within-DRG severity, and expected modification of practice patterns
to remove cost-ineffective services.
We calculate case-mix constant intensity as the change in total
charges per admission, adjusted for price level changes (the CPI for
hospital and related services), and changes in real case-mix. The use
of total charges in the calculation of the proposed intensity factor
makes it a total intensity factor, that is, charges for capital
services are already built into the calculation of the factor.
Therefore, we have incorporated the intensity adjustment from the
operating update framework into the capital update framework. Without
reliable estimates of the proportions of the overall annual intensity
increases that are due, respectively, to ineffective practice patterns
and to the combination of quality-enhancing new technologies and
within-DRG complexity, we assume, as in the revised operating update
framework, that one-half of the annual increase is due to each of these
factors. The capital update framework thus provides an add-on to the
input price index rate of increase of one-half of the estimated annual
increase in intensity to allow for within-DRG severity increases and
the adoption of quality-enhancing technology.
For FY 2001, we have developed a Medicare-specific intensity
measure based on a 5-year average using FY 1995 through 1999 data. In
determining case-mix constant intensity, we found that observed case-
mix increase was 1.7 percent in FY 1995, 1.6 percent in FY 1996, 0.3
percent in FY 1997,-0.4 percent in FY 1998, and -0.3 in FY 1999. For FY
1995 and FY 1996, we estimate that real case-mix increase was 1.0 to
1.4 percent each year. The estimate for those years is supported by
past studies of case-mix change by the RAND Corporation. The most
recent study was ``Has DRG Creep Crept Up? Decomposing the Case Mix
Index Change Between 1987 and 1988'' by G.M. Carter, J.P. Newhouse, and
D.A. Relles, R-4098-HCFA/ProPAC (1991). The study suggested that real
case-mix change was not dependent on total change, but was usually a
fairly steady 1.0 to 1.5 percent per year. We use 1.4 percent as the
upper bound because the RAND study did not take into account that
hospitals may have induced doctors to document medical records more
completely in order to improve payment. Following that study, we
consider up to 1.4 percent of observed case-mix change as real for FY
1995 through FY 1999. Based on this analysis, we believe that all of
the observed case-mix increase for FY 1997, FY 1998, and FY 1999 is
real. The increases for FY 1995 and FY 1996 were in excess of our
estimate of real case-mix increase.
We calculate case-mix constant intensity as the change in total
charges per admission, adjusted for price level
[[Page 26334]]
changes (the CPI for hospital and related services), and changes in
real case-mix. Given estimates of real case-mix of 1.0 percent for FY
1995, 1.0 percent for FY 1996, 0.3 percent for FY 1997, -0.4 for FY
1998, and -0.3 for FY 1999, we estimate that case-mix constant
intensity declined by an average 0.7 percent during FYs 1995 through
1999, for a cumulative decrease of 3.6 percent. If we assume that real
case-mix increase was 1.4 percent for FY 1995, 1.4 percent for FY 1996,
0.3 percent for FY 1997, -0.4 for FY 1998, and -0.3 for FY 1999, we
estimate that case-mix constant intensity declined by an average 0.9
percent during FYs 1995 through 1999, for a cumulative decrease of 4.5
percent. Since we estimate that intensity has declined during that
period, we are recommending a 0.0 percent intensity adjustment for FY
2001. We note that the operating recommendation addressed in Appendix D
of this proposed rule reflects the possible range that a negative
adjustment could span (-0.6 percent to 0.0 percent adjustment) based on
our analyses that intensity has declined during that 5-year period.
While the calculation of the adjustment for intensity is identical in
both the capital and the operating update frameworks, consistent with
past capital update recommendations and the FY 2001 proposed operating
recommendation, we are not making a negative adjustment for intensity
in the FY 2001 proposed capital update.
b. Comparison of HCFA and MedPAC Update Recommendations
MedPAC's FY 2001 update recommendation for capital prospective
payments was not included in its March 2000 Report to Congress.
However, MedPAC did announce at its April 13, 2000 public meeting that
it was recommending a combined update of between 3.5 percent and 4.0
percent for operating and capital-related payments for FY 2001. This
recommendation is higher than the current law amount as prescribed by
Public Law 105-33. Because of the timing of the announcement and our
need for ample time to perform a proper analysis of the recommendation,
we will address the comparison of HCFA's update recommendation and
MedPAC's update recommendation in the FY 2001 final rule in August 2000
when we will have had the opportunity to review the data analyses that
substantiate MedPAC's recommendation.
In section IV.A.l.a. of this Addendum, we describe the basis of the
components used to develop our proposed 0.9 percent FY 2001 capital
update factor as shown in Table 1 below.
Table 1.--HCFA's Proposed FY 2001 Capital Update Factor
------------------------------------------------------------------------
------------------------------------------------------------------------
Capital Input Price Index.................................... 0.9
Intensity.................................................... 0.0
Case-Mix Adjustment Factors:
Projected Case-Mix Change................................ -0.5
Real Across DRG Change................................... 0.5
----------
Subtotal............................................. 0.0
Effect of FY 1999 Reclassification and Recalibration......... 0.0
Forecast Error Correction.................................... 0.0
Total Update................................................. 0.9
------------------------------------------------------------------------
2. Outlier Payment Adjustment Factor
Section 412.312(c) establishes a unified outlier methodology for
inpatient operating and inpatient capital-related costs. A single set
of thresholds is used to identify outlier cases for both inpatient
operating and inpatient capital-related payments. Outlier payments are
made only on the portion of the Federal rate that is used to calculate
the hospital's inpatient capital-related payments (for example, 100
percent for cost reporting periods beginning in FY 2001 for hospitals
paid under the fully prospective payment methodology). Section
412.308(c)(2) provides that the standard Federal rate for inpatient
capital-related costs be reduced by an adjustment factor equal to the
estimated proportion of outlier payments under the Federal rate to
total inpatient capital-related payments under the Federal rate. The
outlier thresholds are set so that operating outlier payments are
projected to be 5.1 percent of total operating DRG payments. The
inpatient capital-related outlier reduction factor reflects the
inpatient capital-related outlier payments that would be made if all
hospitals were paid 100 percent of the Federal rate. For purposes of
calculating the outlier thresholds and the outlier reduction factor, we
model payments as if all hospitals were paid 100 percent of the Federal
rate because, as explained above, outlier payments are made only on the
portion of the Federal rate that is included in the hospital's
inpatient capital-related payments.
In the July 30, 1999 final rule, we estimated that outlier payments
for capital in FY 2000 would equal 5.98 percent of inpatient capital-
related payments based on the Federal rate (64 FR 41553). Accordingly,
we applied an outlier adjustment factor of 0.9402 to the Federal rate.
Based on the thresholds as set forth in section II.A.4.d. of this
Addendum, we estimate that outlier payments for capital will equal 5.84
percent of inpatient capital-related payments based on the Federal rate
in FY 2001. Therefore, we are proposing an outlier adjustment factor of
0.9416 to the Federal rate. Thus, the projected percentage of capital
outlier payments to total capital standard payments for FY 2001 is
lower than the percentage for FY 2000.
The outlier reduction factors are not built permanently into the
rates; that is, they are not applied cumulatively in determining the
Federal rate. Therefore, the proposed net change in the outlier
adjustment to the Federal rate for FY 2001 is 1.0015 (0.9416/0.9402).
The outlier adjustment increases the FY 2001 Federal rate by 0.15
percent compared with the FY 2000 outlier adjustment.
3. Budget Neutrality Adjustment Factor for Changes in DRG
Classifications and Weights and the Geographic Adjustment Factor
Section 412.308(c)(4)(ii) requires that the Federal rate be
adjusted so that aggregate payments for the fiscal year based on the
Federal rate after any changes resulting from the annual DRG
reclassification and recalibration and changes in the GAF are projected
to equal aggregate payments that would have been made on the basis of
the Federal rate without such changes. We use the actuarial model,
described in Appendix B of this proposed rule, to estimate the
aggregate payments that would have been made on the basis of the
Federal rate without changes in the DRG classifications and weights and
in the GAF. We also use the model to estimate aggregate payments that
would be made on the basis of the Federal rate as a result of those
changes. We then use these figures to compute the adjustment required
to maintain budget neutrality for changes in DRG weights and in the
GAF.
For FY 2000, we calculated a GAF/DRG budget neutrality factor of
0.9985. For FY 2001, we are proposing a GAF/DRG budget neutrality
factor of 0.9986. The GAF/DRG budget neutrality factors are built
permanently into the rates; that is, they are applied cumulatively in
determining the Federal rate. This follows from the requirement that
estimated aggregate payments each year be no more than they would have
been in the absence of the annual DRG reclassification and
recalibration and changes in the GAF. The proposed incremental change
in the adjustment from FY 2000 to FY 2001 is 0.9986. The proposed
cumulative change in the rate due to this adjustment is 1.0060 (the
product of the incremental factors for FY 1993, FY 1994, FY 1995, FY
1996,
[[Page 26335]]
FY 1997, FY 1998, FY 1999, FY 2000, and the proposed incremental factor
for FY 2001:
0.9980 x 1.0053 x 0.9998
x 0.9994 x 0.9987 x 0.9989
x 1.0028 x 0.9985 x 0.9986 = 1.0000).
This proposed factor accounts for DRG reclassifications and
recalibration and for changes in the GAF. It also incorporates the
effects on the GAF of FY 2001 geographic reclassification decisions
made by the MGCRB compared to FY 2000 decisions. However, it does not
account for changes in payments due to changes in the DSH and IME
adjustment factors or in the large urban add-on.
4. Exceptions Payment Adjustment Factor
Section 412.308(c)(3) requires that the standard Federal rate for
inpatient capital-related costs be reduced by an adjustment factor
equal to the estimated proportion of additional payments for exceptions
under Sec. 412.348 relative to total payments under the hospital-
specific rate and Federal rate. We use the model originally developed
for determining the budget neutrality adjustment factor to determine
the exceptions payment adjustment factor. We describe that model in
Appendix B to this proposed rule.
For FY 2000, we estimated that exceptions payments would equal 2.70
percent of aggregate payments based on the Federal rate and the
hospital-specific rate. Therefore, we applied an exceptions reduction
factor of 0.9730 (1-0.0270) in determining the Federal rate. For this
proposed rule, we estimate that exceptions payments for FY 2001 will
equal 2.04 percent of aggregate payments based on the Federal rate and
the hospital-specific rate. Therefore, we are proposing an exceptions
payment reduction factor of 0.9796 to the Federal rate for FY 2001. The
proposed exceptions reduction factor for FY 2001 is 0.68 percent higher
than the factor for FY 2000.
The exceptions reduction factors are not built permanently into the
rates; that is, the factors are not applied cumulatively in determining
the Federal rate. Therefore, the proposed net adjustment to the FY 2001
Federal rate is 0.9796/0.9730, or 1.0068.
5. Standard Capital Federal Rate for FY 2001
For FY 2000, the capital Federal rate was $377.03. As a result of
changes we are proposing to the factors used to establish the Federal
rate, the proposed FY 2001 Federal rate is $383.06. The proposed
Federal rate for FY 2001 was calculated as follows:
The proposed FY 2001 update factor is 1.0090; that is, the
proposed update is 0.90 percent.
The proposed FY 2001 budget neutrality adjustment factor
that is applied to the standard Federal payment rate for changes in the
DRG relative weights and in the GAF is 0.9986.
The proposed FY 2001 outlier adjustment factor is 0.9416.
The proposed FY 2001 exceptions payments adjustment factor
is 0.9796.
Since the Federal rate has already been adjusted for differences in
case-mix, wages, cost-of-living, indirect medical education costs, and
payments to hospitals serving a disproportionate share of low-income
patients, we propose to make no additional adjustments in the standard
Federal rate for these factors other than the budget neutrality factor
for changes in the DRG relative weights and the GAF.
We are providing a chart that shows how each of the factors and
adjustments for FY 2001 affected the computation of the proposed FY
2001 Federal rate in comparison to the FY 2000 Federal rate. The
proposed FY 2001 update factor has the effect of increasing the Federal
rate by 0.90 percent compared to the rate in FY 2000, while the
proposed geographic and DRG budget neutrality factor has the effect of
decreasing the Federal rate by 0.14 percent. The proposed FY 2001
outlier adjustment factor has the effect of increasing the Federal rate
by 0.15 percent compared to FY 2000. The proposed FY 2001 exceptions
reduction factor has the effect of increasing the Federal rate by 0.68
percent compared to the exceptions reduction for FY 2000. The combined
effect of all the proposed changes is to increase the proposed Federal
rate by 1.60 percent compared to the Federal rate for FY 2000.
Comparison of Factors and Adjustments: FY 2000 Federal Rate and Proposed FY 2001 Federal Rate
----------------------------------------------------------------------------------------------------------------
Proposed FY Percent
FY 2000 2001 Change change
----------------------------------------------------------------------------------------------------------------
Update factor \1\............................... 1.0030 1.0090 1.0090 0.90
GAF/DRG Adjustment Factor\1\.................... 0.9985 0.9986 0.9986 -0.14
Outlier Adjustment Factor\2\.................... 0.9402 0.9416 1.0015 0.15
Exceptions Adjustment Factor\2\................. 0.9730 0.9796 1.0068 0.68
Federal Rate.................................... $377.03 $383.06 1.0160 1.60
----------------------------------------------------------------------------------------------------------------
\1\ The update factor and the GAF/DRG budget neutrality factors are built permanently into the rates. Thus, for
example, the incremental change from FY 2000 to FY 2001 resulting from the application of the 0.9986 GAF/DRG
budget neutrality factor for FY 2001 is 0.9986.
\2\ The outlier reduction factor and the exceptions reduction factor are not built permanently into the rates;
that is, these factors are not applied cumulatively in determining the rates. Thus, for example, the net
change resulting from the application of the FY 2001 outlier reduction factor is 0.9416/0.9402, or 1.0015.
6. Special Rate for Puerto Rico Hospitals
As explained at the beginning of section IV of this Addendum,
hospitals in Puerto Rico are paid based on 50 percent of the Puerto
Rico rate and 50 percent of the Federal rate. The Puerto Rico rate is
derived from the costs of Puerto Rico hospitals only, while the Federal
rate is derived from the costs of all acute care hospitals
participating in the prospective payment system (including Puerto
Rico). To adjust hospitals' capital payments for geographic variations
in capital costs, we apply a geographic adjustment factor (GAF) to both
portions of the blended rate. The GAF is calculated using the operating
prospective payment system wage index and varies depending on the MSA
or rural area in which the hospital is located. We use the Puerto Rico
wage index to determine the GAF for the Puerto Rico part of the
capital-blended rate and the national wage index to determine the GAF
for the national part of the blended rate.
Since we implemented a separate GAF for Puerto Rico in FY 1998, we
also apply separate budget neutrality adjustments for the national GAF
and for the Puerto Rico GAF. However, we apply the same budget
neutrality factor for DRG reclassifications and recalibration
nationally and for Puerto Rico. The Puerto Rico GAF budget
[[Page 26336]]
neutrality factor is 1.0031, while the DRG adjustment is 1.0002, for a
combined cumulative adjustment of 1.0033.
In computing the payment for a particular Puerto Rico hospital, the
Puerto Rico portion of the rate (50 percent) is multiplied by the
Puerto Rico-specific GAF for the MSA in which the hospital is located,
and the national portion of the rate (50 percent) is multiplied by the
national GAF for the MSA in which the hospital is located (which is
computed from national data for all hospitals in the United States and
Puerto Rico). In FY 1998, we implemented a 17.78 percent reduction to
the Puerto Rico rate as a result of Public Law 105-33.
For FY 2000, before application of the GAF, the special rate for
Puerto Rico hospitals was $174.81. With the changes we are proposing to
the factors used to determine the rate, the proposed FY 2001 special
rate for Puerto Rico is $185.38.
B. Calculation of Inpatient Capital-Related Prospective Payments for FY
2001
During the capital prospective payment system transition period, a
hospital is paid for the inpatient capital-related costs under one of
two payment methodologies--the fully prospective payment methodology or
the hold-harmless methodology. The payment methodology applicable to a
particular hospital is determined when a hospital comes under the
prospective payment system for capital-related costs by comparing its
hospital-specific rate to the Federal rate applicable to the hospital's
first cost reporting period under the prospective payment system. The
applicable Federal rate was determined by making adjustments as
follows:
For outliers, by dividing the standard Federal rate by the
outlier reduction factor for that fiscal year; and
For the payment adjustments applicable to the hospital, by
multiplying the hospital's GAF, disproportionate share adjustment
factor, and IME adjustment factor, when appropriate.
If the hospital-specific rate is above the applicable Federal rate,
the hospital is paid under the hold-harmless methodology. If the
hospital-specific rate is below the applicable Federal rate, the
hospital is paid under the fully prospective methodology.
For purposes of calculating payments for each discharge under both
the hold-harmless payment methodology and the fully prospective payment
methodology, the standard Federal rate is adjusted as follows:
(Standard Federal Rate) x (DRG weight) x (GAF) x (Large Urban
Add-on, if applicable) x (COLA adjustment for hospitals located in
Alaska and Hawaii) x (1 + Disproportionate Share Adjustment Factor +
IME Adjustment Factor, if applicable).
The result is the adjusted Federal rate.
Payments under the hold-harmless methodology are determined under
one of two formulas. A hold-harmless hospital is paid the higher of the
following:
100 percent of the adjusted Federal rate for each
discharge; or
An old capital payment equal to 85 percent (100 percent
for sole community hospitals) of the hospital's allowable Medicare
inpatient old capital costs per discharge for the cost reporting period
plus a new capital payment based on a percentage of the adjusted
Federal rate for each discharge. The percentage of the adjusted Federal
rate equals the ratio of the hospital's allowable Medicare new capital
costs to its total Medicare inpatient capital-related costs in the cost
reporting period.
Once a hospital receives payment based on 100 percent of the
adjusted Federal rate in a cost reporting period beginning on or after
October 1, 1994 (or the first cost reporting period after obligated
capital that is recognized as old capital under Sec. 412.302(c) is put
in use for patient care, if later), the hospital continues to receive
capital prospective payment system payments on that basis for the
remainder of the transition period.
Payment for each discharge under the fully prospective methodology
is based on the applicable transition blend percentage of the hospital-
specific rate and the adjusted Federal rate.
Thus, for FY 2001 payments under the fully prospective methodology
will be based on 100 percent of the adjusted Federal rate and zero
percent of the hospital-specific rate.
Hospitals also may receive outlier payments for those cases that
qualify under the thresholds established for each fiscal year. Section
412.312(c) provides for a single set of thresholds to identify outlier
cases for both inpatient operating and inpatient capital-related
payments. Outlier payments are made only on that portion of the Federal
rate that is used to calculate the hospital's inpatient capital-related
payments. For fully prospective hospitals, that portion is 100 percent
of the Federal rate for discharges occurring in cost reporting periods
beginning during FY 2001. Thus, a fully prospective hospital will
receive 100 percent of the capital-related outlier payment calculated
for the case for discharges occurring in cost reporting periods
beginning in FY 2001. For hold-harmless hospitals that are paid 85
percent of their reasonable costs for old inpatient capital, the
portion of the Federal rate that is included in the hospital's outlier
payments is based on the hospital's ratio of Medicare inpatient costs
for new capital to total Medicare inpatient capital costs. For hold-
harmless hospitals that are paid 100 percent of the Federal rate, 100
percent of the Federal rate is included in the hospital's outlier
payments.
The proposed outlier thresholds for FY 2001 are in section
II.A.4.c. of this Addendum. For FY 2001, a case qualifies as a cost
outlier if the cost for the case (after standardization for the
indirect teaching adjustment and disproportionate share adjustment) is
greater than the prospective payment rate for the DRG plus $17,250.
During the capital prospective payment system transition period, a
hospital also may receive an additional payment under an exceptions
process if its total inpatient capital-related payments are less than a
minimum percentage of its allowable Medicare inpatient capital-related
costs. The minimum payment level is established by class of hospital
under Sec. 412.348. The proposed minimum payment levels for portions of
cost reporting periods occurring in FY 2001 are:
Sole community hospitals (located in either an urban or
rural area), 90 percent;
Urban hospitals with at least 100 beds and a
disproportionate share patient percentage of at least 20.2 percent or
that receive more than 30 percent of their net inpatient care revenues
from State or local governments for indigent care, 80 percent; and
All other hospitals, 70 percent.
Under Sec. 412.348(d), the amount of the exceptions payment is
determined by comparing the cumulative payments made to the hospital
under the capital prospective payment system to the cumulative minimum
payment levels applicable to the hospital for each cost reporting
period subject to that system. Any amount by which the hospital's
cumulative payments exceed its cumulative minimum payment is deducted
from the additional payment that would otherwise be payable for a cost
reporting period. New hospitals are exempted from the capital
prospective payment system for their first 2 years of operation and are
paid 85 percent of their reasonable costs during that period. A new
hospital's old capital costs are its allowable costs for capital assets
that were put in use for patient care on or before the later of
December
[[Page 26337]]
31, 1990, or the last day of the hospital's base year cost reporting
period, and are subject to the rules pertaining to old capital and
obligated capital as of the applicable date. Effective with the third
year of operation, we will pay the hospital under either the fully
prospective methodology, using the appropriate transition blend in that
Federal fiscal year, or the hold-harmless methodology. If the hold-
harmless methodology is applicable, the hold-harmless payment for
assets in use during the base period would extend for 8 years, even if
the hold-harmless payments extend beyond the normal transition period.
C. Capital Input Price Index
1. Background
Like the operating input price index, the capital input price index
(CIPI) is a fixed-weight price index that measures the price changes
associated with costs during a given year. The CIPI differs from the
operating input price index in one important aspect--the CIPI reflects
the vintage nature of capital, which is the acquisition and use of
capital over time. Capital expenses in any given year are determined by
the stock of capital in that year (that is, capital that remains on
hand from all current and prior capital acquisitions). An index
measuring capital price changes needs to reflect this vintage nature of
capital. Therefore, the CIPI was developed to capture the vintage
nature of capital by using a weighted-average of past capital purchase
prices up to and including the current year.
Using Medicare cost reports, American Hospital Association (AHA)
data, and Securities Data Company data, a vintage-weighted price index
was developed to measure price increases associated with capital
expenses. We periodically update the base year for the operating and
capital input prices to reflect the changing composition of inputs for
operating and capital expenses. Currently, the CIPI is based to FY 1992
and was last rebased in 1997. The most recent explanation of the CIPI
was discussed in the final rule with comment period for FY 1998
published on August 29, 1997 (62 FR 46050).
2. Forecast of the CIPI for Federal Fiscal Year 2001
We are forecasting the CIPI to increase 0.9 percent for FY 2001.
This reflects a projected 1.5 percent increase in vintage-weighted
depreciation prices (building and fixed equipment, and movable
equipment) and a 3.5 percent increase in other capital expense prices
in FY 2001, partially offset by a 1.3 percent decline in vintage-
weighted interest rates in FY 2001. The weighted average of these three
factors produces the 0.9 percent increase for the CIPI as a whole.
V. Proposed Changes to Payment Rates for Excluded Hospitals and
Hospital Units: Rate-of-Increase Percentages
The inpatient operating costs of hospitals and hospital units
excluded from the prospective payment system are subject to rate-of-
increase limits established under the authority of section 1886(b) of
the Act, which is implemented in regulations at Sec. 413.40. Under
these limits, a hospital-specific target amount (expressed in terms of
the inpatient operating cost per discharge) is set for each hospital,
based on the hospital's own historical cost experience trended forward
by the applicable rate-of-increase percentages (update factors). In the
case of a psychiatric hospital or hospital unit, a rehabilitation
hospital or hospital unit, or a long-term care hospital, the target
amount may not exceed the updated figure for the 75th percentile of
target amounts adjusted to take into account differences between
average wage-related costs in the area of the hospital and the national
average of such costs within the same class of hospital for hospitals
and units in the same class (psychiatric, rehabilitation, and long-term
care) for cost reporting periods ending during FY 1996. The target
amount is multiplied by the number of Medicare discharges in a
hospital's cost reporting period, yielding the ceiling on aggregate
Medicare inpatient operating costs for the cost reporting period.
Each hospital-specific target amount is adjusted annually, at the
beginning of each hospital's cost reporting period, by an applicable
update factor.
Section 1886(b)(3)(B) of the Act, which is implemented in
regulations at Sec. 413.40(c)(3)(vii), provides that for cost reporting
periods beginning on or after October 1, 1998 and before October 1,
2002, the update factor for a hospital or unit depends on the
hospital's or hospital unit's costs in relation to the ceiling for the
most recent cost reporting period for which information is available.
For hospitals with costs exceeding the ceiling by 10 percent or more,
the update factor is the market basket increase. For hospitals with
costs exceeding the ceiling by less than 10 percent, the update factor
is the market basket minus .25 percent for each percentage point by
which costs are less than 10 percent over the ceiling. For hospitals
with costs equal to or less than the ceiling but greater than 66.7
percent of the ceiling, the update factor is the greater of 0 percent
or the market basket minus 2.5 percent. For hospitals with costs that
do not exceed 66.7 percent of the ceiling, the update factor is 0.
The most recent forecast of the market basket increase for FY 2001
for hospitals and hospital units excluded from the prospective payment
system is 3.1 percent. Therefore, the update to a hospital's target
amount for its cost reporting period beginning in FY 2001 would be
between 0.6 and 3.1 percent, or 0 percent, depending on the hospital's
or unit's costs in relation to its rate-of-increase limit.
In addition, Sec. 413.40(c)(4)(iii) requires that for cost
reporting periods beginning on or after October 1, 1998 and before
October 1, 2002, the target amount for each psychiatric hospital or
hospital unit, rehabilitation hospital or hospital unit, and long-term
care hospital cannot exceed a cap on the target amounts for hospitals
in the same class.
Section 121 of Public Law 106-113 amended section 1886(b)(3)(H) of
the Act to provide for an appropriate wage adjustment to the caps on
the target amounts for psychiatric hospitals and units, rehabilitation
hospitals and units, and long-term care hospitals, effective for cost
reporting periods beginning on or after October 1, 1999, through
September 30, 2002. We intend to publish an interim final rule with
comment period implementing this provision for cost reporting periods
beginning on or after October 1, 1999 and before October 1, 2000. This
proposed rule addresses the wage adjustment to the caps for cost
reporting periods beginning on or after October 1, 2000.
As discussed in section VI. of the preamble of this proposed rule,
under section 121 of Public Law 106-113, the cap on the target amount
per discharge is determined by adding the hospital's nonlabor-related
portion of the national 75th percentile cap to its wage-adjusted,
labor-related portion of the national 75th percentile cap (the labor-
related portion of costs equals 0.71553 and the nonlabor-related
portion of costs equals 0.28447). A hospital's wage-adjusted, labor-
related portion of the target amount is calculated by multiplying the
labor-related portion of the national 75th percentile cap for the
hospital's class by the wage index under the hospital inpatient
prospective payment system (see Sec. 412.63), without taking into
account reclassifications under sections 1886(a)(10) and (d)(8)(B) of
the Act.
For cost reporting periods beginning in FY 2001, the proposed caps
are as follows:
[[Page 26338]]
------------------------------------------------------------------------
Labor- Nonlabor-
Class of excluded hospital or unit related related
share share
------------------------------------------------------------------------
Psychiatric................................... $8,106 $3,223
Rehabilitation................................ 15,108 6,007
Long-Term Care................................ 29,312 11,654
------------------------------------------------------------------------
Regulations at Sec. 413.40(d) specify the formulas for determining
bonus and relief payments for excluded hospitals and specify
established criteria for an additional bonus payment for continuous
improvement. Regulations at Sec. 413.40(f)(2)(ii) specify the payment
methodology for new hospitals and hospital units (psychiatric,
rehabilitation, and long-term care) effective October 1, 1997.
VI. Tables
This section contains the tables referred to throughout the
preamble to this proposed rule and in this Addendum. For purposes of
this proposed rule, and to avoid confusion, we have retained the
designations of Tables 1 through 5 that were first used in the
September 1, 1983 initial prospective payment final rule (48 FR 39844).
Tables 1A, 1C, 1D, 1E (a new table, as described in section II of this
Addendum), 3C, 4A, 4B, 4C, 4D, 4E, 4F, 5, 6A, 6B, 6C, 6D, 6E, 6F, 6G,
7A, 7B, 8A, and 8B are presented below. The tables presented below are
as follows:
Table 1A--National Adjusted Operating Standardized Amounts, Labor/
Nonlabor
Table 1C--Adjusted Operating Standardized Amounts for Puerto Rico,
Labor/Nonlabor
Table 1D--Capital Standard Federal Payment Rate
Table 1E--National Adjusted Operating Standardized Amounts for Sole
Community Hospitals, Labor/Nonlabor
Table 3C--Hospital Case Mix Indexes for Discharges Occurring in Federal
Fiscal Year 1999 and Hospital Average Hourly Wage for Federal Fiscal
Year 2001 Wage Index
Table 4A--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Urban Areas
Table 4B--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Rural Areas
Table 4C--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Hospitals That Are Reclassified
Table 4D--Average Hourly Wage for Urban Areas
Table 4E--Average Hourly Wage for Rural Areas
Table 4F--Puerto Rico Wage Index and Capital Geographic Adjustment
Factor (GAF)
Table 5--List of Diagnosis Related Groups (DRGs), Relative Weighting
Factors, Geometric Mean Length of Stay, and Arithmetic Mean Length of
Stay Points Used in the Prospective Payment System
Table 6A--New Diagnosis Codes
Table 6B--New Procedure Codes
Table 6C--Invalid Diagnosis Codes
Table 6D--Revised Diagnosis Code Titles
Table 6E--Revised Procedure Codes
Table 6F--Additions to the CC Exclusions List
Table 6G--Deletions to the CC Exclusions List
Table 7A--Medicare Prospective Payment System Selected Percentile
Lengths of Stay FY 99 MEDPAR Update 12/99 GROUPER V17.0
Table 7B--Medicare Prospective Payment System Selected Percentile
Lengths of Stay FY 99 MEDPAR Update 12/99 GROUPER V18.0
Table 8A--Statewide Average Operating Cost-to-Charge Ratios for Urban
and Rural Hospitals (Case Weighted) March 2000
Table 8B--Statewide Average Capital Cost-to-Charge Ratios (Case
Weighted) March 2000
Table 1A.--National Adjusted Operating Standardized Amounts, Labor/Nonlabor
----------------------------------------------------------------------------------------------------------------
Large urban areas Other areas
----------------------------------------------------------------------------------------------------------------
Labor-related Nonlabor-related Labor-related Nonlabor related
----------------------------------------------------------------------------------------------------------------
$2,856.71 $1,161.17 $2,811.49 $1,142.79
----------------------------------------------------------------------------------------------------------------
Table 1C.--Adjusted Operating Standardized Amounts for Puerto Rico, Labor/Nonlabor
----------------------------------------------------------------------------------------------------------------
Large urban areas Other areas
---------------------------------------------------------------
Labor Nonlabor Labor Nonlabor
----------------------------------------------------------------------------------------------------------------
National........................................ $2,832.11 $1,151.16 $2,832.11 $1,151.16
Puerto Rico..................................... 1,373.19 552.74 1,351.45 543.99
----------------------------------------------------------------------------------------------------------------
Table 1D.--Capital Standard Federal Payment Rate
------------------------------------------------------------------------
Rate
------------------------------------------------------------------------
National................................................... $383.06
Puerto Rico................................................ 185.38
------------------------------------------------------------------------
Table 1E.--National Adjusted Operating Standardized Amounts for Sole Community Hospitals, Labor/Nonlabor
----------------------------------------------------------------------------------------------------------------
Large urban areas Other areas
----------------------------------------------------------------------------------------------------------------
Labor-related Nonlabor-related Labor-related Nonlabor-related
----------------------------------------------------------------------------------------------------------------
$2,887.52 $1,173.69 $2,841.81 $1,155.11
----------------------------------------------------------------------------------------------------------------
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Table 4A.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Urban Areas
------------------------------------------------------------------------
Wage
Urban area (constituent counties) index GAF
------------------------------------------------------------------------
0040 Abilene, TX................................... 0.8318 0.8815
Taylor, TX
0060 Aguadilla, PR................................. 0.4826 0.6072
Aguada, PR
Aguadilla, PR
Moca, PR
0080 Akron, OH..................................... 1.0557 1.0378
Portage, OH
Summit, OH
0120 Albany, GA.................................... 1.1854 1.1235
Dougherty, GA
Lee, GA
0160 Albany-Schenectady-Troy, NY................... 0.8563 0.8992
Albany, NY
Montgomery, NY
Rensselaer, NY
Saratoga, NY
Schenectady, NY
Schoharie, NY
0200 Albuquerque, NM............................... 0.9365 0.9561
Bernalillo, NM
Sandoval, NM
Valencia, NM
0220 Alexandria, LA................................ 0.8262 0.8774
Rapides, LA
0240 Allentown-Bethlehem-Easton, PA................ 0.9849 0.9896
Carbon, PA
Lehigh, PA
Northampton, PA
0280 Altoona, PA................................... 0.9262 0.9489
Blair, PA
0320 Amarillo, TX Potter, TX....................... 0.8663 0.9064
Randall, TX
0380 Anchorage, AK................................. 1.2967 1.1947
Anchorage, AK
0440 Ann Arbor, MI................................. 1.1283 1.0862
Lenawee, MI
Livingston, MI
Washtenaw, MI
0450 Anniston, AL.................................. 0.8331 0.8825
Calhoun, AL
0460 Appleton-Oshkosh-Neenah, WI................... 0.9101 0.9375
Calumet, WI
Outagamie, WI
Winnebago, WI
0470 Arecibo, PR................................... 0.4540 0.5823
Arecibo, PR
Camuy, PR
Hatillo, PR
0480 Asheville, NC................................. 0.9527 0.9674
Buncombe, NC
Madison, NC
0500 Athens, GA.................................... 0.9829 0.9883
Clarke, GA
Madison, GA
Oconee, GA
0520 \1\ Atlanta, GA............................... 0.9945 0.9962
Barrow, GA
Bartow, GA
Carroll, GA
Cherokee, GA
Clayton, GA
Cobb, GA
Coweta, GA
DeKalb, GA
Douglas, GA
Fayette, GA
Forsyth, GA
Fulton, GA
Gwinnett, GA
Henry, GA
Newton, GA
Paulding, GA
Pickens, GA
Rockdale, GA
Spalding, GA
Walton, GA
0560 Atlantic-Cape May, NJ......................... 1.1220 1.0820
Atlantic, NJ
Cape May, NJ
0580 Auburn-Opelika, AL............................ 0.8170 0.8707
Lee, AL
0600 Augusta-Aiken, GA-SC.......................... 0.9226 0.9463
Columbia, GA
McDuffie, GA
Richmond, GA
Aiken, SC
Edgefield, SC
0640 \1\ Austin-San Marcos, TX..................... 0.9436 0.9610
Bastrop, TX
Caldwell, TX
Hays, TX
Travis, TX
Williamson, TX
0680 \2\ Bakersfield, CA........................... 0.9966 0.9977
Kern, CA
0720 \1\ Baltimore, MD............................. 0.9485 0.9644
Anne Arundel, MD
Baltimore, MD
Baltimore City, MD
Carroll, MD
Harford, MD
Howard, MD
Queen Anne's, MD
0733 Bangor, ME.................................... 0.9613 0.9733
Penobscot, ME
0743 Barnstable-Yarmouth, MA....................... 1.3938 1.2553
Barnstable, MA
0760 Baton Rouge, LA............................... 0.8964 0.9278
Ascension, LA
East Baton Rouge, LA
Livingston, LA
West Baton Rouge, LA
0840 Beaumont-Port Arthur, TX...................... 0.8361 0.8846
Hardin, TX
Jefferson, TX
Orange, TX
0860 Bellingham, WA................................ 1.1491 1.0998
Whatcom, WA
0870 \2\ Benton Harbor, MI......................... 0.9133 0.9398
Berrien, MI
0875 \1\ Bergen-Passaic, NJ........................ 1.1727 1.1153
Bergen, NJ
Passaic, NJ
0880 Billings, MT.................................. 0.9577 0.9708
Yellowstone, MT
0920 Biloxi-Gulfport-Pascagoula, MS................ 0.8282 0.8789
Hancock, MS
Harrison, MS
Jackson, MS
0960 Binghamton, NY................................ 0.8723 0.9107
Broome, NY
Tioga, NY
1000 Birmingham, AL................................ 0.8574 0.9000
Blount, AL
Jefferson, AL
St. Clair, AL
Shelby, AL
1010 Bismarck, ND.................................. 0.8016 0.8595
Burleigh, ND
Morton, ND
1020 Bloomington-Normal, IL........................ 0.8854 0.9200
Monroe, IN
1040 Bloomington-Normal, IL........................ 0.9294 0.9511
McLean, IL
1080 Boise City, ID................................ 0.9133 0.9398
Ada, ID
Canyon, ID
1123 \1\ \2\ Boston-Worcester-Lawrence-Lowell- 1.1348 1.0905
Brockton, MA-NH (MA Hospitals).....................
Bristol, MA
Essex, MA
Middlesex, MA
Norfolk, MA
Plymouth, MA
Suffolk, MA
Worcester, MA
Hillsborough, NH
Merrimack, NH
Rockingham, NH
Strafford, NH
1123 \1\ Boston-Worcester-Lawrence-Lowell-Brockton, 1.1239 1.0833
MA-NH (NH Hospitals)...............................
Bristol, MA
Essex, MA
Middlesex, MA
Norfolk, MA
Plymouth, MA
Suffolk, MA
Worcester, MA
Hillsborough, NH
Merrimack, NH
Rockingham, NH
Strafford, NH
1125 Boulder-Longmont, CO.......................... 0.9798 0.9861
Boulder, CO
1145 Brazoria, TX.................................. 0.8751 0.9127
Brazoria, TX
1150 Bremerton, WA................................. 1.1069 1.0720
Kitsap, WA
1240 Brownsville-Harlingen-San Benito, TX.......... 0.8794 0.9158
[[Page 26363]]
Cameron, TX
1260 Bryan-College Station, TX..................... 0.8306 0.8806
Brazos, TX
1280 \1\ Buffalo-Niagara Falls, NY................. 0.9566 0.9701
Erie, NY
Niagara, NY
1303 Burlington, VT................................ 0.9624 0.9741
Chittenden, VT
Franklin, VT
Grand Isle, VT
1310 Caguas, PR.................................... 0.4591 0.5868
Caguas, PR
Cayey, PR
Cidra, PR
Gurabo, PR
San Lorenzo, PR
1320 \2\ Canton-Massillon, OH...................... 0.8778 0.9146
Carroll, OH
Stark, OH
1350 \2\ Casper, WY................................ 0.9046 0.9336
Natrona, WY
1360 Cedar Rapids, IA.............................. 0.8396 0.8872
Linn, IA
1400 Champaign-Urbana, IL.......................... 0.9353 0.9552
Champaign, IL
1440 Charleston-North Charleston, SC............... 0.9094 0.9370
Berkeley, SC
Charleston, SC
Dorchester, SC
1480 Charleston, WV................................ 0.9324 0.9532
Kanawha, WV
Putnam, WV
1520 \1\ Charlotte-Gastonia-Rock Hill, NC-SC....... 0.9307 0.9520
Cabarrus, NC
Gaston, NC
Lincoln, NC
Mecklenburg, NC
Rowan, NC
Stanly, NC
Union, NC
York, SC
1540 Charlottesville, VA........................... 1.0744 1.0504
Albemarle, VA
Charlottesville City, VA
Fluvanna, VA
Greene, VA
1560 Chattanooga, TN-GA............................ 1.0083 1.0057
Catoosa, GA
Dade, GA
Walker, GA
Hamilton, TN
Marion, TN
1580 \2\ Cheyenne, WY.............................. 0.9046 0.9336
Laramie, WY
1600 \1\ Chicago, IL............................... 1.1027 1.0692
Cook, IL
DeKalb, IL
DuPage, IL
Grundy, IL
Kane, IL
Kendall, IL
Lake, IL
McHenry, IL
Will, IL
1620 Chico-Paradise, CA............................ 1.0684 1.0464
Butte, CA
1640 1Cincinnati, OH-KY-IN......................... 0.9330 0.9536
Dearborn, IN
Ohio, IN
Boone, KY
Campbell, KY
Gallatin, KY
Grant, KY
Kenton, KY
Pendleton, KY
Brown, OH
Clermont, OH
Hamilton, OH
Warren, OH
1660 Clarksville-Hopkinsville, TN-KY............... 0.8393 0.8869
Christian, KY
Montgomery, TN
1680 \1\ Cleveland-Lorain-Elyria, OH............... 0.9649 0.9758
Ashtabula, OH
Cuyahoga, OH
Geauga, OH
Lake, OH
Lorain, OH
Medina, OH
1720 Colorado Springs, CO.......................... 0.9770 0.9842
El Paso, CO
1740 Columbia, MO.................................. 0.8600 0.9019
Boone, MO
1760 Columbia, SC.................................. 0.9641 0.9753
Lexington, SC
Richland, SC
1800 Columbus, GA-AL............................... 0.8607 0.9024
Russell, AL
Chattahoochee, GA
Harris, GA
Muscogee, GA
1840 \1\ Columbus, OH.............................. 0.9741 0.9822
Delaware, OH
Fairfield, OH
Franklin, OH
Licking, OH
Madison, OH
Pickaway, OH
1880 Corpus Christi, TX............................ 0.8496 0.8944
Nueces, TX
San Patricio, TX
1890 Corvallis, OR................................. 1.1439 1.0964
Benton, OR
1900 \2\ Cumberland, MD-WV (MD Hospitals).......... 0.8717 0.9103
Allegany, MD
Mineral, WV
1900 Cumberland, MD-WV (WV Hospital)............... 0.8437 0.8901
Allegany, MD
Mineral, WV
1920 \1\ Dallas, TX................................ 0.9220 0.9459
Collin, TX
Dallas, TX
Denton, TX
Ellis, TX
Henderson, TX
Hunt, TX
Kaufman, TX
Rockwall, TX
1950 Danville, VA.................................. 0.8527 0.8966
Danville City, VA
Pittsylvania, VA
1960 Davenport-Moline-Rock Island, IA-IL........... 0.9021 0.9319
Scott, IA
Henry, IL
Rock Island, IL
2000 Dayton-Springfield, OH........................ 0.9519 0.9668
Clark, OH
Greene, OH
Miami, OH
Montgomery, OH
2020 Daytona Beach, FL............................. 0.9179 0.9430
Flagler, FL
Volusia, FL
2030 Decatur, AL................................... 0.8627 0.9038
Lawrence, AL
Morgan, AL
2040 Decatur, IL................................... 0.8601 0.9019
Macon, IL
2080 \1\ Denver, CO................................ 1.0032 1.0022
Adams, CO
Arapahoe, CO
Denver, CO
Douglas, CO
Jefferson, CO
2120 Des Moines, IA................................ 0.9211 0.9453
Dallas, IA
Polk, IA
Warren, IA
2160 \1\ Detroit, MI............................... 1.0057 1.0039
Lapeer, MI
Macomb, MI
Monroe, MI
Oakland, MI
St. Clair, MI
Wayne, MI
2180 Dothan, AL.................................... 0.8105 0.8660
Dale, AL
Houston, AL
2190 Dover, DE..................................... 1.1032 1.0696
Kent, DE
2200 Dubuque, IA................................... 0.8928 0.9253
Dubuque, IA
2240 Duluth-Superior, MN-WI........................ 1.0201 1.0137
St. Louis, MN
Douglas, WI
[[Page 26364]]
2281 Dutchess County, NY........................... 0.9599 0.9724
Dutchess, NY
2290 \2\ Eau Claire, WI............................ 0.9073 0.9356
Chippewa, WI
Eau Claire, WI
2320 El Paso, TX................................... 0.9215 0.9456
El Paso, TX
2330 Elkhart-Goshen, IN............................ 0.9549 0.9689
Elkhart, IN
2335 Elmira, NY.................................... 0.8645 0.9051
Chemung, NY
2340 Enid, OK...................................... 0.8781 0.9148
Garfield, OK
2360 Erie, PA...................................... 0.9021 0.9319
Erie, PA
2400 Eugene-Springfield, OR........................ 1.1026 1.0692
Lane, OR
2440 \2\ Evansville-Henderson, IN-KY (IN Hospitals) 0.8807 0.9167
Posey, IN
Vanderburgh, IN
Warrick, IN
Henderson, KY
2440 Evansville-Henderson, IN-KY (KY Hospitals).... 0.8018 0.8596
Posey, IN
Vanderburgh, IN
Warrick, IN
Henderson, KY
2520 Fargo-Moorhead, ND-MN......................... 0.8830 0.9183
Clay, MN
Cass, ND
2560 Fayetteville, NC.............................. 0.8638 0.9046
Cumberland, NC
2580 Fayetteville-Springdale-Rogers, AR............ 0.7999 0.8582
Benton, AR
Washington, AR
2620 Flagstaff, AZ-UT.............................. 1.0844 1.0571
Coconino, AZ
Kane, UT
2640 Flint, MI..................................... 1.1189 1.0800
Genesee, MI
2650 Florence, AL.................................. 0.7621 0.8302
Colbert, AL
Lauderdale, AL
2655 Florence, SC.................................. 0.8838 0.9189
Florence, SC
2670 Fort Collins-Loveland, CO..................... 1.1005 1.0678
Larimer, CO
2680 \1\ Ft. Lauderdale, FL........................ 1.0228 1.0156
Broward, FL
2700 Fort Myers-Cape Coral, FL..................... 0.9112 0.9383
Lee, FL
2710 Fort Pierce-Port St. Lucie, FL................ 0.9672 0.9774
Martin, FL
St. Lucie, FL
2720 Fort Smith, AR-OK............................. 0.8858 0.9203
Crawford, AR
Sebastian, AR
Sequoyah, OK
2750 Fort Walton Beach, FL......................... 0.9351 0.9551
Okaloosa, FL
2760 \2\ Fort Wayne, IN............................ 0.8807 0.9167
Adams, IN
Allen, IN
De Kalb, IN
Huntington, IN
Wells, IN
Whitley, IN
2800 \1\ Forth Worth-Arlington, TX................. 0.9442 0.9614
Hood, TX
Johnson, TX
Parker, TX
Tarrant, TX
2840 Fresno, CA.................................... 1.0184 1.0126
Fresno, CA
Madera, CA
2880 Gadsden, AL................................... 0.8491 0.8940
Etowah, AL
2900 Gainesville, FL............................... 1.0286 1.0195
Alachua, FL
2920 Galveston-Texas City, TX...................... 1.0284 1.0194
Galveston, TX
2960 Gary, IN...................................... 0.9454 0.9623
Lake, IN
Porter, IN
2975 \2\ Glens Falls, NY........................... 0.8558 0.8989
Warren, NY
Washington, NY
2980 \2\ Goldsboro, NC............................. 0.8553 0.8985
Wayne, NC
2985 Grand Forks, ND-MN............................ 1.0207 1.0141
Polk, MN
Grand Forks, ND
2995 Grand Junction, CO............................ 0.9601 0.9725
Mesa, CO
3000 \1\ Grand Rapids-Muskegon-Holland, MI......... 1.0256 1.0175
Allegan, MI
Kent, MI
Muskegon, MI
Ottawa, MI
3040 Great Falls, MT............................... 0.9447 0.9618
Cascade, MT
3060 Greeley, CO................................... 0.9908 0.9937
Weld, CO
3080 Green Bay, WI................................. 0.9359 0.9556
Brown, WI
3120 \1\ Greensboro-Winston-Salem-High Point, NC... 0.9187 0.9436
Alamance, NC
Davidson, NC
Davie, NC
Forsyth, NC
Guilford, NC
Randolph, NC
Stokes, NC
Yadkin, NC
3150 Greenville, NC................................ 0.9454 0.9623
Pitt, NC
3160 Greenville-Spartanburg-Anderson, SC........... 0.9160 0.9417
Anderson, SC
Cherokee, SC
Greenville, SC
Pickens, SC
Spartanburg, SC
3180 Hagerstown, MD................................ 0.9647 0.9757
Washington, MD
3200 Hamilton-Middletown, OH....................... 0.8892 0.9227
Butler, OH
3240 Harrisburg-Lebanon-Carlisle, PA............... 0.9467 0.9632
Cumberland, PA
Dauphin, PA
Lebanon, PA
Perry, PA
3283 \1\ \2\ Hartford, CT.......................... 1.1798 1.1199
Hartford, CT
Litchfield, CT
Middlesex, CT
Tolland, CT
3285 \2\ Hattiesburg, MS........................... 0.7608 0.8293
Forrest, MS
Lamar, MS
3290 Hickory-Morganton-Lenoir, NC.................. 0.8989 0.9296
Alexander, NC
Burke, NC
Caldwell, NC
Catawba, NC
3320 Honolulu, HI.................................. 1.1905 1.1268
Honolulu, HI
3350 Houma, LA..................................... 0.8218 0.8742
Lafourche, LA
Terrebonne, LA
3360 \1\ Houston, TX............................... 0.9661 0.9767
Chambers, TX
Fort Bend, TX
Harris, TX
Liberty, TX
Montgomery, TX
Waller, TX
3400 Huntington-Ashland, WV-KY-OH.................. 0.9961 0.9973
Boyd, KY
Carter, KY
Greenup, KY
Lawrence, OH
Cabell, WV
Wayne, WV
3440 Huntsville, AL................................ 0.9089 0.9367
Limestone, AL
Madison, AL
3480 \1\ Indianapolis, IN.......................... 0.9314 0.9525
Boone, IN
Hamilton, IN
Hancock, IN
[[Page 26365]]
Hendricks, IN
Johnson, IN
Madison, IN
Marion, IN
Morgan, IN
Shelby, IN
3500 Iowa City, IA................................. 0.9749 0.9827
Johnson, IA
3520 \2\ Jackson, MI............................... 0.9133 0.9398
Jackson, MI
3560 Jackson, MS................................... 0.8890 0.9226
Hinds, MS
Madison, MS
Rankin, MS
3580 Jackson, TN................................... 0.8939 0.9261
Madison, TN
Chester, TN
3600 \1\ Jacksonville, FL.......................... 0.8995 0.9300
Clay, FL
Duval, FL
Nassau, FL
St. Johns, FL
3605 \2\ Jacksonville, NC.......................... 0.8553 0.8985
Onslow, NC
3610 \2\ Jamestown, NY............................. 0.8558 0.8989
Chautauqua, NY
3620 Janesville-Beloit, WI......................... 0.9856 0.9901
Rock, WI
3640 Jersey City, NJ............................... 1.0985 1.0664
Hudson, NJ
3660 Johnson City-Kingsport-Bristol, TN-VA......... 0.8412 0.8883
Carter, TN
Hawkins, TN
Sullivan, TN
Unicoi, TN
Washington, TN
Bristol City, VA
Scott, VA
Washington, VA
3680 Johnstown, PA................................. 0.8686 0.9080
Cambria, PA
Somerset, PA
3700 Jonesboro, AR................................. 0.8587 0.9009
Craighead, AR
3710 Joplin, MO.................................... 0.7924 0.8527
Jasper, MO
Newton, MO
3720 Kalamazoo-Battlecreek, MI..................... 1.0247 1.0168
Calhoun, MI
Kalamazoo, MI
Van Buren, MI
3740 Kankakee, IL.................................. 0.8954 0.9271
Kankakee, IL
3760 \1\ Kansas City, KS-MO........................ 0.9629 0.9744
Johnson, KS
Leavenworth, KS
Miami, KS
Wyandotte, KS
Cass, MO
Clay, MO
Clinton, MO
Jackson, MO
Lafayette, MO
Platte, MO
Ray, MO
3800 Kenosha, WI................................... 0.9703 0.9796
Kenosha, WI
3810 Killeen-Temple, TX............................ 1.0321 1.0219
Bell, TX
Coryell, TX
3840 Knoxville, TN................................. 0.8422 0.8890
Anderson, TN
Blount, TN
Knox, TN
Loudon, TN
Sevier, TN
Union, TN
3850 Kokomo, IN.................................... 0.9190 0.9438
Howard, IN
Tipton, IN
3870 La Crosse, WI-MN.............................. 0.9442 0.9614
Houston, MN
La Crosse, WI
3880 Lafayette, LA................................. 0.8852 0.9199
Acadia, LA
Lafayette, LA
St. Landry, LA
St. Martin, LA
3920 Lafayette, IN................................. 0.9091 0.9368
Clinton, IN
Tippecanoe, IN
3960 \2\ Lake Charles, LA.......................... 0.7921 0.8525
Calcasieu, LA
3980 Lakeland-Winter Haven, FL..................... 0.8904 0.9236
Polk, FL
4000 Lancaster, PA................................. 0.9274 0.9497
Lancaster, PA
4040 Lansing-East Lansing, MI...................... 0.9873 0.9913
Clinton, MI
Eaton, MI
Ingham, MI
4080 Laredo, TX.................................... 0.7637 0.8314
Webb, TX
4100 Las Cruces, NM................................ 0.8744 0.9122
Dona Ana, NM
4120 \1\ Las Vegas, NV-AZ.......................... 1.0876 1.0592
Mohave, AZ
Clark, NV
Nye, NV
4150 Lawrence, KS.................................. 0.8272 0.8782
Douglas, KS
4200 Lawton, OK.................................... 0.9156 0.9414
Comanche, OK
4243 Lewiston-Auburn, ME........................... 0.9064 0.9349
Androscoggin, ME
4280 Lexington, KY................................. 0.8921 0.9248
Bourbon, KY
Clark, KY
Fayette, KY
Jessamine, KY
Madison, KY
Scott, KY
Woodford, KY
4320 Lima, OH...................................... 0.9634 0.9748
Allen, OH
Auglaize, OH
4360 Lincoln, NE................................... 0.9808 0.9868
Lancaster, NE
4400 Little Rock-North Little Rock, AR............. 0.8959 0.9275
Faulkner, AR
Lonoke, AR
Pulaski, AR
Saline, AR
4420 Longview-Marshall, TX......................... 0.8816 0.9173
Gregg, TX
Harrison, TX
Upshur, TX
4480 \1\ Los Angeles-Long Beach, CA................ 1.1955 1.1301
Los Angeles, CA
4520 Louisville, KY-IN............................. 0.9395 0.9582
Clark, IN
Floyd, IN
Harrison, IN
Scott, IN
Bullitt, KY
Jefferson, KY
Oldham, KY
4600 Lubbock, TX................................... 0.8828 0.9182
Lubbock, TX
4640 Lynchburg, VA................................. 0.9218 0.9458
Amherst, VA
Bedford, VA
Bedford City, VA
Campbell, VA
Lynchburg City, VA
4680 Macon, GA..................................... 0.9046 0.9336
Bibb, GA
Houston, GA
Jones, GA
Peach, GA
Twiggs, GA
4720 Madison, WI................................... 1.0354 1.0241
Dane, WI
4800 \2\ Mansfield, OH............................. 0.8778 0.9146
Crawford, OH
Richland, OH
4840 Mayaguez, PR.................................. 0.4617 0.5891
Anasco, PR
Cabo Rojo, PR
Hormigueros, PR
Mayaguez, PR
Sabana Grande, PR
San German, PR
4880 McAllen-Edinburg-Mission, TX.................. 0.8403 0.8877
Hidalgo, TX
4890 Medford-Ashland, OR........................... 1.0438 1.0298
Jackson, OR
4900 Melbourne-Titusville-Palm Bay, FL............. 0.9713 0.9803
Brevard, Fl
[[Page 26366]]
4920 \1\ \2\ Memphis, TN-AR-MS (TN Hospitals)...... 0.7980 0.8568
Crittenden, AR
DeSoto, MS
Fayette, TN
Shelby, TN
Tipton, TN
4920 \1\ \2\ Memphis, TN-AR-MS (AR Hospitals)...... 0.7538 0.8240
Crittenden, AR
DeSoto, MS
Fayette, TN
Shelby, TN
Tipton, TN
4920 \1\ \2\ Memphis, TN-AR-MS (MS Hospitals)...... 0.7608 0.8293
Crittenden, AR
DeSoto, MS
Fayette, TN
Shelby, TN
Tipton, TN
4940 \2\ Merced, CA................................ 0.9966 0.9977
Merced, CA
5000 \1\ Miami, FL................................. 1.0148 1.0101
Dade, FL
5015 \1\ Middlesex-Somerset-Hunterdon, NJ.......... 1.0342 1.0233
Hunterdon, NJ
Middlesex, NJ
Somerset, NJ
5080 \1\ Milwaukee-Waukesha, WI.................... 0.9803 0.9865
Milwaukee, WI
Ozaukee, WI
Washington, WI
Waukesha, WI
5120 \1\ Minneapolis-St. Paul, MN-WI............... 1.1118 1.0753
Anoka, MN
Carver, MN
Chisago, MN
Dakota, MN
Hennepin, MN
Isanti, MN
Ramsey, MN
Scott, MN
Sherburne, MN
Washington, MN
Wright, MN
Pierce, WI
St. Croix, WI
5140 Missoula, MT.................................. 0.9462 0.9628
Missoula, MT
5160 Mobile, AL.................................... 0.8205 0.8733
Baldwin, AL
Mobile, AL
5170 Modesto, CA................................... 1.0481 1.0327
Stanislaus, CA
5190 \1\ Monmouth-Ocean, NJ........................ 1.1552 1.1038
Monmouth, NJ
Ocean, NJ
5200 Monroe, LA.................................... 0.8467 0.8923
Ouachita, LA
5240 \2\ Montgomery, AL............................ 0.7610 0.8294
Autauga, AL
Elmore, AL
Montgomery, AL
5280 Muncie, IN.................................... 1.0734 1.0497
Delaware, IN
5330 Myrtle Beach, SC.............................. 0.8658 0.9060
Horry, SC
5345 Naples, FL.................................... 0.9396 0.9582
Collier, FL
5360 \1\ Nashville, TN............................. 0.9201 0.9446
Cheatham, TN
Davidson, TN
Dickson, TN
Robertson, TN
Rutherford TN
Sumner, TN
Williamson, TN
Wilson, TN
5380 \1\ Nassau-Suffolk, NY........................ 1.3089 1.2024
Nassau, NY
Suffolk, NY
5483 \1\ New Haven-Bridgeport-Stamford-Waterbury- 1.2135 1.1417
Danbury, CT........................................
Fairfield, CT
New Haven, CT
5523 New London-Norwich, CT........................ 1.1984 1.1319
New London, CT
5560 \1\ New Orleans, LA........................... 0.9283 0.9503
Jefferson, LA
Orleans, LA
Plaquemines, LA
St. Bernard, LA
St. Charles, LA
St. James, LA
St. John The Baptist, LA
St. Tammany, LA
5600 \1\ New York, NY.............................. 1.4445 1.2864
Bronx, NY
Kings, NY
New York, NY
Putnam, NY
Queens, NY
Richmond, NY
Rockland, NY
Westchester, NY
5640 \1\ Newark, NJ................................ 1.0717 1.0486
Essex, NJ
Morris, NJ
Sussex, NJ
Union, NJ
Warren, NJ
5660 Newburgh, NY-PA............................... 1.0946 1.0639
Orange, NY
Pike, PA
5720 \1\ Norfolk-Virginia Beach-Newport News, VA-NC 0.8429 0.8896
Currituck, NC
Chesapeake City, VA
Gloucester, VA
Hampton City, VA
Isle of Wight, VA
James City, VA
Mathews, VA
Newport News City, VA
Norfolk City, VA
Poquoson City, VA
Portsmouth City, VA
Suffolk City, VA
Virginia Beach City, VA
Williamsburg City, VA
York, VA
5775 \1\ Oakland, CA............................... 1.5051 1.3231
Alameda, CA
Contra Costa, CA
5790 Ocala, FL..................................... 0.8904 0.9236
Marion, FL
5800 Odessa-Midland, TX............................ 0.9168 0.9422
Ector, TX
Midland, TX
5880 \1\ Oklahoma City, OK......................... 0.8910 0.9240
Canadian, OK
Cleveland, OK
Logan, OK
McClain, OK
Oklahoma, OK
Pottawatomie, OK
5910 Olympia, WA................................... 1.0787 1.0532
Thurston, WA
5920 Omaha, NE-IA.................................. 0.9707 0.9798
Pottawattamie, IA
Cass, NE
Douglas, NE
Sarpy, NE
Washington, NE
5945 \1\ Orange County, CA......................... 1.1560 1.1044
Orange, CA
5960 \1\ Orlando, FL............................... 0.9959 0.9972
Lake, FL
Orange, FL
Osceola, FL
Seminole, FL
5990 \2\ Owensboro, KY............................. 0.8017 0.8595
Daviess, KY
6015 Panama City, FL............................... 0.9129 0.9395
Bay, FL
6020 \2\ Parkersburg-Marietta, WV-OH (WV Hospitals) 0.8321 0.8817
Washington, OH
Wood, WV
6020 \2\ Parkersburg-Marietta, WV-OH (OH Hospitals) 0.8778 0.9146
Washington, OH
Wood, WV
6080 \2\ Pensacola, FL............................. 0.8904 0.9236
Escambia, FL
Santa Rosa, FL
[[Page 26367]]
6120 Peoria-Pekin, IL.............................. 0.8687 0.9081
Peoria, IL
Tazewell, IL
Woodford, IL
6160 \1\ Philadelphia, PA-NJ....................... 1.0660 1.0447
Burlington, NJ
Camden, NJ
Gloucester, NJ
Salem, NJ
Bucks, PA
Chester, PA
Delaware, PA
Montgomery, PA
Philadelphia, PA
6200 \1\ Phoenix-Mesa, AZ.......................... 0.9532 0.9677
Maricopa, AZ
Pinal, AZ
6240 Pine Bluff, AR................................ 0.7866 0.8484
Jefferson, AR
6280 \1\ Pittsburgh, PA............................ 0.9818 0.9875
Allegheny, PA
Beaver, PA
Butler, PA
Fayette, PA
Washington, PA
Westmoreland, PA
6323 \2\ Pittsfield, MA............................ 1.1348 1.0905
Berkshire, MA
6340 Pocatello, ID................................. 1.0819 1.0554
Bannock, ID
6360 Ponce, PR..................................... 0.4347 0.5652
Guayanilla, PR
Juana Diaz, PR
Penuelas, PR
Ponce, PR
Villalba, PR
Yauco, PR
6403 Portland, ME.................................. 0.9779 0.9848
Cumberland, ME
Sagadahoc, ME
York, ME
6440 \1\ Portland-Vancouver, OR-WA................. 1.0928 1.0627
Clackamas, OR
Columbia, OR
Multnomah, OR
Washington, OR
Yamhill, OR
Clark, WA
6483 \1\ Providence-Warwick-Pawtucket, RI.......... 1.0955 1.0645
Bristol, RI
Kent, RI
Newport, RI
Providence, RI
Washington, RI
6520 Provo-Orem, UT................................ 0.9972 0.9981
Utah, UT
6560 \2\ Pueblo, CO................................ 0.9179 0.9430
Pueblo, CO
6580 Punta Gorda, FL............................... 0.9565 0.9700
Charlotte, FL
6600 Racine, WI.................................... 0.9298 0.9514
Racine, WI
6640 \1\ Raleigh-Durham-Chapel Hill, NC............ 0.9749 0.9827
Chatham, NC
Durham, NC
Franklin, NC
Johnston, NC
Orange, NC
Wake, NC
6660 Rapid City, SD................................ 0.8463 0.8920
Pennington, SD
6680 Reading, PA................................... 0.9203 0.9447
Berks, PA
6690 Redding, CA................................... 1.1795 1.1197
Shasta, CA
6720 Reno, NV...................................... 1.0508 1.0345
Washoe, NV
6740 Richland-Kennewick-Pasco, WA.................. 1.1564 1.1046
Benton, WA
Franklin, WA
6760 Richmond-Petersburg, VA....................... 0.9679 0.9779
Charles City County, 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
6780 \1\ Riverside-San Bernardino, CA.............. 1.1159 1.0780
Riverside, CA
San Bernardino, CA
6800 Roanoke, VA................................... 0.9543 0.9685
Botetourt, VA
Roanoke, VA
Roanoke City, VA
Salem City, VA
6820 Rochester, MN................................. 1.1361 1.0913
Olmsted, MN
6840 \1\ Rochester, NY............................. 0.8846 0.9195
Genesee, NY
Livingston, NY
Monroe, NY
Ontario, NY
Orleans, NY
Wayne, NY
6880 Rockford, IL.................................. 0.8904 0.9236
Boone, IL
Ogle, IL
Winnebago, IL
6895 Rocky Mount, NC............................... 0.8875 0.9215
Edgecombe, NC
Nash, NC
6920 \1\ Sacramento, CA............................ 1.2003 1.1332
El Dorado, CA
Placer, CA
Sacramento, CA
6960 Saginaw-Bay City-Midland, MI.................. 0.9475 0.9637
Bay, MI
Midland, MI
Saginaw, MI
6980 St. Cloud, MN................................. 1.0164 1.0112
Benton, MN
Stearns, MN
7000 St. Joseph, MO................................ 0.9245 0.9477
Andrew, MO
Buchanan, MO
7040 \1\ St. Louis, MO-IL.......................... 0.9114 0.9384
Clinton, IL
Jersey, IL
Madison, IL
Monroe, IL
St. Clair, IL
Franklin, MO
Jefferson, MO
Lincoln, MO
St. Charles, MO
St. Louis, MO
St. Louis City, MO
Warren, MO
7080 \2\ Salem, OR................................. 1.0300 1.0204
Marion, OR
Polk, OR
7120 Salinas, CA................................... 1.4649 1.2988
Monterey, CA
7160 \1\ Salt Lake City-Ogden, UT.................. 0.9661 0.9767
Davis, UT
Salt Lake, UT
Weber, UT
7200 San Angelo, TX................................ 0.7747 0.8396
Tom Green, TX
7240 \1\ San Antonio, TX........................... 0.8087 0.8647
Bexar, TX
Comal, TX
Guadalupe, TX
Wilson, TX
7320 \1\ San Diego, CA............................. 1.1901 1.1266
San Diego, CA
7360 \1\ San Francisco, CA......................... 1.4433 1.2857
Marin, CA
San Francisco, CA
San Mateo, CA
7400 \1\ San Jose, CA.............................. 1.4376 1.2822
Santa Clara, CA
7440 \1\ San Juan-Bayamon, PR...................... 0.4691 0.5955
Aguas Buenas, PR
Barceloneta, PR
Bayamon, PR
Canovanas, PR
Carolina, PR
Catano, PR
Ceiba, PR
Comerio, PR
Corozal, PR
Dorado, PR
Fajardo, PR
[[Page 26368]]
Florida, PR
Guaynabo, PR
Humacao, PR
Juncos, PR
Los Piedras, PR
Loiza, PR
Luguillo, PR
Manati, PR
Morovis, PR
Naguabo, PR
Naranjito, PR
Rio Grande, PR
San Juan, PR
Toa Alta, PR
Toa Baja, PR
Trujillo Alto, PR
Vega Alta, PR
Vega Baja, PR
Yabucoa, PR
7460 San Luis Obispo-Atascadero-Paso Robles, CA.... 1.0755 1.0511
San Luis Obispo, CA
7480 Santa Barbara-Santa Maria-Lompoc, CA.......... 1.0728 1.0493
Santa Barbara, CA
7485 Santa Cruz-Watsonville, CA.................... 1.4736 1.3041
Santa Cruz, CA
7490 Santa Fe, NM.................................. 0.9383 0.9573
Los Alamos, NM
Santa Fe, NM
7500 Santa Rosa, CA................................ 1.3182 1.2083
Sonoma, CA
7510 Sarasota-Bradenton, FL........................ 0.9670 0.9773
Manatee, FL
Sarasota, FL
7520 Savannah, GA.................................. 0.8689 0.9083
Bryan, GA
Chatham, GA
Effingham, GA
7560 \2\ Scranton-Wilkes-Barre-Hazleton, PA........ 0.8686 0.9080
Columbia, PA
Lackawanna, PA
Luzerne, PA
Wyoming, PA
7600 \1\ Seattle-Bellevue-Everett, WA.............. 1.1134 1.0763
Island, WA
King, WA
Snohomish, WA
7610 \2\ Sharon, PA................................ 0.8686 0.9080
Mercer, PA
7620 \2\ Sheboygan, WI............................. 0.9073 0.9356
Sheboygan, WI
7640 Sherman-Denison, TX........................... 0.8619 0.9032
Grayson, TX
7680 Shreveport-Bossier City, LA................... 0.8853 0.9200
Bossier, LA
Caddo, LA
Webster, LA
7720 Sioux City, IA-NE............................. 0.8571 0.8998
Woodbury, IA
Dakota, NE
7760 Sioux Falls, SD............................... 0.8890 0.9226
Lincoln, SD
Minnehaha, SD
7800 South Bend, IN................................ 1.0233 1.0159
St. Joseph, IN
7840 Spokane, WA................................... 1.1979 1.1316
Spokane, WA
7880 Springfield, IL............................... 0.8744 0.9122
Menard, IL
Sangamon, IL
7920 Springfield, MO............................... 0.8357 0.8843
Christian, MO
Greene, MO
Webster, MO
8003 \2\ Springfield, MA........................... 1.1348 1.0905
Hampden, MA
Hampshire, MA
8050 State College, PA............................. 0.9114 0.9384
Centre, PA
8080 \2\ Steubenville-Weirton, OH-WV (OH Hospitals) 0.8778 0.9146
Jefferson, OH
Brooke, WV
Hancock, WV
8080 Steubenville-Weirton, OH-WV (WV Hospitals).... 0.8658 0.9060
Jefferson, OH
Brooke, WV
Hancock, WV
8120 Stockton-Lodi, CA............................. 1.0711 1.0482
San Joaquin, CA
8140 \2\ Sumter, SC................................ 0.8445 0.8907
Sumter, SC
8160 Syracuse, NY.................................. 0.9662 0.9767
Cayuga, NY
Madison, NY
Onondaga, NY
Oswego, NY
8200 Tacoma, WA.................................... 1.1658 1.1108
Pierce, WA
8240 \2\ Tallahassee, FL........................... 0.8904 0.9236
Gadsden, FL
Leon, FL
8280 \1\ Tampa-St. Petersburg-Clearwater, FL....... 0.9111 0.9382
Hernando, FL
Hillsborough, FL
Pasco, FL
Pinellas, FL
8320 \2\ Terre Haute, IN........................... 0.8807 0.9167
Clay, IN
Vermillion, IN
Vigo, IN
8360 Texarkana, AR-Texarkana, TX................... 0.7962 0.8555
Miller, AR
Bowie, TX
8400 Toledo, OH.................................... 0.9705 0.9797
Fulton, OH
Lucas, OH
Wood, OH
8440 Topeka, KS.................................... 0.9134 0.9399
Shawnee, KS
8480 Trenton, NJ................................... 0.9919 0.9944
Mercer, NJ
8520 Tucson, AZ.................................... 0.8826 0.9180
Pima, AZ
8560 Tulsa, OK..................................... 0.8698 0.9089
Creek, OK
Osage, OK
Rogers, OK
Tulsa, OK
Wagoner, OK
8600 Tuscaloosa, AL................................ 0.8081 0.8642
Tuscaloosa, AL
8640 Tyler, TX..................................... 0.9270 0.9494
Smith, TX
8680 \2\ Utica-Rome, NY............................ 0.8558 0.8989
Herkimer, NY
Oneida, NY
8720 Vallejo-Fairfield-Napa, CA.................... 1.2672 1.1761
Napa, CA
Solano, CA
8735 Ventura, CA................................... 1.0586 1.0398
Ventura, CA
8750 Victoria, TX.................................. 0.8133 0.8680
Victoria, TX
8760 Vineland-Millville-Bridgeton, NJ.............. 1.0462 1.0314
Cumberland, NJ
8780 \2\ Visalia-Tulare-Porterville, CA............ 0.9966 0.9977
Tulare, CA
8800 Waco, TX...................................... 0.8402 0.8876
McLennan, TX
8840 \1\ Washington, DC-MD-VA-WV................... 1.0832 1.0563
District of Columbia, DC
Calvert, MD
Charles, MD
Frederick, MD
Montgomery, MD
Prince Georges, MD
Alexandria City, VA
Arlington, VA
Clarke, VA
Culpeper, VA
Fairfax, VA
Fairfax City, VA
Falls Church City, VA
Fauquier, VA
Fredericksburg City, VA
King George, VA
Loudoun, VA
Manassas City, VA
Manassas Park City, VA
Prince William, VA
Spotsylvania, VA
Stafford, VA
[[Page 26369]]
Warren, VA
Berkeley, WV
Jefferson, WV
8920 Waterloo-Cedar Falls, IA...................... 0.8932 0.9256
Black Hawk, IA
8940 Wausau, WI.................................... 0.9511 0.9663
Marathon, WI
8960 \1\ West Palm Beach-Boca Raton, FL............ 0.9658 0.9765
Palm Beach, FL
9000 \2\ Wheeling, WV-OH (WV Hospitals)............ 0.8321 0.8817
Belmont, OH
Marshall, WV
Ohio, WV
9000 \2\ Wheeling, WV-OH (OH Hospitals)............ 0.8778 0.9146
Belmont, OH
Marshall, WV
Ohio, WV
9040 Wichita, KS................................... 0.9574 0.9706
Butler, KS
Harvey, KS
Sedgwick, KS
9080 Wichita Falls, TX............................. 0.7668 0.8337
Archer, TX
Wichita, TX
9140 \2\ Williamsport, PA.......................... 0.8686 0.9080
Lycoming, PA
9160 Wilmington-Newark, DE-MD...................... 1.1281 1.0860
New Castle, DE
Cecil, MD
9200 Wilmington, NC................................ 0.9474 0.9637
New Hanover, NC
Brunswick, NC
9260 \2\ Yakima, WA................................ 1.0763 1.0516
Yakima, WA
9270 Yolo, CA...................................... 1.0261 1.0178
Yolo, CA
9280 York, PA...................................... 0.9427 0.9604
York, PA
9320 Youngstown-Warren, OH......................... 0.9604 0.9727
Columbiana, OH
Mahoning, OH
Trumbull, OH
9340 Yuba City, CA................................. 1.0820 1.0555
Sutter, CA
Yuba, CA
9360 Yuma, AZ...................................... 0.9605 0.9728
Yuma, AZ
------------------------------------------------------------------------
\1\ Large Urban Area
\2\ Hospitals geographically located in the area are assigned the
statewide rural wage index for FY 2000.
Table 4B.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Rural Areas
------------------------------------------------------------------------
Wage
Nonurban Area Index GAF
------------------------------------------------------------------------
Alabama............................................. 0.7610 0.8294
Alaska.............................................. 1.2681 1.1766
Arizona............................................. 0.8400 0.8875
Arkansas............................................ 0.7538 0.8240
California.......................................... 0.9966 0.9977
Colorado............................................ 0.9179 0.9430
Connecticut......................................... 1.1798 1.1199
Delaware............................................ 0.9349 0.9549
Florida............................................. 0.8904 0.9236
Georgia............................................. 0.8510 0.8954
Hawaii.............................................. 1.1438 1.0964
Idaho............................................... 0.8831 0.9184
Illinois............................................ 0.8320 0.8817
Indiana............................................. 0.8807 0.9167
Iowa................................................ 0.8196 0.8726
Kansas.............................................. 0.7710 0.8369
Kentucky............................................ 0.8017 0.8595
Louisiana........................................... 0.7921 0.8525
Maine............................................... 0.8813 0.9171
Maryland............................................ 0.8717 0.9103
Massachusetts....................................... 1.1348 1.0905
Michigan............................................ 0.9133 0.9398
Minnesota........................................... 0.9116 0.9386
Mississippi......................................... 0.7608 0.8293
Missouri............................................ 0.7766 0.8410
Montana............................................. 0.9017 0.9316
Nebraska............................................ 0.8265 0.8777
Nevada.............................................. 0.9354 0.9553
New Hampshire....................................... 0.9995 0.9997
New Jersey \1\...................................... 0.0000 ........
New Mexico.......................................... 0.8425 0.8893
New York............................................ 0.8558 0.8989
North Carolina...................................... 0.8553 0.8985
North Dakota........................................ 0.7698 0.8360
Ohio................................................ 0.8778 0.9146
Oklahoma............................................ 0.7622 0.8303
Oregon.............................................. 1.0300 1.0204
Pennsylvania........................................ 0.8686 0.9080
Puerto Rico......................................... 0.4232 0.5550
Rhode Island \1\.................................... 0.0000 ........
South Carolina...................................... 0.8445 0.8907
South Dakota........................................ 0.7786 0.8425
Tennessee........................................... 0.7980 0.8568
Texas............................................... 0.7523 0.8229
Utah................................................ 0.9182 0.9432
Vermont............................................. 0.9538 0.9681
Virginia............................................ 0.8361 0.8846
Washington.......................................... 1.0763 1.0516
West Virginia....................................... 0.8321 0.8817
Wisconsin........................................... 0.9073 0.9356
Wyoming............................................. 0.9046 0.9336
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban.
Table 4C.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Hospitals That Are Reclassified
------------------------------------------------------------------------
Wage
Area index GAF
------------------------------------------------------------------------
Abilene, TX......................................... 0.8318 0.8815
Akron, OH........................................... 1.0181 1.0124
Albany, GA.......................................... 1.0783 1.0530
Alexandria, LA...................................... 0.8262 0.8774
Amarillo, TX........................................ 0.8663 0.9064
Anchorage, AK....................................... 1.2967 1.1947
Ann Arbor, MI....................................... 1.1177 1.0792
Atlanta, GA......................................... 0.9945 0.9962
Atlantic-Cape May, NJ............................... 1.0998 1.0673
Augusta-Aiken, GA-SC................................ 0.9226 0.9463
Baltimore, MD....................................... 0.9485 0.9644
Barnstable-Yarmouth, MA............................. 1.3694 1.2402
Baton Rouge, LA..................................... 0.8856 0.9202
Benton Harbor, MI................................... 0.9133 0.9398
Bergen-Passaic, NJ.................................. 1.1727 1.1153
Billings, MT........................................ 0.9577 0.9708
Binghamton, NY...................................... 0.8723 0.9107
Birmingham, AL...................................... 0.8574 0.9000
Bismarck, ND........................................ 0.8016 0.8595
Bloomington, IN..................................... 0.9294 0.9511
Boise City, ID...................................... 0.9133 0.9398
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH 1.1239 1.0833
(NH, RI, and VT Hospitals).........................
Bryan-College Station, TX........................... 0.8306 0.8806
Burlington, VT (VT Hospitals)....................... 0.9538 0.9681
Burlington, VT (NY Hospital)........................ 0.9238 0.9472
Casper, WY.......................................... 0.9046 0.9336
Champaign-Urbana, IL................................ 0.9353 0.9552
Charleston-North Charleston, SC..................... 0.9094 0.9370
Charleston, WV...................................... 0.9003 0.9306
Charlotte-Gastonia-Rock Hill, NC-SC................. 0.9307 0.9520
Chattanooga, TN-GA.................................. 0.9795 0.9859
Chicago, IL......................................... 1.0902 1.0609
Cincinnati, OH-KY-IN................................ 0.9330 0.9536
Clarksville-Hopkinsville, TN-KY..................... 0.8393 0.8869
Cleveland-Lorain-Elyria, OH......................... 0.9649 0.9758
Columbia, MO........................................ 0.8600 0.9019
Columbia, SC........................................ 0.9517 0.9667
Columbus, OH........................................ 0.9741 0.9822
Dallas, TX.......................................... 0.9220 0.9459
Danville, VA........................................ 0.8361 0.8846
Davenport-Moline--Rock Island, IA-IL................ 0.9021 0.9319
Dayton-Springfield, OH.............................. 0.9519 0.9668
Denver, CO.......................................... 1.0032 1.0022
Des Moines, IA...................................... 0.9087 0.9365
Dothan, AL.......................................... 0.8105 0.8660
Dover, DE........................................... 0.9349 0.9549
Duluth-Superior, MN-WI.............................. 1.0201 1.0137
Eau Claire, WI...................................... 0.9073 0.9356
Erie, PA............................................ 0.9021 0.9319
Eugene-Springfield, OR.............................. 1.1026 1.0692
Fargo-Moorhead, ND-MN (ND and SD Hospitals)......... 0.8597 0.9017
Fayetteville, NC.................................... 0.8553 0.8985
Flagstaff, AZ-UT.................................... 1.0678 1.0459
Flint, MI........................................... 1.1189 1.0800
Florence, AL........................................ 0.7621 0.8302
Florence, SC........................................ 0.8838 0.9189
[[Page 26370]]
Fort Collins-Loveland, CO........................... 1.1005 1.0678
Ft. Lauderdale, FL.................................. 1.0228 1.0156
Fort Pierce-Port St. Lucie, FL...................... 0.9672 0.9774
Fort Smith, AR-OK................................... 0.8634 0.9043
Fort Wayne, IN...................................... 0.8807 0.9167
Forth Worth-Arlington, TX........................... 0.9442 0.9614
Gadsden, AL......................................... 0.8491 0.8940
Grand Forks, ND-MN.................................. 1.0042 1.0029
Grand Junction, CO.................................. 0.9601 0.9725
Grand Rapids-Muskegon-Holland, MI................... 1.0150 1.0102
Great Falls, MT..................................... 0.9447 0.9618
Greeley, CO......................................... 0.9642 0.9753
Green Bay, WI....................................... 0.9359 0.9556
Greensboro-Winston-Salem-High Point, NC............. 0.9187 0.9436
Greenville, NC...................................... 0.9244 0.9476
Greenville-Spartanburg-Anderson, SC................. 0.9160 0.9417
Harrisburg-Lebanon-Carlisle, PA..................... 0.9360 0.9557
Hartford, CT (MA Hospital).......................... 1.1530 1.1024
Hattiesburg, MS..................................... 0.7608 0.8293
Hickory-Morganton-Lenoir, NC........................ 0.8766 0.9138
Honolulu, HI........................................ 1.1905 1.1268
Houston, TX......................................... 0.9661 0.9767
Huntington-Ashland, WV-KY-OH........................ 0.9721 0.9808
Huntsville, AL...................................... 0.8882 0.9220
Indianapolis, IN.................................... 0.9314 0.9525
Jackson, MS......................................... 0.8776 0.9145
Jackson, TN......................................... 0.8939 0.9261
Jacksonville, FL.................................... 0.8995 0.9300
Jersey City, NJ..................................... 1.0985 1.0664
Johnson City-Kingsport-Bristol, TN-VA............... 0.8412 0.8883
Joplin, MO.......................................... 0.7924 0.8527
Kalamazoo-Battlecreek, MI........................... 1.0144 1.0098
Kansas City, KS-MO.................................. 0.9629 0.9744
Knoxville, TN....................................... 0.8422 0.8890
Kokomo, IN.......................................... 0.9190 0.9438
Lafayette, LA....................................... 0.8852 0.9199
Lansing-East Lansing, MI............................ 0.9873 0.9913
Las Cruces, NM...................................... 0.8623 0.9035
Las Vegas, NV-AZ.................................... 1.0876 1.0592
Lexington, KY....................................... 0.8769 0.9140
Lima, OH............................................ 0.9497 0.9653
Lincoln, NE......................................... 0.9808 0.9868
Little Rock-North Little Rock, AR................... 0.8841 0.9191
Longview-Marshall, TX............................... 0.8403 0.8877
Los Angeles-Long Beach, CA.......................... 1.1955 1.1301
Louisville, KY-IN................................... 0.9395 0.9582
Lynchburg, VA....................................... 0.9090 0.9368
Macon, GA........................................... 0.9046 0.9336
Madison, WI......................................... 1.0354 1.0241
Mansfield, OH....................................... 0.8778 0.9146
Memphis, TN-AR-MS (AR Hospital)..................... 0.7538 0.8240
Memphis, TN-AR-MS (MS Hospital)..................... 0.7608 0.8293
Milwaukee-Waukesha, WI.............................. 0.9803 0.9865
Minneapolis-St. Paul, MN-WI......................... 1.1118 1.0753
Missoula, MT........................................ 0.9462 0.9628
Mobile, AL.......................................... 0.8205 0.8733
Monmouth-Ocean, NJ.................................. 1.1552 1.1038
Montgomery, AL...................................... 0.7610 0.8294
Myrtle Beach, SC (NC Hospital)...................... 0.8553 0.8985
Nashville, TN....................................... 0.9078 0.9359
New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT. 1.2135 1.1417
New London-Norwich, CT.............................. 1.1861 1.1240
New Orleans, LA..................................... 0.9283 0.9503
New York, NY........................................ 1.4445 1.2864
Newburgh, NY-PA..................................... 0.9919 0.9944
Norfolk-Virginia Beach-Newport News, VA-NC (NC 0.8553 0.8985
Hospital)..........................................
Oakland, CA......................................... 1.5051 1.3231
Ocala, FL........................................... 0.8904 0.9236
Odessa-Midland, TX.................................. 0.9058 0.9345
Oklahoma City, OK................................... 0.8910 0.9240
Omaha, NE-IA........................................ 0.9707 0.9798
Orange County, CA................................... 1.1560 1.1044
Orlando, FL......................................... 0.9856 0.9901
Peoria-Pekin, IL.................................... 0.8687 0.9081
Pine Bluff, AR...................................... 0.7762 0.8407
Pittsburgh, PA...................................... 0.9713 0.9803
Pittsfield, MA (VT Hospital)........................ 1.0032 1.0022
Pocatello, ID....................................... 0.9265 0.9491
Portland, ME........................................ 0.9622 0.9740
Portland-Vancouver, ORWA............................ 1.0928 1.0627
Provo-Orem, UT...................................... 0.9972 0.9981
Raleigh-Durham-Chapel Hill, NC...................... 0.9749 0.9827
Rapid City, SD...................................... 0.8463 0.8920
Redding, CA......................................... 1.1795 1.1197
Reno, NV............................................ 1.0508 1.0345
Richland-Kennewick-Pasco, WA........................ 1.1267 1.0851
Roanoke, VA......................................... 0.9543 0.9685
Rochester, MN....................................... 1.1361 1.0913
Rockford, IL........................................ 0.8904 0.9236
Sacramento, CA...................................... 1.2003 1.1332
Saginaw-Bay City-Midland, MI........................ 0.9475 0.9637
St. Cloud, MN....................................... 1.0164 1.0112
St. Joseph, MO...................................... 0.9036 0.9329
St. Louis, MO-IL.................................... 0.9114 0.9384
Salinas, CA......................................... 1.4649 1.2988
Salt Lake City-Ogden, UT............................ 0.9661 0.9767
San Diego, CA....................................... 1.1901 1.1266
Santa Cruz-Watsonville, CA.......................... 1.2834 1.1863
Santa Fe, NM........................................ 0.9383 0.9573
Santa Rosa, CA...................................... 1.2832 1.1862
Seattle-Bellevue-Everett, WA........................ 1.1134 1.0763
Sherman-Denison, TX................................. 0.8619 0.9032
Sioux City, IA-NE................................... 0.8571 0.8998
South Bend, IN...................................... 1.0233 1.0159
Spokane, WA......................................... 1.1608 1.1075
Springfield, IL..................................... 0.8744 0.9122
Springfield, MO..................................... 0.8089 0.8648
Syracuse, NY........................................ 0.9662 0.9767
Tampa-St. Petersburg-Clearwater, FL................. 0.9111 0.9382
Texarkana, AR-Texarkana, TX......................... 0.7962 0.8555
Toledo, OH.......................................... 0.9705 0.9797
Topeka, KS.......................................... 0.9134 0.9399
Tucson, AZ.......................................... 0.8826 0.9180
Tulsa, OK........................................... 0.8698 0.9089
Tuscaloosa, AL...................................... 0.8081 0.8642
Tyler, TX........................................... 0.9077 0.9358
Victoria, TX........................................ 0.8133 0.8680
Washington, DC-MD-VA-WV............................. 1.0832 1.0563
Waterloo-Cedar Falls, IA............................ 0.8932 0.9256
Wausau, WI.......................................... 0.9511 0.9663
Wichita, KS......................................... 0.9290 0.9508
Rural Alabama....................................... 0.7610 0.8294
Rural Florida....................................... 0.8904 0.9236
Rural Illinois...................................... 0.8320 0.8817
Rural Louisiana..................................... 0.7921 0.8525
Rural Michigan...................................... 0.9133 0.9398
Rural Minnesota..................................... 0.9116 0.9386
Rural Missouri...................................... 0.7766 0.8410
Rural Montana....................................... 0.9017 0.9316
Rural Oregon........................................ 1.0300 1.0204
Rural Texas (OK Hospital)........................... 0.7622 0.8303
Rural Washington.................................... 1.0763 1.0516
Rural West Virginia................................. 0.8321 0.8817
Rural Wisconsin..................................... 0.9073 0.9356
Rural Wyoming....................................... 0.8905 0.9237
------------------------------------------------------------------------
Table 4D.--Average Hourly Wage for Urban Areas
------------------------------------------------------------------------
Average
Urban area hourly
wage
------------------------------------------------------------------------
Abilene, TX.................................................. 18.0486
Aguadilla, PR................................................ 10.4725
Akron, OH.................................................... 22.9067
Albany, GA................................................... 25.7222
Albany-Schenectady-Troy, NY.................................. 18.5809
Albuquerque, NM.............................................. 20.3203
Alexandria, LA............................................... 17.8813
Allentown-Bethlehem-Easton, PA............................... 21.3707
Altoona, PA.................................................. 20.0974
Amarillo, TX................................................. 18.7968
Anchorage, AK................................................ 27.9780
Ann Arbor, MI................................................ 24.4830
Anniston, AL................................................. 18.0781
Appleton-Oshkosh-Neenah, WI.................................. 19.7485
Arecibo, PR.................................................. 9.8505
[[Page 26371]]
Asheville, NC................................................ 20.6721
Athens, GA................................................... 21.3273
Atlanta, GA.................................................. 21.5792
Atlantic-Cape May, NJ........................................ 24.3464
Auburn-Opelika, AL........................................... 17.7284
Augusta-Aiken, GA-SC......................................... 20.0184
Austin-San Marcos, TX........................................ 20.4753
Bakersfield, CA.............................................. 21.1738
Baltimore, MD................................................ 20.4985
Bangor, ME................................................... 20.8595
Barnstable-Yarmouth, MA...................................... 30.2448
Baton Rouge, LA.............................................. 19.4498
Beaumont-Port Arthur, TX..................................... 18.1415
Bellingham, WA............................................... 24.9338
Benton Harbor, MI............................................ 19.0728
Bergen-Passaic, NJ........................................... 25.6998
Billings, MT................................................. 20.6821
Biloxi-Gulfport-Pascagoula, MS............................... 17.9703
Binghamton, NY............................................... 18.9273
Birmingham, AL............................................... 18.5525
Bismarck, ND................................................. 17.1607
Bloomington,IN............................................... 19.2118
Bloomington-Normal, IL....................................... 20.0254
Boise City, ID............................................... 19.7312
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH............. 24.3877
Boulder-Longmont, CO......................................... 21.2598
Brazoria, TX................................................. 18.9889
Bremerton, WA................................................ 24.0180
Brownsville-Harlingen-San Benito, TX......................... 19.0812
Bryan-College Station, TX.................................... 17.9622
Buffalo-Niagara Falls, NY.................................... 20.7580
Burlington, VT............................................... 23.6135
Caguas, PR................................................... 9.9614
Canton-Massillon, OH......................................... 18.8702
Casper, WY................................................... 19.0746
Cedar Rapids, IA............................................. 18.2191
Champaign-Urbana, IL......................................... 20.1555
Charleston-North Charleston, SC.............................. 19.7335
Charleston, WV............................................... 20.2316
Charlotte-Gastonia-Rock Hill, NC-SC.......................... 20.1566
Charlottesville, VA.......................................... 23.3140
Chattanooga, TN-GA........................................... 21.8793
Cheyenne, WY................................................. 18.3270
Chicago, IL.................................................. 23.9273
Chico-Paradise, CA........................................... 23.1834
Cincinnati, OH-KY-IN......................................... 20.2453
Clarksville-Hopkinsville, TN-KY.............................. 17.9692
Cleveland-Lorain-Elyria, OH.................................. 20.9457
Colorado Springs, CO......................................... 21.1998
Columbia, MO................................................. 18.6606
Columbia, SC................................................. 20.9200
Columbus, GA-AL.............................................. 18.6769
Columbus, OH................................................. 21.1363
Corpus Christi, TX........................................... 18.4356
Corvallis, OR................................................ 24.8210
Cumberland, MD-WV............................................ 18.3080
Dallas, TX................................................... 20.0063
Danville, VA................................................. 18.5023
Davenport-Moline-Rock Island,
IA-IL..................................................... 19.5749
Dayton-Springfield, OH....................................... 20.6558
Daytona Beach, FL............................................ 20.0411
Decatur, AL.................................................. 18.7206
Decatur, IL.................................................. 18.6640
Denver, CO................................................... 21.7676
Des Moines, IA............................................... 19.9873
Detroit, MI.................................................. 21.8228
Dothan, AL................................................... 17.4329
Dover, DE.................................................... 23.9388
Dubuque, IA.................................................. 19.3729
Duluth-Superior, MN-WI....................................... 22.0638
Dutchess County, NY.......................................... 22.3565
Eau Claire, WI............................................... 17.5107
El Paso, TX.................................................. 19.9962
Elkhart-Goshen, IN........................................... 20.7202
Elmira, NY................................................... 18.7582
Enid, OK..................................................... 19.0534
Erie, PA..................................................... 19.5749
Eugene-Springfield, OR....................................... 23.9117
Evansville, Henderson, IN-KY................................. 17.3973
Fargo-Moorhead, ND-MN........................................ 19.1596
Fayetteville, NC............................................. 18.7438
Fayetteville-Springdale-Rogers, AR........................... 17.3575
Flagstaff, AZ-UT............................................. 23.5301
Flint, MI.................................................... 24.1126
Florence, AL................................................. 16.4548
Florence, SC................................................. 19.1780
Fort Collins-Loveland, CO.................................... 23.3920
Fort Lauderdale, FL.......................................... 22.1262
Fort Myers-Cape Coral, FL.................................... 19.7718
Fort Pierce-Port St. Lucie, FL............................... 20.7352
Fort Smith, AR-OK............................................ 19.2209
Fort Walton Beach, FL........................................ 20.2902
Fort Wayne, IN............................................... 18.9774
Fort Worth-Arlington, TX..................................... 20.4871
Fresno, CA................................................... 22.0987
Gadsden, AL.................................................. 18.4245
Gainesville, FL.............................................. 22.3195
Galveston-Texas City, TX..................................... 22.3151
Gary, IN..................................................... 20.4033
Glens Falls, NY.............................................. 18.2226
Goldsboro, NC................................................ 18.4077
Grand Forks, ND-MN........................................... 22.1477
Grand Junction, CO........................................... 20.0924
Grand Rapids-Muskegon-Holland, MI............................ 22.2552
Great Falls, MT.............................................. 19.9908
Greeley, CO.................................................. 21.4997
Green Bay, WI................................................ 20.3069
Greensboro-Winston-Salem-High Point, NC...................... 19.9482
Greenville, NC............................................... 20.5145
Greenville-Spartanburg-Anderson, SC.......................... 19.8759
Hagerstown, MD............................................... 20.9333
Hamilton-Middletown, OH...................................... 19.2938
Harrisburg-Lebanon-Carlisle, PA.............................. 20.5425
Hartford, CT................................................. 24.8641
Hattiesburg, MS.............................................. 16.4489
Hickory-Morganton-Lenoir, NC................................. 19.9965
Honolulu, HI................................................. 25.7981
Houma, LA.................................................... 17.8310
Houston, TX.................................................. 20.9625
Huntington-Ashland, WV-KY-OH................................. 21.6140
Huntsville, AL............................................... 19.7211
Indianapolis, IN............................................. 20.2095
Iowa City, IA................................................ 21.1537
Jackson, MI.................................................. 19.4234
Jackson, MS.................................................. 19.2901
Jackson, TN.................................................. 19.3964
Jacksonville, FL............................................. 19.5189
Jacksonville, NC............................................. 17.0264
Jamestown, NY................................................ 17.1320
Janesville-Beloit, WI........................................ 21.3868
Jersey City, NJ.............................................. 23.7469
Johnson City-Kingsport-Bristol,
TN-VA...................................................... 18.0944
Johnstown, PA................................................ 20.7614
Jonesboro, AR................................................ 18.6323
Joplin, MO................................................... 17.0944
Kalamazoo-Battlecreek, MI.................................... 22.2348
Kankakee, IL................................................. 19.4290
Kansas City, KS-MO........................................... 20.8941
Kenosha, WI.................................................. 21.0547
Killeen-Temple, TX........................................... 22.3946
Knoxville, TN................................................ 18.1724
Kokomo, IN................................................... 19.8136
La Crosse, WI-MN............................................. 20.4875
Lafayette, LA................................................ 19.1482
Lafayette, IN................................................ 19.7271
Lake Charles, LA............................................. 16.2042
Lakeland-Winter Haven, FL.................................... 20.7380
Lancaster, PA................................................ 20.1227
Lansing-East Lansing, MI..................................... 21.4235
Laredo, TX................................................... 16.5720
Las Cruces, NM............................................... 18.9734
Las Vegas, NV-AZ............................................. 23.6000
Lawrence, KS................................................. 17.9498
Lawton, OK................................................... 19.8665
Lewiston-Auburn, ME.......................................... 19.6684
Lexington, KY................................................ 19.3574
Lima, OH..................................................... 20.9055
Lincoln, NE.................................................. 21.1236
Little Rock-North Little Rock, AR............................ 19.4396
Longview-Marshall, TX........................................ 19.1300
Los Angeles-Long Beach, CA................................... 25.8459
Louisville, KY-IN............................................ 20.3861
Lubbock, TX.................................................. 19.1566
Lynchburg, VA................................................ 20.0013
Macon, GA.................................................... 19.6297
Madison, WI.................................................. 22.4673
Mansfield, OH................................................ 19.0435
Mayaguez, PR................................................. 10.0185
McAllen-Edinburg-Mission, TX................................. 18.2331
Medford-Ashland, OR.......................................... 22.6499
Melbourne-Titusville-Palm Bay, FL............................ 21.0752
Memphis, TN-AR-MS............................................ 15.8781
Merced, CA................................................... 21.1426
Miami, FL.................................................... 22.0202
Middlesex-Somerset-Hunterdon, NJ............................. 24.8629
Milwaukee-Waukesha, WI....................................... 21.2711
Minneapolis-St. Paul, MN-WI.................................. 24.1246
Missoula, MT................................................. 20.4135
Mobile, AL................................................... 17.8029
Modesto, CA.................................................. 22.7416
Monmouth-Ocean, NJ........................................... 24.6814
Monroe, LA................................................... 18.3733
Montgomery, AL............................................... 16.4427
Muncie, IN................................................... 23.2904
Myrtle Beach, SC............................................. 18.7864
Naples, FL................................................... 20.3889
Nashville, TN................................................ 19.9647
Nassau-Suffolk, NY........................................... 30.5221
New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT.......... 26.9488
New London-Norwich, CT....................................... 26.0037
New Orleans, LA.............................................. 20.1432
New York, NY................................................. 31.3439
Newark, NJ................................................... 25.6220
Newburgh, NY-PA.............................................. 23.7525
Norfolk-Virginia Beach-Newport
News, VA-NC................................................ 18.2637
[[Page 26372]]
Oakland, CA.................................................. 32.6592
Ocala, FL.................................................... 19.2230
Odessa-Midland, TX........................................... 19.8941
Oklahoma City, OK............................................ 19.3346
Olympia, WA.................................................. 23.4064
Omaha, NE-IA................................................. 21.0639
Orange County, CA............................................ 25.1808
Orlando, FL.................................................. 21.6103
Owensboro, KY................................................ 16.7178
Panama City, FL.............................................. 19.8085
Parkersburg-Marietta, WV-OH.................................. 17.5453
Pensacola, FL................................................ 17.8738
Peoria-Pekin, IL............................................. 18.7922
Philadelphia, PA-NJ.......................................... 23.1316
Phoenix-Mesa, AZ............................................. 20.6836
Pine Bluff, AR............................................... 17.0672
Pittsburgh, PA............................................... 21.3039
Pittsfield, MA............................................... 22.6239
Pocatello, ID................................................ 23.4749
Ponce, PR.................................................... 9.4317
Portland, ME................................................. 21.2189
Portland-Vancouver, OR-WA.................................... 23.7092
Providence-Warwick, RI....................................... 23.7714
Provo-Orem, UT............................................... 21.5911
Pueblo, CO................................................... 18.5332
Punta Gorda, FL.............................................. 20.7540
Racine, WI................................................... 20.1753
Raleigh-Durham-Chapel Hill, NC............................... 21.1552
Rapid City, SD............................................... 18.3452
Reading, PA.................................................. 19.9691
Redding, CA.................................................. 25.5947
Reno, NV..................................................... 22.8021
Richland-Kennewick-Pasco, WA................................. 25.0933
Richmond-Petersburg, VA...................................... 21.0026
Riverside-San Bernardino, CA................................. 24.4131
Roanoke, VA.................................................. 20.7061
Rochester, MN................................................ 24.6529
Rochester, NY................................................ 19.1942
Rockford, IL................................................. 19.3204
Rocky Mount, NC.............................................. 19.2567
Sacramento, CA............................................... 26.0102
Saginaw-Bay City-Midland, MI................................. 20.5596
St. Cloud, MN................................................ 22.0551
St. Joseph, MO............................................... 20.0604
St. Louis, MO-IL............................................. 19.7758
Salem, OR.................................................... 22.3396
Salinas, CA.................................................. 31.7057
Salt Lake City-Ogden, UT..................................... 20.9541
San Angelo, TX............................................... 16.8092
San Antonio, TX.............................................. 17.5486
San Diego, CA................................................ 25.8245
San Francisco, CA............................................ 31.2006
San Jose, CA................................................. 31.3127
San Juan-Bayamon, PR......................................... 10.1790
San Luis Obispo-Atascadero-
Paso Robles, CA............................................ 23.3363
Santa Barbara-Santa Maria-
Lompoc, CA................................................. 23.2791
Santa Cruz-Watsonville, CA................................... 31.9763
Santa Fe, NM................................................. 20.3593
Santa Rosa, CA............................................... 28.6042
Sarasota-Bradenton, FL....................................... 20.9819
Savannah, GA................................................. 18.8537
Scranton-Wilkes Barre-Hazleton,
PA........................................................ 18.1723
Seattle-Bellevue-Everett, WA................................. 24.0236
Sharon, PA................................................... 17.3633
Sheboygan, WI................................................ 18.3680
Sherman-Denison, TX.......................................... 18.3921
Shreveport-Bossier City, LA.................................. 19.2092
Sioux City, IA-NE............................................ 18.5977
Sioux Falls, SD.............................................. 19.2902
South Bend, IN............................................... 22.2041
Spokane, WA.................................................. 25.9937
Springfield, IL.............................................. 18.9742
Springfield, MO.............................................. 18.1326
Springfield, MA.............................................. 23.4382
State College, PA............................................ 19.7770
Steubenville-Weirton, OH-WV.................................. 18.7875
Stockton-Lodi, CA............................................ 23.2417
Sumter, SC................................................... 15.4277
Syracuse, NY................................................. 20.8181
Tacoma, WA................................................... 25.2962
Tallahassee, FL.............................................. 18.6152
Tampa-St. Petersburg-Clearwater, FL.......................... 19.5050
Terre Haute, IN.............................................. 15.3117
Texarkana, AR-Texarkana, TX.................................. 17.0551
Toledo, OH................................................... 21.4500
Topeka, KS................................................... 19.8204
Trenton, NJ.................................................. 21.5233
Tucson, AZ................................................... 19.0859
Tulsa, OK.................................................... 18.8729
Tuscaloosa, AL............................................... 17.5354
Tyler, TX.................................................... 20.1140
Utica-Rome, NY............................................... 18.2490
Vallejo-Fairfield-Napa, CA................................... 28.7082
Ventura, CA.................................................. 24.1637
Victoria, TX................................................. 17.6229
Vineland-Millville-Bridgeton, NJ............................. 22.7012
Visalia-Tulare-Porterville, CA............................... 21.2165
Waco, TX..................................................... 18.2321
Washington, DC-MD-VA-WV...................................... 23.5031
Waterloo-Cedar Falls, IA..................................... 18.4528
Wausau, WI................................................... 20.5783
West Palm Beach-Boca Raton, FL............................... 21.1018
Wheeling, OH-WV.............................................. 16.9649
Wichita, KS.................................................. 20.7737
Wichita Falls, TX............................................ 16.6396
Williamsport, PA............................................. 18.2295
Wilmington-Newark, DE-MD..................................... 24.4776
Wilmington, NC............................................... 20.5573
Yakima, WA................................................... 21.7819
Yolo, CA..................................................... 22.2646
York, PA..................................................... 20.4558
Youngstown-Warren, OH........................................ 20.8393
Yuba City, CA................................................ 23.4776
Yuma, AZ..................................................... 20.8420
------------------------------------------------------------------------
Table 4E.--Average Hourly Wage for Rural Areas
------------------------------------------------------------------------
Average
Nonurban area hourly
wage
------------------------------------------------------------------------
Alabama...................................................... 16.4226
Alaska....................................................... 27.5158
Arizona...................................................... 18.2279
Arkansas..................................................... 16.3570
California................................................... 21.6246
Colorado..................................................... 19.9177
Connecticut.................................................. 25.5994
Delaware..................................................... 20.2855
Florida...................................................... 19.2234
Georgia...................................................... 18.4650
Hawaii....................................................... 24.8190
Idaho........................................................ 19.1619
Illinois..................................................... 18.0540
Indiana...................................................... 19.1101
Iowa......................................................... 17.7834
Kansas....................................................... 16.7288
Kentucky..................................................... 17.3951
Louisiana.................................................... 17.1441
Maine........................................................ 19.1234
Maryland..................................................... 18.9146
Massachusetts................................................ 24.6234
Michigan..................................................... 19.7353
Minnesota.................................................... 19.7808
Mississippi.................................................. 16.5082
Missouri..................................................... 16.8219
Montana...................................................... 19.5658
Nebraska..................................................... 17.9331
Nevada....................................................... 20.2962
New Hampshire................................................ 21.6890
New Jersey \1\............................................... .........
New Mexico................................................... 18.2818
New York..................................................... 18.5706
North Carolina............................................... 18.5592
North Dakota................................................. 16.7027
Ohio......................................................... 19.0464
Oklahoma..................................................... 16.5386
Oregon....................................................... 22.3491
Pennsylvania................................................. 18.8470
Puerto Rico.................................................. 9.1823
Rhode Island \1\............................................. .........
South Carolina............................................... 18.3244
South Dakota................................................. 16.8938
Tennessee.................................................... 17.3149
Texas........................................................ 16.3108
Utah......................................................... 19.9234
Vermont...................................................... 20.3374
Virginia..................................................... 18.1413
Washington................................................... 23.3538
West Virginia................................................ 18.0536
Wisconsin.................................................... 19.6848
Wyoming...................................................... 19.6292
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban.
[[Page 26373]]
Table 4F.--Puerto Rico Wage Index and Capital Geographic Adjustment Factor (GAF)
----------------------------------------------------------------------------------------------------------------
Wage index-- GAF--
Area Wage index GAF reclass. reclass.
hospitals hospitals
----------------------------------------------------------------------------------------------------------------
Aguadilla, PR................................... 1.0507 1.0344 .............. ..............
Arecibo, PR..................................... 0.9883 0.9920 .............. ..............
Caguas, PR...................................... 0.9995 0.9997 .............. ..............
Mayaguez, PR.................................... 1.0052 1.0036 .............. ..............
Ponce, PR....................................... 0.9463 0.9629 .............. ..............
San Juan-Bayamon, PR............................ 1.0213 1.0145 .............. ..............
Rural Puerto Rico............................... 0.9213 0.9454 .............. ..............
----------------------------------------------------------------------------------------------------------------
Table 5.--List of Diagnosis Related Groups (DRGs), Relative Weighting Factors, Geometric and Arithmetic Mean
Length of Stay
----------------------------------------------------------------------------------------------------------------
Relative Geometric Arithmetic
DRG MDC Type DRG title weights mean LOS mean LOS
----------------------------------------------------------------------------------------------------------------
1.............. 01 SURG CRANIOTOMY AGE >17 EXCEPT 3.1023 6.3 9.1
FOR TRAUMA.
2.............. 01 SURG CRANIOTOMY FOR TRAUMA AGE 3.1157 7.3 9.7
>17.
3.............. 01 SURG * CRANIOTOMY AGE 0-17..... 1.9575 12.7 12.7
4.............. 01 SURG SPINAL PROCEDURES......... 2.2879 4.8 7.3
5.............. 01 SURG EXTRACRANIAL VASCULAR 1.4334 2.3 3.3
PROCEDURES.
6.............. 01 SURG CARPAL TUNNEL RELEASE..... .8265 2.2 3.2
7.............. 01 SURG PERIPH & CRANIAL NERVE & 2.5918 6.9 10.3
OTHER NERV SYST PROC W CC.
8.............. 01 SURG PERIPH & CRANIAL NERVE & 1.3987 2.1 3.0
OTHER NERV SYST PROC W/O
CC.
9.............. 01 MED SPINAL DISORDERS & 1.3176 4.8 6.7
INJURIES.
10............. 01 MED NERVOUS SYSTEM NEOPLASMS W 1.2276 4.9 6.7
CC.
11............. 01 MED NERVOUS SYSTEM NEOPLASMS W/ .8343 3.1 4.2
O CC.
12............. 01 MED DEGENERATIVE NERVOUS .8916 4.5 6.1
SYSTEM DISORDERS.
13............. 01 MED MULTIPLE SCLEROSIS & .7675 4.1 5.1
CEREBELLAR ATAXIA.
14............. 01 MED SPECIFIC CEREBROVASCULAR 1.2205 4.8 6.2
DISORDERS EXCEPT TIA.
15............. 01 MED TRANSIENT ISCHEMIC ATTACK .7486 2.9 3.6
& PRECEREBRAL OCCLUSIONS.
16............. 01 MED NONSPECIFIC 1.1670 4.6 6.1
CEREBROVASCULAR DISORDERS
W CC.
17............. 01 MED NONSPECIFIC .6563 2.7 3.4
CEREBROVASCULAR DISORDERS
W/O CC.
18............. 01 MED CRANIAL & PERIPHERAL NERVE .9616 4.3 5.6
DISORDERS W CC.
19............. 01 MED CRANIAL & PERIPHERAL NERVE .6975 2.9 3.7
DISORDERS W/O CC.
20............. 01 MED NERVOUS SYSTEM INFECTION 2.7645 7.9 10.5
EXCEPT VIRAL MENINGITIS.
21............. 01 MED VIRAL MENINGITIS.......... 1.5003 5.2 6.9
22............. 01 MED HYPERTENSIVE 1.0084 3.8 5.0
ENCEPHALOPATHY.
23............. 01 MED NONTRAUMATIC STUPOR & COMA .8021 3.2 4.2
24............. 01 MED SEIZURE & HEADACHE AGE >17 .9925 3.7 5.0
W CC.
25............. 01 MED SEIZURE & HEADACHE AGE >17 .6045 2.6 3.3
W/O CC.
26............. 01 MED SEIZURE & HEADACHE AGE 0- .6453 2.4 3.2
17.
27............. 01 MED TRAUMATIC STUPOR & COMA, 1.2871 3.2 5.1
COMA >1 HR.
28............. 01 MED TRAUMATIC STUPOR & COMA, 1.3124 4.5 6.3
COMA 1 HR AGE 17 W CC.
29............. 01 MED TRAUMATIC STUPOR & COMA, .7037 2.8 3.7
COMA 1 HR AGE 17 W/O CC.
30............. 01 MED * TRAUMATIC STUPOR & COMA, .3311 2.0 2.0
COMA 1 HR AGE 0-17.
31............. 01 MED CONCUSSION AGE >17 W CC... .8655 3.1 4.2
32............. 01 MED CONCUSSION AGE >17 W/O CC. .5374 2.1 2.7
33............. 01 MED * CONCUSSION AGE 0-17..... .2080 1.6 1.6
34............. 01 MED OTHER DISORDERS OF NERVOUS 1.0108 3.8 5.2
SYSTEM W CC.
35............. 01 MED OTHER DISORDERS OF NERVOUS .6051 2.7 3.4
SYSTEM W/O CC.
36............. 02 SURG RETINAL PROCEDURES........ .6636 1.2 1.4
37............. 02 SURG ORBITAL PROCEDURES........ 1.0020 2.6 3.7
38............. 02 SURG PRIMARY IRIS PROCEDURES... .4832 1.8 2.5
39............. 02 SURG LENS PROCEDURES WITH OR .5803 1.5 1.9
WITHOUT VITRECTOMY.
40............. 02 SURG EXTRAOCULAR PROCEDURES .8625 2.3 3.6
EXCEPT ORBIT AGE >17.
41............. 02 SURG * EXTRAOCULAR PROCEDURES .3370 1.6 1.6
EXCEPT ORBIT AGE 0-17.
42............. 02 SURG INTRAOCULAR PROCEDURES .6472 1.6 2.2
EXCEPT RETINA, IRIS &
LENS.
43............. 02 MED HYPHEMA................... .5008 2.6 3.3
44............. 02 MED ACUTE MAJOR EYE INFECTIONS .6293 4.0 5.0
45............. 02 MED NEUROLOGICAL EYE DISORDERS .7031 2.7 3.3
46............. 02 MED OTHER DISORDERS OF THE EYE .7767 3.5 4.6
AGE >17 W CC.
47............. 02 MED OTHER DISORDERS OF THE EYE .4921 2.5 3.3
AGE >17 W/O CC.
48............. 02 MED * OTHER DISORDERS OF THE .2968 2.9 2.9
EYE AGE 0-17.
49............. 03 SURG MAJOR HEAD & NECK 1.8368 3.5 5.0
PROCEDURES.
50............. 03 SURG SIALOADENECTOMY........... .8531 1.6 2.0
51............. 03 SURG SALIVARY GLAND PROCEDURES .7986 1.8 2.6
EXCEPT SIALOADENECTOMY.
52............. 03 SURG CLEFT LIP & PALATE REPAIR. .8428 1.6 2.1
53............. 03 SURG SINUS & MASTOID PROCEDURES 1.2137 2.3 3.7
AGE >17.
[[Page 26374]]
54............. 03 SURG * SINUS & MASTOID .4812 3.2 3.2
PROCEDURES AGE 0-17.
55............. 03 SURG MISCELLANEOUS EAR, NOSE, .9049 1.9 2.9
MOUTH & THROAT PROCEDURES.
56............. 03 SURG RHINOPLASTY............... .9487 2.1 3.1
57............. 03 SURG T & A PROC, EXCEPT 1.0775 2.6 4.0
TONSILLECTOMY & /OR
ADENOIDECTOMY ONLY, AGE
>17.
58............. 03 SURG * T & A PROC, EXCEPT .2733 1.5 1.5
TONSILLECTOMY & /OR
ADENOIDECTOMY ONLY, AGE 0-
17.
59............. 03 SURG TONSILLECTOMY & /OR .6824 1.8 2.4
ADENOIDECTOMY ONLY, AGE
>17.
60............. 03 SURG * TONSILLECTOMY & /OR .2081 1.5 1.5
ADENOIDECTOMY ONLY, AGE 0-
17.
61............. 03 SURG MYRINGOTOMY W TUBE 1.2708 2.8 4.9
INSERTION AGE >17.
62............. 03 SURG * MYRINGOTOMY W TUBE .2946 1.3 1.3
INSERTION AGE 0-17.
63............. 03 SURG OTHER EAR, NOSE, MOUTH & 1.3393 3.0 4.3
THROAT O.R. PROCEDURES.
64............. 03 MED EAR, NOSE, MOUTH & THROAT 1.2285 4.2 6.5
MALIGNANCY.
65............. 03 MED DYSEQUILIBRIUM............ .5383 2.3 2.9
66............. 03 MED EPISTAXIS................. .5580 2.5 3.2
67............. 03 MED EPIGLOTTITIS.............. .8088 2.8 3.5
68............. 03 MED OTITIS MEDIA & URI AGE >17 .6744 3.4 4.2
W CC.
69............. 03 MED OTITIS MEDIA & URI AGE >17 .5114 2.7 3.3
W/O CC.
70............. 03 MED OTITIS MEDIA & URI AGE 0- .4666 2.4 2.9
17.
71............. 03 MED LARYNGOTRACHEITIS......... .7730 3.0 3.9
72............. 03 MED NASAL TRAUMA & DEFORMITY.. .6409 2.6 3.3
73............. 03 MED OTHER EAR, NOSE, MOUTH & .7763 3.3 4.3
THROAT DIAGNOSES AGE >17.
74............. 03 MED * OTHER EAR, NOSE, MOUTH & .3348 2.1 2.1
THROAT DIAGNOSES AGE 0-17.
75............. 04 SURG MAJOR CHEST PROCEDURES.... 3.1338 7.8 10.0
76............. 04 SURG OTHER RESP SYSTEM O.R. 2.7905 8.4 11.3
PROCEDURES W CC.
77............. 04 SURG OTHER RESP SYSTEM O.R. 1.1793 3.4 4.9
PROCEDURES W/O CC.
78............. 04 MED PULMONARY EMBOLISM........ 1.3703 6.0 7.0
79............. 04 MED RESPIRATORY INFECTIONS & 1.6471 6.6 8.5
INFLAMMATIONS AGE >17 W
CC.
80............. 04 MED RESPIRATORY INFECTIONS & .9168 4.6 5.7
INFLAMMATIONS AGE >17 W/O
CC.
81............. 04 MED * RESPIRATORY INFECTIONS & 1.5162 6.1 6.1
INFLAMMATIONS AGE 0-17.
82............. 04 MED RESPIRATORY NEOPLASMS..... 1.3810 5.2 7.0
83............. 04 MED MAJOR CHEST TRAUMA W CC... .9752 4.4 5.6
84............. 04 MED MAJOR CHEST TRAUMA W/O CC. .5492 2.8 3.4
85............. 04 MED PLEURAL EFFUSION W CC..... 1.2201 4.9 6.4
86............. 04 MED PLEURAL EFFUSION W/O CC... .6990 2.9 3.8
87............. 04 MED PULMONARY EDEMA & 1.3746 4.8 6.3
RESPIRATORY FAILURE.
88............. 04 MED CHRONIC OBSTRUCTIVE .9314 4.2 5.2
PULMONARY DISEASE.
89............. 04 MED SIMPLE PNEUMONIA & 1.0638 5.0 6.0
PLEURISY AGE >17 W CC.
90............. 04 MED SIMPLE PNEUMONIA & .6540 3.6 4.2
PLEURISY AGE >17 W/O CC.
91............. 04 MED SIMPLE PNEUMONIA & .6702 2.8 3.3
PLEURISY AGE 0-17.
92............. 04 MED INTERSTITIAL LUNG DISEASE 1.1852 5.0 6.3
W CC.
93............. 04 MED INTERSTITIAL LUNG DISEASE .7211 3.3 4.0
W/O CC.
94............. 04 MED PNEUMOTHORAX W CC......... 1.1694 4.8 6.3
95............. 04 MED PNEUMOTHORAX W/O CC....... .6072 3.0 3.7
96............. 04 MED BRONCHITIS & ASTHMA AGE .7873 3.9 4.7
>17 W CC.
97............. 04 MED BRONCHITIS & ASTHMA AGE .5871 3.1 3.7
>17 W/O CC.
98............. 04 MED BRONCHITIS & ASTHMA AGE 0- .9098 3.0 4.7
17.
99............. 04 MED RESPIRATORY SIGNS & .7104 2.5 3.2
SYMPTOMS W CC.
100............ 04 MED RESPIRATORY SIGNS & .5415 1.8 2.2
SYMPTOMS W/O CC.
101............ 04 MED OTHER RESPIRATORY SYSTEM .8535 3.3 4.4
DIAGNOSES W CC.
102............ 04 MED OTHER RESPIRATORY SYSTEM .5522 2.1 2.7
DIAGNOSES W/O CC.
103............ PRE SURG HEART TRANSPLANT.......... 17.3527 28.8 48.6
104............ 05 SURG CARDIAC VALVE & OTHER 7.2014 8.9 11.7
MAJOR CARDIOTHORACIC PROC
W CARDIAC CATH.
105............ 05 SURG CARDIAC VALVE & OTHER 5.6515 7.4 9.3
MAJOR CARDIOTHORACIC PROC
W/O CARDIAC CATH.
106............ 05 SURG CORONARY BYPASS W PTCA.... 7.5379 9.4 11.2
107............ 05 SURG CORONARY BYPASS W CARDIAC 5.3870 9.2 10.4
CATH.
108............ 05 SURG OTHER CARDIOTHORACIC 5.6650 8.0 10.6
PROCEDURES.
109............ 05 SURG CORONARY BYPASS W/O PTCA 4.0244 6.8 7.7
OR CARDIAC CATH.
110............ 05 SURG MAJOR CARDIOVASCULAR 4.1440 7.1 9.5
PROCEDURES W CC.
111............ 05 SURG MAJOR CARDIOVASCULAR 2.2427 4.7 5.5
PROCEDURES W/O CC.
112............ 05 SURG PERCUTANEOUS 1.8729 2.6 3.8
CARDIOVASCULAR PROCEDURES.
113............ 05 SURG AMPUTATION FOR CIRC SYSTEM 2.7595 9.7 12.7
DISORDERS EXCEPT UPPER
LIMB & TOE.
114............ 05 SURG UPPER LIMB & TOE 1.5650 6.0 8.3
AMPUTATION FOR CIRC
SYSTEM DISORDERS.
[[Page 26375]]
115............ 05 SURG PRM CARD PACEM IMPL W 3.4763 6.0 8.4
AMI,HRT FAIL OR SHK,OR
AICD LEAD OR GNRTR PR.
116............ 05 SURG OTH PERM CARD PACEMAK IMPL 2.4225 2.6 3.7
OR PTCA W CORONARY ARTERY
STENT IMPLNT.
117............ 05 SURG CARDIAC PACEMAKER REVISION 1.2983 2.6 4.1
EXCEPT DEVICE REPLACEMENT.
118............ 05 SURG CARDIAC PACEMAKER DEVICE 1.4952 1.9 2.8
REPLACEMENT.
119............ 05 SURG VEIN LIGATION & STRIPPING. 1.2627 2.9 4.8
120............ 05 SURG OTHER CIRCULATORY SYSTEM 2.0394 4.9 8.1
O.R. PROCEDURES.
121............ 05 MED CIRCULATORY DISORDERS W 1.6191 5.5 6.7
AMI & MAJOR COMP,
DISCHARGED ALIVE.
122............ 05 MED CIRCULATORY DISORDERS W 1.0872 3.3 4.0
AMI W/O MAJOR COMP,
DISCHARGED ALIVE.
123............ 05 MED CIRCULATORY DISORDERS W 1.5531 2.8 4.6
AMI, EXPIRED.
124............ 05 MED CIRCULATORY DISORDERS 1.4152 3.3 4.4
EXCEPT AMI, W CARD CATH &
COMPLEX DIAG.
125............ 05 MED CIRCULATORY DISORDERS 1.0624 2.2 2.8
EXCEPT AMI, W CARD CATH W/
O COMPLEX DIAG.
126............ 05 MED ACUTE & SUBACUTE 2.5352 9.2 12.0
ENDOCARDITIS.
127............ 05 MED HEART FAILURE & SHOCK..... 1.0135 4.2 5.4
128............ 05 MED DEEP VEIN THROMBOPHLEBITIS .7644 5.0 5.8
129............ 05 MED CARDIAC ARREST, 1.0936 1.8 2.8
UNEXPLAINED.
130............ 05 MED PERIPHERAL VASCULAR .9474 4.7 5.9
DISORDERS W CC.
131............ 05 MED PERIPHERAL VASCULAR .5891 3.6 4.4
DISORDERS W/O CC.
132............ 05 MED ATHEROSCLEROSIS W CC...... .6703 2.4 3.1
133............ 05 MED ATHEROSCLEROSIS W/O CC.... .5656 1.9 2.4
134............ 05 MED HYPERTENSION.............. .5921 2.6 3.3
135............ 05 MED CARDIAC CONGENITAL & .9085 3.3 4.5
VALVULAR DISORDERS AGE
>17 W CC.
136............ 05 MED CARDIAC CONGENITAL & .6074 2.3 2.9
VALVULAR DISORDERS AGE
>17 W/O CC.
137............ 05 MED * CARDIAC CONGENITAL & .8170 3.3 3.3
VALVULAR DISORDERS AGE 0-
17.
138............ 05 MED CARDIAC ARRHYTHMIA & .8288 3.1 4.0
CONDUCTION DISORDERS W CC.
139............ 05 MED CARDIAC ARRHYTHMIA & .5139 2.0 2.5
CONDUCTION DISORDERS W/O
CC.
140............ 05 MED ANGINA PECTORIS........... .5737 2.2 2.7
141............ 05 MED SYNCOPE & COLLAPSE W CC... .7225 2.9 3.7
142............ 05 MED SYNCOPE & COLLAPSE W/O CC. .5556 2.2 2.7
143............ 05 MED CHEST PAIN................ .5403 1.8 2.2
144............ 05 MED OTHER CIRCULATORY SYSTEM 1.1676 3.8 5.4
DIAGNOSES W CC.
145............ 05 MED OTHER CIRCULATORY SYSTEM .6308 2.2 2.8
DIAGNOSES W/O CC.
146............ 06 SURG RECTAL RESECTION W CC..... 2.7439 8.9 10.2
147............ 06 SURG RECTAL RESECTION W/O CC... 1.6272 6.0 6.6
148............ 06 SURG MAJOR SMALL & LARGE BOWEL 3.4317 10.1 12.1
PROCEDURES W CC.
149............ 06 SURG MAJOR SMALL & LARGE BOWEL 1.5645 6.1 6.6
PROCEDURES W/O CC.
150............ 06 SURG PERITONEAL ADHESIOLYSIS W 2.8508 9.1 11.2
CC.
151............ 06 SURG PERITONEAL ADHESIOLYSIS W/ 1.3404 4.8 5.9
O CC.
152............ 06 SURG MINOR SMALL & LARGE BOWEL 1.9422 6.8 8.2
PROCEDURES W CC.
153............ 06 SURG MINOR SMALL & LARGE BOWEL 1.2045 4.9 5.5
PROCEDURES W/O CC.
154............ 06 SURG STOMACH, ESOPHAGEAL & 4.1504 10.1 13.3
DUODENAL PROCEDURES AGE
>17 W CC.
155............ 06 SURG STOMACH, ESOPHAGEAL & 1.3691 3.3 4.3
DUODENAL PROCEDURES AGE
>17 W/O CC.
156............ 06 SURG * STOMACH, ESOPHAGEAL & .8413 6.0 6.0
DUODENAL PROCEDURES AGE 0-
17.
157............ 06 SURG ANAL & STOMAL PROCEDURES W 1.2381 3.9 5.5
CC.
158............ 06 SURG ANAL & STOMAL PROCEDURES W/ .6630 2.1 2.6
O CC.
159............ 06 SURG HERNIA PROCEDURES EXCEPT 1.3341 3.8 5.0
INGUINAL & FEMORAL AGE
>17 W CC.
160............ 06 SURG HERNIA PROCEDURES EXCEPT .7828 2.2 2.7
INGUINAL & FEMORAL AGE
>17 W/O CC.
161............ 06 SURG INGUINAL & FEMORAL HERNIA 1.1022 2.9 4.2
PROCEDURES AGE >17 W CC.
162............ 06 SURG INGUINAL & FEMORAL HERNIA .6236 1.6 2.0
PROCEDURES AGE >17 W/O CC.
163............ 06 SURG * HERNIA PROCEDURES AGE 0- .8701 2.1 2.1
17.
164............ 06 SURG APPENDECTOMY W COMPLICATED 2.3776 7.1 8.4
PRINCIPAL DIAG W CC.
165............ 06 SURG APPENDECTOMY W COMPLICATED 1.2823 4.3 4.9
PRINCIPAL DIAG W/O CC.
166............ 06 SURG APPENDECTOMY W/O 1.4813 4.0 5.1
COMPLICATED PRINCIPAL
DIAG W CC.
167............ 06 SURG APPENDECTOMY W/O .8936 2.3 2.7
COMPLICATED PRINCIPAL
DIAG W/O CC.
168............ 03 SURG MOUTH PROCEDURES W CC..... 1.2069 3.2 4.6
169............ 03 SURG MOUTH PROCEDURES W/O CC... .7475 1.9 2.4
170............ 06 SURG OTHER DIGESTIVE SYSTEM 2.8739 7.7 11.2
O.R. PROCEDURES W CC.
[[Page 26376]]
171............ 06 SURG OTHER DIGESTIVE SYSTEM 1.1951 3.6 4.8
O.R. PROCEDURES W/O CC.
172............ 06 MED DIGESTIVE MALIGNANCY W CC. 1.3502 5.1 7.0
173............ 06 MED DIGESTIVE MALIGNANCY W/O .7641 2.8 3.9
CC.
174............ 06 MED G.I. HEMORRHAGE W CC...... .9981 3.9 4.8
175............ 06 MED G.I. HEMORRHAGE W/O CC.... .5495 2.5 2.9
176............ 06 MED COMPLICATED PEPTIC ULCER.. 1.1057 4.1 5.3
177............ 06 MED UNCOMPLICATED PEPTIC ULCER .8997 3.7 4.6
W CC.
178............ 06 MED UNCOMPLICATED PEPTIC ULCER .6593 2.6 3.1
W/O CC.
179............ 06 MED INFLAMMATORY BOWEL DISEASE 1.0583 4.7 6.0
180............ 06 MED G.I. OBSTRUCTION W CC..... .9426 4.2 5.4
181............ 06 MED G.I. OBSTRUCTION W/O CC... .5309 2.8 3.4
182............ 06 MED ESOPHAGITIS, GASTROENT & .7922 3.4 4.4
MISC DIGEST DISORDERS AGE
>17 W CC.
183............ 06 MED ESOPHAGITIS, GASTROENT & .5713 2.4 3.0
MISC DIGEST DISORDERS AGE
>17 W/O CC.
184............ 06 MED ESOPHAGITIS, GASTROENT & .5137 2.5 3.3
MISC DIGEST DISORDERS AGE
0-17.
185............ 03 MED DENTAL & ORAL DIS EXCEPT .8624 3.3 4.5
EXTRACTIONS &
RESTORATIONS, AGE >17.
186............ 03 MED * DENTAL & ORAL DIS EXCEPT .3207 2.9 2.9
EXTRACTIONS &
RESTORATIONS, AGE 0-17.
187............ 03 MED DENTAL EXTRACTIONS & .7687 2.9 3.8
RESTORATIONS.
188............ 06 MED OTHER DIGESTIVE SYSTEM 1.1005 4.1 5.6
DIAGNOSES AGE >17 W CC.
189............ 06 MED OTHER DIGESTIVE SYSTEM .5799 2.4 3.1
DIAGNOSES AGE >17 W/O CC.
190............ 06 MED OTHER DIGESTIVE SYSTEM .9912 4.1 6.0
DIAGNOSES AGE 0-17.
191............ 07 SURG PANCREAS, LIVER & SHUNT 4.3818 10.5 14.1
PROCEDURES W CC.
192............ 07 SURG PANCREAS, LIVER & SHUNT 1.7866 5.3 6.6
PROCEDURES W/O CC.
193............ 07 SURG BILIARY TRACT PROC EXCEPT 3.3954 10.3 12.6
ONLY CHOLECYST W OR W/O
C.D.E. W CC.
194............ 07 SURG BILIARY TRACT PROC EXCEPT 1.6141 5.6 6.8
ONLY CHOLECYST W OR W/O
C.D.E. W/O CC.
195............ 07 SURG CHOLECYSTECTOMY W C.D.E. W 2.9025 8.3 9.9
CC.
196............ 07 SURG CHOLECYSTECTOMY W C.D.E. W/ 1.6543 4.9 5.7
O CC.
197............ 07 SURG CHOLECYSTECTOMY EXCEPT BY 2.4551 7.2 8.7
LAPAROSCOPE W/O C.D.E. W
CC.
198............ 07 SURG CHOLECYSTECTOMY EXCEPT BY 1.2323 3.9 4.5
LAPAROSCOPE W/O C.D.E. W/
O CC.
199............ 07 SURG HEPATOBILIARY DIAGNOSTIC 2.3610 7.2 9.7
PROCEDURE FOR MALIGNANCY.
200............ 07 SURG HEPATOBILIARY DIAGNOSTIC 3.1765 7.0 10.8
PROCEDURE FOR NON-
MALIGNANCY.
201............ 07 SURG OTHER HEPATOBILIARY OR 3.4002 10.2 13.9
PANCREAS O.R. PROCEDURES.
202............ 07 MED CIRRHOSIS & ALCOHOLIC 1.3035 4.9 6.5
HEPATITIS.
203............ 07 MED MALIGNANCY OF 1.3284 5.0 6.7
HEPATOBILIARY SYSTEM OR
PANCREAS.
204............ 07 MED DISORDERS OF PANCREAS 1.2030 4.5 5.9
EXCEPT MALIGNANCY.
205............ 07 MED DISORDERS OF LIVER EXCEPT 1.2072 4.7 6.3
MALIG,CIRR,ALC HEPA W CC.
206............ 07 MED DISORDERS OF LIVER EXCEPT .6759 3.0 3.9
MALIG,CIRR,ALC HEPA W/O
CC.
207............ 07 MED DISORDERS OF THE BILIARY 1.1037 4.0 5.2
TRACT W CC.
208............ 07 MED DISORDERS OF THE BILIARY .6532 2.3 2.9
TRACT W/O CC.
209............ 08 SURG MAJOR JOINT & LIMB 2.0902 4.6 5.2
REATTACHMENT PROCEDURES
OF LOWER EXTREMITY.
210............ 08 SURG HIP & FEMUR PROCEDURES 1.8074 6.0 6.9
EXCEPT MAJOR JOINT AGE
>17 W CC.
211............ 08 SURG HIP & FEMUR PROCEDURES 1.2663 4.6 5.0
EXCEPT MAJOR JOINT AGE
>17 W/O CC.
212............ 08 SURG * HIP & FEMUR PROCEDURES .8449 11.1 11.1
EXCEPT MAJOR JOINT AGE 0-
17.
213............ 08 SURG AMPUTATION FOR 1.7751 6.4 8.7
MUSCULOSKELETAL SYSTEM &
CONN TISSUE DISORDERS.
214............ 08 SURG NO LONGER VALID........... .0000 .0 .0
215............ 08 SURG NO LONGER VALID........... .0000 .0 .0
216............ 08 SURG BIOPSIES OF 2.1983 7.1 9.8
MUSCULOSKELETAL SYSTEM &
CONNECTIVE TISSUE.
217............ 08 SURG WND DEBRID & SKN GRFT 2.9142 8.9 13.1
EXCEPT HAND, FOR
MUSCSKELET & CONN TISS
DIS.
218............ 08 SURG LOWER EXTREM & HUMER PROC 1.5309 4.2 5.4
EXCEPT HIP, FOOT, FEMUR
AGE >17 W CC.
219............ 08 SURG LOWER EXTREM & HUMER PROC 1.0219 2.7 3.2
EXCEPT HIP, FOOT, FEMUR
AGE >17 W/O CC.
220............ 08 SURG * LOWER EXTREM & HUMER .5828 5.3 5.3
PROC EXCEPT HIP, FOOT,
FEMUR AGE 0-17.
221............ 08 SURG NO LONGER VALID........... .0000 .0 .0
[[Page 26377]]
222............ 08 SURG NO LONGER VALID........... .0000 .0 .0
223............ 08 SURG MAJOR SHOULDER/ELBOW PROC, .9560 2.0 2.6
OR OTHER UPPER EXTREMITY
PROC W CC.
224............ 08 SURG SHOULDER,ELBOW OR FOREARM .7986 1.7 2.0
PROC,EXC MAJOR JOINT
PROC, W/O CC.
225............ 08 SURG FOOT PROCEDURES........... 1.0864 3.3 4.7
226............ 08 SURG SOFT TISSUE PROCEDURES W 1.4749 4.3 6.3
CC.
227............ 08 SURG SOFT TISSUE PROCEDURES W/O .8025 2.1 2.7
CC.
228............ 08 SURG MAJOR THUMB OR JOINT 1.0648 2.4 3.6
PROC,OR OTH HAND OR WRIST
PROC W CC.
229............ 08 SURG HAND OR WRIST PROC, EXCEPT .7157 1.8 2.4
MAJOR JOINT PROC, W/O CC.
230............ 08 SURG LOCAL EXCISION & REMOVAL 1.2592 3.4 5.1
OF INT FIX DEVICES OF HIP
& FEMUR.
231............ 08 SURG LOCAL EXCISION & REMOVAL 1.3813 3.2 4.8
OF INT FIX DEVICES EXCEPT
HIP & FEMUR.
232............ 08 SURG ARTHROSCOPY............... 1.0833 2.3 3.6
233............ 08 SURG OTHER MUSCULOSKELET SYS & 2.0825 5.3 7.7
CONN TISS O.R. PROC W CC.
234............ 08 SURG OTHER MUSCULOSKELET SYS & 1.2661 2.7 3.6
CONN TISS O.R. PROC W/O
CC.
235............ 08 MED FRACTURES OF FEMUR........ .7584 3.8 5.2
236............ 08 MED FRACTURES OF HIP & PELVIS. .7218 4.0 5.0
237............ 08 MED SPRAINS, STRAINS, & .5668 3.0 3.7
DISLOCATIONS OF HIP,
PELVIS & THIGH.
238............ 08 MED OSTEOMYELITIS............. 1.3520 6.4 8.6
239............ 08 MED PATHOLOGICAL FRACTURES & .9749 4.9 6.2
MUSCULOSKELETAL & CONN
TISS MALIGNANCY.
240............ 08 MED CONNECTIVE TISSUE 1.2671 4.9 6.6
DISORDERS W CC.
241............ 08 MED CONNECTIVE TISSUE .6166 3.1 3.9
DISORDERS W/O CC.
242............ 08 MED SEPTIC ARTHRITIS.......... 1.0690 5.1 6.6
243............ 08 MED MEDICAL BACK PROBLEMS..... .7261 3.7 4.7
244............ 08 MED BONE DISEASES & SPECIFIC .7170 3.7 4.8
ARTHROPATHIES W CC.
245............ 08 MED BONE DISEASES & SPECIFIC .4842 2.8 3.6
ARTHROPATHIES W/O CC.
246............ 08 MED NON-SPECIFIC ARTHROPATHIES .5572 3.0 3.6
247............ 08 MED SIGNS & SYMPTOMS OF .5698 2.6 3.4
MUSCULOSKELETAL SYSTEM &
CONN TISSUE.
248............ 08 MED TENDONITIS, MYOSITIS & .7854 3.7 4.7
BURSITIS.
249............ 08 MED AFTERCARE, MUSCULOSKELETAL .6919 2.6 3.8
SYSTEM & CONNECTIVE
TISSUE.
250............ 08 MED FX, SPRN, STRN & DISL OF .6912 3.3 4.3
FOREARM, HAND, FOOT AGE
>17 W CC.
251............ 08 MED FX, SPRN, STRN & DISL OF .4993 2.4 3.0
FOREARM, HAND, FOOT AGE
>17 W/O CC.
252............ 08 MED * FX, SPRN, STRN & DISL OF .2531 1.8 1.8
FOREARM, HAND, FOOT AGE 0-
17.
253............ 08 MED FX, SPRN, STRN & DISL OF .7239 3.7 4.7
UPARM, LOWLEG EX FOOT AGE
>17 W CC.
254............ 08 MED FX, SPRN, STRN & DISL OF .4403 2.6 3.2
UPARM, LOWLEG EX FOOT AGE
>17 W/O CC.
255............ 08 MED * FX, SPRN, STRN & DISL OF .2947 2.9 2.9
UPARM, LOWLEG EX FOOT AGE
0-17.
256............ 08 MED OTHER MUSCULOSKELETAL .7950 3.8 5.1
SYSTEM & CONNECTIVE
TISSUE DIAGNOSES.
257............ 09 SURG TOTAL MASTECTOMY FOR .9100 2.3 2.8
MALIGNANCY W CC.
258............ 09 SURG TOTAL MASTECTOMY FOR .7223 1.8 2.0
MALIGNANCY W/O CC.
259............ 09 SURG SUBTOTAL MASTECTOMY FOR .9083 1.8 2.8
MALIGNANCY W CC.
260............ 09 SURG SUBTOTAL MASTECTOMY FOR .6521 1.3 1.4
MALIGNANCY W/O CC.
261............ 09 SURG BREAST PROC FOR NON- .9307 1.7 2.2
MALIGNANCY EXCEPT BIOPSY
& LOCAL EXCISION.
262............ 09 SURG BREAST BIOPSY & LOCAL .8768 2.7 3.8
EXCISION FOR NON-
MALIGNANCY.
263............ 09 SURG SKIN GRAFT & /OR DEBRID 2.1112 8.9 12.1
FOR SKN ULCER OR
CELLULITIS W CC.
264............ 09 SURG SKIN GRAFT & /OR DEBRID 1.1515 5.4 7.2
FOR SKN ULCER OR
CELLULITIS W/O CC.
265............ 09 SURG SKIN GRAFT & /OR DEBRID 1.5284 4.2 6.6
EXCEPT FOR SKIN ULCER OR
CELLULITIS W CC.
266............ 09 SURG SKIN GRAFT & /OR DEBRID .8726 2.4 3.3
EXCEPT FOR SKIN ULCER OR
CELLULITIS W/O CC.
267............ 09 SURG PERIANAL & PILONIDAL 1.0827 3.1 5.2
PROCEDURES.
268............ 09 SURG SKIN, SUBCUTANEOUS TISSUE 1.1382 2.4 3.7
& BREAST PLASTIC
PROCEDURES.
269............ 09 SURG OTHER SKIN, SUBCUT TISS & 1.7023 5.8 8.3
BREAST PROC W CC.
270............ 09 SURG OTHER SKIN, SUBCUT TISS & .7657 2.3 3.3
BREAST PROC W/O CC.
[[Page 26378]]
271............ 09 MED SKIN ULCERS............... 1.0093 5.5 7.1
272............ 09 MED MAJOR SKIN DISORDERS W CC. 1.0005 4.8 6.4
273............ 09 MED MAJOR SKIN DISORDERS W/O .6162 3.2 4.2
CC.
274............ 09 MED MALIGNANT BREAST DISORDERS 1.2100 4.9 7.0
W CC.
275............ 09 MED MALIGNANT BREAST DISORDERS .5316 2.4 3.3
W/O CC.
276............ 09 MED NON-MALIGANT BREAST .6919 3.6 4.7
DISORDERS.
277............ 09 MED CELLULITIS AGE >17 W CC... .8398 4.7 5.7
278............ 09 MED CELLULITIS AGE >17 W/O CC. .5526 3.6 4.3
279............ 09 MED * CELLULITIS AGE 0-17..... .6626 4.2 4.2
280............ 09 MED TRAUMA TO THE SKIN, SUBCUT .6769 3.2 4.2
TISS & BREAST AGE >17 W
CC.
281............ 09 MED TRAUMA TO THE SKIN, SUBCUT .4720 2.4 3.1
TISS & BREAST AGE >17 W/O
CC.
282............ 09 MED * TRAUMA TO THE SKIN, .2563 2.2 2.2
SUBCUT TISS & BREAST AGE
0-17.
283............ 09 MED MINOR SKIN DISORDERS W CC. .6924 3.5 4.6
284............ 09 MED MINOR SKIN DISORDERS W/O .4348 2.5 3.2
CC.
285............ 10 SURG AMPUTAT OF LOWER LIMB FOR 1.9923 7.7 10.4
ENDOCRINE, NUTRIT, &
METABOL DISORDERS.
286............ 10 SURG ADRENAL & PITUITARY 2.1300 4.9 6.2
PROCEDURES.
287............ 10 SURG SKIN GRAFTS & WOUND DEBRID 1.8336 7.8 10.5
FOR ENDOC, NUTRIT & METAB
DISORDERS.
288............ 10 SURG O.R. PROCEDURES FOR 2.1764 4.6 5.7
OBESITY.
289............ 10 SURG PARATHYROID PROCEDURES.... .9892 2.0 3.1
290............ 10 SURG THYROID PROCEDURES........ .9207 1.8 2.4
291............ 10 SURG THYROGLOSSAL PROCEDURES... .5503 1.4 1.6
292............ 10 SURG OTHER ENDOCRINE, NUTRIT & 2.4548 6.9 10.0
METAB O.R. PROC W CC.
293............ 10 SURG OTHER ENDOCRINE, NUTRIT & 1.2190 3.5 4.9
METAB O.R. PROC W/O CC.
294............ 10 MED DIABETES AGE >35.......... .7596 3.6 4.7
295............ 10 MED DIABETES AGE 0-35......... .7555 2.9 3.9
296............ 10 MED NUTRITIONAL & MISC .8594 4.0 5.2
METABOLIC DISORDERS AGE
>17 W CC.
297............ 10 MED NUTRITIONAL & MISC .5170 2.8 3.5
METABOLIC DISORDERS AGE
>17 W/O CC.
298............ 10 MED NUTRITIONAL & MISC .5309 2.5 3.2
METABOLIC DISORDERS AGE 0-
17.
299............ 10 MED INBORN ERRORS OF .9442 4.0 5.6
METABOLISM.
300............ 10 MED ENDOCRINE DISORDERS W CC.. 1.0836 4.7 6.1
301............ 10 MED ENDOCRINE DISORDERS W/O CC .6108 2.9 3.7
302............ 11 SURG KIDNEY TRANSPLANT......... 3.4495 7.9 9.4
303............ 11 SURG KIDNEY, URETER & MAJOR 2.4639 7.0 8.5
BLADDER PROCEDURES FOR
NEOPLASM.
304............ 11 SURG KIDNEY, URETER & MAJOR 2.3371 6.4 8.9
BLADDER PROC FOR NON-
NEOPL W CC.
305............ 11 SURG KIDNEY, URETER & MAJOR 1.1844 3.1 3.8
BLADDER PROC FOR NON-
NEOPL W/O CC.
306............ 11 SURG PROSTATECTOMY W CC........ 1.2483 3.7 5.5
307............ 11 SURG PROSTATECTOMY W/O CC...... .6424 1.9 2.3
308............ 11 SURG MINOR BLADDER PROCEDURES W 1.6345 4.2 6.4
CC.
309............ 11 SURG MINOR BLADDER PROCEDURES W/ .9332 2.0 2.5
O CC.
310............ 11 SURG TRANSURETHRAL PROCEDURES W 1.1174 3.0 4.4
CC.
311............ 11 SURG TRANSURETHRAL PROCEDURES W/ .6165 1.6 1.9
O CC.
312............ 11 SURG URETHRAL PROCEDURES, AGE 1.0197 3.0 4.5
>17 W CC.
313............ 11 SURG URETHRAL PROCEDURES, AGE .6464 1.7 2.1
>17 W/O CC.
314............ 11 SURG * URETHRAL PROCEDURES, AGE .4939 2.3 2.3
0-17.
315............ 11 SURG OTHER KIDNEY & URINARY 2.0511 4.2 7.5
TRACT O.R. PROCEDURES.
316............ 11 MED RENAL FAILURE............. 1.3444 4.9 6.7
317............ 11 MED ADMIT FOR RENAL DIALYSIS.. .7439 2.1 3.2
318............ 11 MED KIDNEY & URINARY TRACT 1.1316 4.3 6.0
NEOPLASMS W CC.
319............ 11 MED KIDNEY & URINARY TRACT .6045 2.1 2.9
NEOPLASMS W/O CC.
320............ 11 MED KIDNEY & URINARY TRACT .8625 4.3 5.4
INFECTIONS AGE >17 W CC.
321............ 11 MED KIDNEY & URINARY TRACT .5686 3.2 3.8
INFECTIONS AGE >17 W/O CC.
322............ 11 MED KIDNEY & URINARY TRACT .4946 3.3 4.1
INFECTIONS AGE 0-17.
323............ 11 MED URINARY STONES W CC, & /OR .7992 2.4 3.2
ESW LITHOTRIPSY.
324............ 11 MED URINARY STONES W/O CC..... .4502 1.6 1.9
325............ 11 MED KIDNEY & URINARY TRACT .6468 3.0 3.9
SIGNS & SYMPTOMS AGE >17
W CC.
326............ 11 MED KIDNEY & URINARY TRACT .4302 2.1 2.7
SIGNS & SYMPTOMS AGE >17
W/O CC.
327............ 11 MED * KIDNEY & URINARY TRACT .3533 3.1 3.1
SIGNS & SYMPTOMS AGE 0-17.
328............ 11 MED URETHRAL STRICTURE AGE >17 .7487 2.8 3.9
W CC.
329............ 11 MED URETHRAL STRICTURE AGE >17 .5283 1.7 2.0
W/O CC.
330............ 11 MED * URETHRAL STRICTURE AGE 0- .3182 1.6 1.6
17.
331............ 11 MED OTHER KIDNEY & URINARY 1.0226 4.1 5.6
TRACT DIAGNOSES AGE >17 W
CC.
[[Page 26379]]
332............ 11 MED OTHER KIDNEY & URINARY .5994 2.5 3.3
TRACT DIAGNOSES AGE >17 W/
O CC.
333............ 11 MED OTHER KIDNEY & URINARY .8248 3.5 5.1
TRACT DIAGNOSES AGE 0-17.
334............ 12 SURG MAJOR MALE PELVIC 1.5582 4.2 4.9
PROCEDURES W CC.
335............ 12 SURG MAJOR MALE PELVIC 1.1706 3.2 3.4
PROCEDURES W/O CC.
336............ 12 SURG TRANSURETHRAL .8873 2.7 3.5
PROSTATECTOMY W CC.
337............ 12 SURG TRANSURETHRAL .6147 1.9 2.2
PROSTATECTOMY W/O CC.
338............ 12 SURG TESTES PROCEDURES, FOR 1.1903 3.5 5.3
MALIGNANCY.
339............ 12 SURG TESTES PROCEDURES, NON- 1.0710 3.0 4.5
MALIGNANCY AGE >17.
340............ 12 SURG * TESTES PROCEDURES, NON- .2828 2.4 2.4
MALIGNANCY AGE 0-17.
341............ 12 SURG PENIS PROCEDURES.......... 1.1668 2.1 3.2
342............ 12 SURG CIRCUMCISION AGE >17...... .8214 2.5 3.1
343............ 12 SURG * CIRCUMCISION AGE 0-17... .1537 1.7 1.7
344............ 12 SURG OTHER MALE REPRODUCTIVE 1.1489 1.6 2.3
SYSTEM O.R. PROCEDURES
FOR MALIGNANCY.
345............ 12 SURG OTHER MALE REPRODUCTIVE .8813 2.6 3.8
SYSTEM O.R. PROC EXCEPT
FOR MALIGNANCY.
346............ 12 MED MALIGNANCY, MALE .9783 4.3 5.8
REPRODUCTIVE SYSTEM, W CC.
347............ 12 MED MALIGNANCY, MALE .5905 2.4 3.4
REPRODUCTIVE SYSTEM, W/O
CC.
348............ 12 MED BENIGN PROSTATIC .7170 3.2 4.2
HYPERTROPHY W CC.
349............ 12 MED BENIGN PROSTATIC .4420 2.0 2.6
HYPERTROPHY W/O CC.
350............ 12 MED INFLAMMATION OF THE MALE .6987 3.6 4.4
REPRODUCTIVE SYSTEM.
351............ 12 MED * STERILIZATION, MALE..... .2358 1.3 1.3
352............ 12 MED OTHER MALE REPRODUCTIVE .6875 2.8 3.9
SYSTEM DIAGNOSES.
353............ 13 SURG PELVIC EVISCERATION, 1.9232 5.3 6.7
RADICAL HYSTERECTOMY &
RADICAL VULVECTOMY.
354............ 13 SURG UTERINE, ADNEXA PROC FOR 1.5267 4.9 5.9
NON-OVARIAN/ADNEXAL MALIG
W CC.
355............ 13 SURG UTERINE, ADNEXA PROC FOR .9265 3.1 3.3
NON-OVARIAN/ADNEXAL MALIG
W/O CC.
356............ 13 SURG FEMALE REPRODUCTIVE SYSTEM .7838 2.1 2.4
RECONSTRUCTIVE PROCEDURES.
357............ 13 SURG UTERINE & ADNEXA PROC FOR 2.3601 6.9 8.5
OVARIAN OR ADNEXAL
MALIGNANCY.
358............ 13 SURG UTERINE & ADNEXA PROC FOR 1.2247 3.7 4.4
NON-MALIGNANCY W CC.
359............ 13 SURG UTERINE & ADNEXA PROC FOR .8582 2.6 2.8
NON-MALIGNANCY W/O CC.
360............ 13 SURG VAGINA, CERVIX & VULVA .8859 2.4 3.0
PROCEDURES.
361............ 13 SURG LAPAROSCOPY & INCISIONAL 1.2248 2.2 3.5
TUBAL INTERRUPTION.
362............ 13 SURG * ENDOSCOPIC TUBAL .3013 1.4 1.4
INTERRUPTION.
363............ 13 SURG D & C, CONIZATION & RADIO- .8178 2.6 3.5
IMPLANT, FOR MALIGNANCY.
364............ 13 SURG D & C, CONIZATION EXCEPT .7559 2.6 3.6
FOR MALIGNANCY.
365............ 13 SURG OTHER FEMALE REPRODUCTIVE 1.8502 5.0 7.3
SYSTEM O.R. PROCEDURES.
366............ 13 MED MALIGNANCY, FEMALE 1.2498 4.8 6.8
REPRODUCTIVE SYSTEM W CC.
367............ 13 MED MALIGNANCY, FEMALE .5675 2.4 3.2
REPRODUCTIVE SYSTEM W/O
CC.
368............ 13 MED INFECTIONS, FEMALE 1.1249 5.0 6.7
REPRODUCTIVE SYSTEM.
369............ 13 MED MENSTRUAL & OTHER FEMALE .5721 2.4 3.2
REPRODUCTIVE SYSTEM
DISORDERS.
370............ 14 SURG CESAREAN SECTION W CC..... 1.0631 4.4 5.7
371............ 14 SURG CESAREAN SECTION W/O CC... .7157 3.3 3.7
372............ 14 MED VAGINAL DELIVERY W .6069 2.7 3.5
COMPLICATING DIAGNOSES.
373............ 14 MED VAGINAL DELIVERY W/O .4172 2.0 2.3
COMPLICATING DIAGNOSES.
374............ 14 SURG VAGINAL DELIVERY W .7698 2.7 3.5
STERILIZATION & /OR D & C.
375............ 14 SURG * VAGINAL DELIVERY W O.R. .6841 4.4 4.4
PROC EXCEPT STERIL & /OR
D & C.
376............ 14 MED POSTPARTUM & POST ABORTION .5314 2.6 3.5
DIAGNOSES W/O O.R.
PROCEDURE.
377............ 14 SURG POSTPARTUM & POST ABORTION .8870 2.6 3.9
DIAGNOSES W O.R.
PROCEDURE.
378............ 14 MED ECTOPIC PREGNANCY......... .7543 2.1 2.3
379............ 14 MED THREATENED ABORTION....... .3981 2.0 3.1
380............ 14 MED ABORTION W/O D & C........ .4867 1.8 2.2
381............ 14 SURG ABORTION W D & C, .5323 1.5 2.0
ASPIRATION CURETTAGE OR
HYSTEROTOMY.
382............ 14 MED FALSE LABOR............... .1845 1.2 1.3
383............ 14 MED OTHER ANTEPARTUM DIAGNOSES .5082 2.7 3.9
W MEDICAL COMPLICATIONS.
384............ 14 MED OTHER ANTEPARTUM DIAGNOSES .3232 1.7 2.3
W/O MEDICAL COMPLICATIONS.
385............ 15 MED * NEONATES, DIED OR 1.3729 1.8 1.8
TRANSFERRED TO ANOTHER
ACUTE CARE FACILITY.
[[Page 26380]]
386............ 15 MED * EXTREME IMMATURITY OR 4.5275 17.9 17.9
RESPIRATORY DISTRESS
SYNDROME, NEONATE.
387............ 15 MED * PREMATURITY W MAJOR 3.0922 13.3 13.3
PROBLEMS.
388............ 15 MED * PREMATURITY W/O MAJOR 1.8657 8.6 8.6
PROBLEMS.
389............ 15 MED * FULL TERM NEONATE W 1.8357 4.7 4.7
MAJOR PROBLEMS.
390............ 15 MED NEONATE W OTHER .8865 2.9 3.7
SIGNIFICANT PROBLEMS.
391............ 15 MED * NORMAL NEWBORN.......... .1523 3.1 3.1
392............ 16 SURG SPLENECTOMY AGE >17....... 3.1818 7.1 9.5
393............ 16 SURG * SPLENECTOMY AGE 0-17.... 1.3449 9.1 9.1
394............ 16 SURG OTHER O.R. PROCEDURES OF 1.5946 4.1 6.7
THE BLOOD AND BLOOD
FORMING ORGANS.
395............ 16 MED RED BLOOD CELL DISORDERS .8262 3.3 4.5
AGE >17.
396............ 16 MED RED BLOOD CELL DISORDERS 1.2128 2.4 3.7
AGE 0-17.
397............ 16 MED COAGULATION DISORDERS..... 1.2290 3.8 5.2
398............ 16 MED RETICULOENDOTHELIAL & 1.2765 4.7 6.0
IMMUNITY DISORDERS W CC.
399............ 16 MED RETICULOENDOTHELIAL & .6899 2.8 3.6
IMMUNITY DISORDERS W/O CC.
400............ 17 SURG LYMPHOMA & LEUKEMIA W 2.6272 5.8 9.1
MAJOR O.R. PROCEDURE.
401............ 17 SURG LYMPHOMA & NON-ACUTE 2.7311 7.8 11.2
LEUKEMIA W OTHER O.R.
PROC W CC.
402............ 17 SURG LYMPHOMA & NON-ACUTE 1.1002 2.8 3.9
LEUKEMIA W OTHER O.R.
PROC W/O CC.
403............ 17 MED LYMPHOMA & NON-ACUTE 1.7607 5.7 8.1
LEUKEMIA W CC.
404............ 17 MED LYMPHOMA & NON-ACUTE .8495 3.1 4.2
LEUKEMIA W/O CC.
405............ 17 MED * ACUTE LEUKEMIA W/O MAJOR 1.9067 4.9 4.9
O.R. PROCEDURE AGE 0-17.
406............ 17 SURG MYELOPROLIF DISORD OR 2.8109 7.5 10.3
POORLY DIFF NEOPL W MAJ
O.R.PROC W CC.
407............ 17 SURG MYELOPROLIF DISORD OR 1.3138 3.6 4.4
POORLY DIFF NEOPL W MAJ
O.R.PROC W/O CC.
408............ 17 SURG MYELOPROLIF DISORD OR 1.9991 4.7 7.7
POORLY DIFF NEOPL W OTHER
O.R.PROC.
409............ 17 MED RADIOTHERAPY.............. 1.1226 4.4 5.9
410............ 17 MED CHEMOTHERAPY W/O ACUTE .9493 2.9 3.7
LEUKEMIA AS SECONDARY
DIAGNOSIS.
411............ 17 MED HISTORY OF MALIGNANCY W/O .3288 2.0 2.3
ENDOSCOPY.
412............ 17 MED HISTORY OF MALIGNANCY W .4877 2.0 2.7
ENDOSCOPY.
413............ 17 MED OTHER MYELOPROLIF DIS OR 1.3665 5.3 7.3
POORLY DIFF NEOPL DIAG W
CC.
414............ 17 MED OTHER MYELOPROLIF DIS OR .7522 3.0 4.1
POORLY DIFF NEOPL DIAG W/
O CC.
415............ 18 SURG O.R. PROCEDURE FOR 3.5919 10.3 14.2
INFECTIOUS & PARASITIC
DISEASES.
416............ 18 MED SEPTICEMIA AGE >17........ 1.5287 5.5 7.4
417............ 18 MED SEPTICEMIA AGE 0-17....... 1.2437 3.9 6.3
418............ 18 MED POSTOPERATIVE & POST- 1.0076 4.8 6.2
TRAUMATIC INFECTIONS.
419............ 18 MED FEVER OF UNKNOWN ORIGIN .8724 3.7 4.8
AGE >17 W CC.
420............ 18 MED FEVER OF UNKNOWN ORIGIN .6053 2.9 3.6
AGE >17 W/O CC.
421............ 18 MED VIRAL ILLNESS AGE >17..... .6760 3.1 3.9
422............ 18 MED VIRAL ILLNESS & FEVER OF .7893 2.8 5.1
UNKNOWN ORIGIN AGE 0-17.
423............ 18 MED OTHER INFECTIOUS & 1.7317 5.9 8.2
PARASITIC DISEASES
DIAGNOSES.
424............ 19 SURG O.R. PROCEDURE W PRINCIPAL 2.2742 8.7 13.5
DIAGNOSES OF MENTAL
ILLNESS.
425............ 19 MED ACUTE ADJUSTMENT REACTION .7022 3.0 4.1
& PSYCHOLOGICAL
DYSFUNCTION.
426............ 19 MED DEPRESSIVE NEUROSES....... .5303 3.3 4.6
427............ 19 MED NEUROSES EXCEPT DEPRESSIVE .5673 3.3 5.0
428............ 19 MED DISORDERS OF PERSONALITY & .7360 4.4 7.1
IMPULSE CONTROL.
429............ 19 MED ORGANIC DISTURBANCES & .8567 4.9 6.6
MENTAL RETARDATION.
430............ 19 MED PSYCHOSES................. .7659 5.9 8.3
431............ 19 MED CHILDHOOD MENTAL DISORDERS .6434 4.7 6.6
432............ 19 MED OTHER MENTAL DISORDER .6488 3.2 4.8
DIAGNOSES.
433............ 20 MED ALCOHOL/DRUG ABUSE OR .2829 2.2 3.0
DEPENDENCE, LEFT AMA.
434............ 20 MED ALC/DRUG ABUSE OR DEPEND, .7239 3.9 5.1
DETOX OR OTH SYMPT TREAT
W CC.
435............ 20 MED ALC/DRUG ABUSE OR DEPEND, .4167 3.5 4.3
DETOX OR OTH SYMPT TREAT
W/O CC.
436............ 20 MED ALC/DRUG DEPENDENCE W .7433 10.3 12.9
REHABILITATION THERAPY.
437............ 20 MED ALC/DRUG DEPENDENCE, .6576 7.6 9.0
COMBINED REHAB & DETOX
THERAPY.
438............ ....... ................... NO LONGER VALID........... .0000 .0 .0
439............ 21 SURG SKIN GRAFTS FOR INJURIES.. 1.7255 5.3 8.2
440............ 21 SURG WOUND DEBRIDEMENTS FOR 1.9063 5.8 8.9
INJURIES.
[[Page 26381]]
441............ 21 SURG HAND PROCEDURES FOR .9443 2.2 3.2
INJURIES.
442............ 21 SURG OTHER O.R. PROCEDURES FOR 2.3391 5.4 8.2
INJURIES W CC.
443............ 21 SURG OTHER O.R. PROCEDURES FOR .9979 2.5 3.4
INJURIES W/O CC.
444............ 21 MED TRAUMATIC INJURY AGE >17 W .7225 3.2 4.2
CC.
445............ 21 MED TRAUMATIC INJURY AGE >17 W/ .5054 2.4 3.0
O CC.
446............ 21 MED * TRAUMATIC INJURY AGE 0- .2955 2.4 2.4
17.
447............ 21 MED ALLERGIC REACTIONS AGE >17 .5160 1.9 2.5
448............ 21 MED * ALLERGIC REACTIONS AGE 0- .0972 2.9 2.9
17.
449............ 21 MED POISONING & TOXIC EFFECTS .8073 2.6 3.7
OF DRUGS AGE >17 W CC.
450............ 21 MED POISONING & TOXIC EFFECTS .4409 1.6 2.1
OF DRUGS AGE >17 W/O CC.
451............ 21 MED * POISONING & TOXIC .2625 2.1 2.1
EFFECTS OF DRUGS AGE 0-17.
452............ 21 MED COMPLICATIONS OF TREATMENT 1.0135 3.5 5.0
W CC.
453............ 21 MED COMPLICATIONS OF TREATMENT .4998 2.2 2.8
W/O CC.
454............ 21 MED OTHER INJURY, POISONING & .8586 3.2 4.6
TOXIC EFFECT DIAG W CC.
455............ 21 MED OTHER INJURY, POISONING & .4661 2.0 2.6
TOXIC EFFECT DIAG W/O CC.
456............ ................... NO LONGER VALID........... .0000 .0 .0
457............ ................... NO LONGER VALID........... .0000 .0 .0
458............ ................... NO LONGER VALID........... .0000 .0 .0
459............ ................... NO LONGER VALID........... .0000 .0 .0
460............ ................... NO LONGER VALID........... .0000 .0 .0
461............ 23 SURG O.R. PROC W DIAGNOSES OF 1.2045 2.4 4.6
OTHER CONTACT W HEALTH
SERVICES.
462............ 23 MED REHABILITATION............ 1.2426 9.3 11.7
463............ 23 MED SIGNS & SYMPTOMS W CC..... .6922 3.3 4.3
464............ 23 MED SIGNS & SYMPTOMS W/O CC... .4771 2.4 3.1
465............ 23 MED AFTERCARE W HISTORY OF .5777 2.1 3.4
MALIGNANCY AS SECONDARY
DIAGNOSIS.
466............ 23 MED AFTERCARE W/O HISTORY OF .6777 2.2 3.9
MALIGNANCY AS SECONDARY
DIAGNOSIS.
467............ 23 MED OTHER FACTORS INFLUENCING .5112 2.3 4.1
HEALTH STATUS.
468............ ................... EXTENSIVE O.R. PROCEDURE 3.6423 9.2 13.0
UNRELATED TO PRINCIPAL
DIAGNOSIS.
469............ ................... ** PRINCIPAL DIAGNOSIS .0000 .0 .0
INVALID AS DISCHARGE
DIAGNOSIS.
470............ ................... ** UNGROUPABLE............ .0000 .0 .0
471............ 08 SURG BILATERAL OR MULTIPLE 3.1978 5.0 5.7
MAJOR JOINT PROCS OF
LOWER EXTREMITY.
472............ ................... NO LONGER VALID........... .0000 .0 .0
473............ 17 SURG ACUTE LEUKEMIA W/O MAJOR 3.5861 7.6 13.1
O.R. PROCEDURE AGE >17.
474............ ................... NO LONGER VALID........... .0000 .0 .0
475............ 04 MED RESPIRATORY SYSTEM 3.6949 8.1 11.3
DIAGNOSIS WITH VENTILATOR
SUPPORT.
476............ SURG PROSTATIC O.R. PROCEDURE 2.2633 8.4 11.6
UNRELATED TO PRINCIPAL
DIAGNOSIS.
477............ SURG NON-EXTENSIVE O.R. 1.8270 5.4 8.2
PROCEDURE UNRELATED TO
PRINCIPAL DIAGNOSIS.
478............ 05 SURG OTHER VASCULAR PROCEDURES 2.3372 5.0 7.3
W CC.
479............ 05 SURG OTHER VASCULAR PROCEDURES 1.4333 2.8 3.6
W/O CC.
480............ PRE SURG LIVER TRANSPLANT.......... 9.5064 14.6 19.2
481............ PRE SURG BONE MARROW TRANSPLANT.... 8.7719 24.1 27.1
482............ PRE SURG TRACHEOSTOMY FOR FACE, 3.5738 9.9 12.8
MOUTH & NECK DIAGNOSES.
483............ PRE SURG TRACHEOSTOMY EXCEPT FOR 15.8415 33.4 40.7
FACE, MOUTH & NECK
DIAGNOSES.
484............ 24 SURG CRANIOTOMY FOR MULTIPLE 5.6100 9.0 13.3
SIGNIFICANT TRAUMA.
485............ 24 SURG LIMB REATTACHMENT, HIP AND 3.0519 7.6 9.4
FEMUR PROC FOR MULTIPLE
SIGNIFICANT TRA.
486............ 24 SURG OTHER O.R. PROCEDURES FOR 4.9156 8.1 12.2
MULTIPLE SIGNIFICANT
TRAUMA.
487............ 24 MED OTHER MULTIPLE SIGNIFICANT 2.0199 5.5 7.7
TRAUMA.
488............ 25 SURG HIV W EXTENSIVE O.R. 4.5503 11.6 17.0
PROCEDURE.
489............ 25 MED HIV W MAJOR RELATED 1.7496 6.0 8.6
CONDITION.
490............ 25 MED HIV W OR W/O OTHER RELATED .9715 3.7 5.1
CONDITION.
491............ 08 SURG MAJOR JOINT & LIMB 1.6661 2.9 3.5
REATTACHMENT PROCEDURES
OF UPPER EXTREMITY.
492............ 17 MED CHEMOTHERAPY W ACUTE 4.2524 10.9 16.1
LEUKEMIA AS SECONDARY
DIAGNOSIS.
493............ 07 SURG LAPAROSCOPIC 1.8180 4.3 5.7
CHOLECYSTECTOMY W/O
C.D.E. W CC.
494............ 07 SURG LAPAROSCOPIC 1.0374 2.0 2.5
CHOLECYSTECTOMY W/O
C.D.E. W/O CC.
495............ PRE SURG LUNG TRANSPLANT........... 8.5947 13.1 20.3
496............ 08 SURG COMBINED ANTERIOR/ 5.5796 7.8 10.0
POSTERIOR SPINAL FUSION.
497............ 08 SURG SPINAL FUSION W CC........ 2.9469 4.9 6.2
[[Page 26382]]
498............ 08 SURG SPINAL FUSION W/O CC...... 1.9077 2.8 3.4
499............ 08 SURG BACK & NECK PROCEDURES 1.4590 3.6 4.8
EXCEPT SPINAL FUSION W CC.
500............ 08 SURG BACK & NECK PROCEDURES .9811 2.2 2.7
EXCEPT SPINAL FUSION W/O
CC.
501............ 08 SURG KNEE PROCEDURES W PDX OF 2.6350 8.4 10.6
INFECTION W CC.
502............ 08 SURG KNEE PROCEDURES W PDX OF 1.4327 4.9 6.0
INFECTION W/O CC.
503............ 08 SURG KNEE PROCEDURES W/O PDX OF 1.2151 3.1 4.0
INFECTION.
504............ 22 SURG EXTENSIVE 3RD DEGREE BURNS 12.4664 23.9 30.1
W SKIN GRAFT.
505............ 22 MED EXTENSIVE 3RD DEGREE BURNS 2.0389 2.5 4.7
W/O SKIN GRAFT.
506............ 22 SURG FULL THICKNESS BURN W SKIN 4.4971 13.0 17.6
GRAFT OR INHAL INJ W CC
OR SIG TRAUMA.
507............ 22 SURG FULL THICKNESS BURN W SKIN 1.8438 6.6 9.2
GRFT OR INHAL INJ W/O CC
OR SIG TRAUMA.
508............ 22 MED FULL THICKNESS BURN W/O 1.3119 5.1 7.2
SKIN GRFT OR INHAL INJ W
CC OR SIG TRAUMA.
509............ 22 MED FULL THICKNESS BURN W/O .8154 4.1 6.2
SKIN GRFT OR INH INJ W/O
CC OR SIG TRAUMA.
510............ 22 MED NON-EXTENSIVE BURNS W CC 1.4130 5.2 7.9
OR SIGNIFICANT TRAUMA.
511............ 22 MED NON-EXTENSIVE BURNS W/O CC .6568 3.1 4.5
OR SIGNIFICANT TRAUMA.
----------------------------------------------------------------------------------------------------------------
* MEDICARE DATA HAVE BEEN SUPPLEMENTED BY DATA FROM 19 STATES FOR LOW VOLUME DRGS.
** DRGS 469 AND 470 CONTAIN CASES WHICH COULD NOT BE ASSIGNED TO VALID DRGS.
NOTE: GEOMETRIC MEAN IS USED ONLY TO DETERMINE PAYMENT FOR TRANSFER CASES.
NOTE: ARITHMETIC MEAN IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY.
NOTE: RELATIVE WEIGHTS ARE BASED ON MEDICARE PATIENT DATA AND MAY NOT BE APPROPRIATE FOR OTHER PATIENTS.
Table 6A.--New Diagnosis Codes
----------------------------------------------------------------------------------------------------------------
Diagnosis
code Description CC MDC DRG
----------------------------------------------------------------------------------------------------------------
007.5 Cyclosporiasis.............. N 6 182, 183, 184
082.40 Unspecified ehrlichiosis.... N 18 423
082.41 Ehrlichiosis Chafiensis (E. N 18 423
Chafiensis).
082.49 Other ehrlichiosis.......... N 18 423
285.21 Anemia in end-stage renal N 16 395, 396
disease.
285.22 Anemia in neoplastic disease N 16 395, 396
285.29 Anemia of other chronic N 16 395, 396
illness.
294.10 Dementia in conditions N 19 429
classified elsewhere
without behavioral
disturbance.
294.11 Dementia in conditions N 19 429
classified elsewhere with
behavioral disturbance.
372.81 Conjunctivochalasis......... N 2 46, 47, 48
372.89 Other disorders of N 2 46, 47, 48
conjunctiva.
477.1 Allergic rhinitis, due to N 3 68, 69, 70
food.
493.02 Extrinsic asthma, with acute Y 4 96, 97, 98
exacerbation.
493.12 Intrinsic asthma, with acute Y 4 96, 97, 98
exacerbation.
493.22 Chronic obstructive asthma, Y 4 88
with acute exacerbation.
493.92 Unspecified asthma, with Y 4 96, 97, 98
acute exacerbation.
494.0 Bronchiectasis without acute N 4 88
exacerbation.
494.1 Bronchiectasis with acute Y 4 88
exacerbation.
558.3 Allergic gastroenteritis and N 6 182, 183, 184
colitis.
600.0 Hypertrophy (benign) of N 12 348, 349
prostate.
600.1 Nodular prostate............ N 12 348, 349
600.2 Benign localized hyperplasia N 12 348, 349
of prostate.
600.3 Cyst of prostate............ N 12 348, 349
600.9 Unspecified hyperplasia of N 12 348, 349
prostate.
645.10 Post term pregnancy, N 14 469
unspecified as to episode
of care or not applicable.
645.11 Post term pregnancy, N 14 370, 371, 372, 373, 374, 375
delivered, with or without
mention of antepartum
condition.
645.13 Post term pregnancy, N 14 383, 384
antepartum condition or
complication.
645.20 Prolonged pregnancy, N 14 469
unspecified as to episode
of care or not applicable.
645.21 Prolonged pregnancy, N 14 370, 371, 372, 373, 374, 375
delivered, with or without
mention of antepartum
condition.
645.23 Prolonged pregnancy, N 14 383, 384
antepartum condition or
complication.
692.75 Disseminated superficial N 9 283, 284
actinic porokeratosis
(DSAP).
707.10 Unspecified ulcer of lower Y 9 263, 264, 271
limb.
707.11 Ulcer of thigh.............. Y 9 263, 264, 271
707.12 Ulcer of calf............... Y 9 263, 264, 271
707.13 Ulcer of ankle.............. Y 9 263, 264, 271
707.14 Ulcer of heel and midfoot... Y 9 263, 264, 271
707.15 Ulcer of other part of foot. Y 9 263, 264, 271
707.19 Ulcer of other part of lower Y 9 263, 264, 271
limb.
[[Page 26383]]
727.83 Plica syndrome.............. N 8 248
781.91 Loss of height.............. N 1 34, 35
781.92 Abnormal posture............ N 1 34, 35
781.99 Other symptoms involving N 1 34, 35
nervous and musculoskeletal
systems.
783.21 Loss of weight.............. N 10 296, 297, 298
783.22 Underweight................. N 10 296, 297, 298
783.40 Unspecified lack of normal N 10 296, 297, 298
physiological development.
783.41 Failure to thrive........... N 10 296, 297, 298
783.42 Delayed milestones.......... N 10 296, 297, 298
783.43 Short stature............... N 10 296, 297, 298
783.7 Adult failure to thrive..... N 10 296, 297, 298
790.01 Precipitous drop in N 16 395, 396
hematocrit.
790.09 Other abnormality of red N 16 395, 396
blood cells.
792.5 Cloudy (hemodialysis) N 23 463, 464
(peritoneal) dialysis
effluent.
995.7 Other adverse food N 21 454, 455
reactions, not elsewhere
classified.
996.87 Complications of Y 21 452, 453
transplanted organ,
intestine.
V15.01 Allergy to peanuts.......... N 23 467
V15.02 Allergy to milk products.... N 23 467
V15.03 Allergy to eggs............. N 23 467
V15.04 Allergy to seafood.......... N 23 467
V15.05 Allergy to other foods...... N 23 467
V15.06 Allergy to insects.......... N 23 467
V15.07 Allergy to latex............ N 23 467
V15.08 Allergy to radiographic dye. N 23 467
V15.09 Other allergy, other than to N 23 467
medicinal agents.
V21.30 Unspecified low birth weight N 23 467
status.
V21.31 Low birth weight status, N 23 467
less than 500 grams.
V21.32 Low birth weight status, 500- N 23 467
999 grams.
V21.33 Low birth weight status, N 23 467
1000-1499 grams.
V21.34 Low birth weight status, N 23 467
1500-1999 grams.
V21.35 Low birth weight status, N 23 467
2000-2500 grams.
V26.21 Fertility testing........... N 23 467
V26.22 Aftercare following N 23 467
sterilization reversal.
V26.29 Other investigation and N 23 467
testing.
V42.84 Organ or tissue replaced by Y 23 467
transplant, intestines.
V45.74 Acquired absence of organ, N 23 467
other parts of urinary
tract.
V45.75 Acquired absence of organ, N 23 467
stomach.
V45.76 Acquired absence of organ, N 23 467
lung.
V45.77 Acquired absence of organ, N 23 467
genital organs.
V45.78 Acquired absence of organ, N 23 467
eye.
V45.79 Other acquired absence of N 23 467
organ.
V49.81 Postmenopausal status (age- N 23 467
related) (natural).
V49.89 Other specified conditions N 23 467
influencing health status.
V56.31 Encounter for adequacy N 11 317
testing for hemodialysis.
V56.32 Encounter for adequacy N 11 317
testing for peritoneal
dialysis.
V58.83 Encounter for therapeutic N 23 465, 466
drug monitoring.
V67.00 Follow-up examination, N 23 465, 466
following unspecified
surgery.
V67.01 Following surgery, follow-up N 23 465, 466
vaginal pap smear.
V67.09 Follow-up examination, N 23 465, 466
following other surgery.
V71.81 Observation for suspected N 23 467
abuse and neglect.
V71.89 Observation for other N 23 467
specified suspected
conditions.
V76.46 Special screening for N 23 467
malignant neoplasms, ovary.
V76.47 Special screening for N 23 467
malignant neoplasms, Vagina.
V76.50 Special screening for N 23 467
malignant neoplasms,
unspecified intestine.
V76.51 Special screening for N 23 467
malignant neoplasms, colon.
V76.52 Special screening for N 23 467
malignant neoplasms, small
intestine.
V76.81 Special screening for N 23 467
malignant neoplasms,
nervous system.
V76.89 Special screening for other N 23 467
malignant neoplasm.
V77.91 Screening for lipoid N 23 467
disorders.
V77.99 Other and unspecified N 23 467
endocrine, nutritional,
metabolic, and immunity
disorders.
V82.81 Special screening for N 23 467
osteoporosis.
V82.89 Special screening for other N 23 467
specified conditions.
----------------------------------------------------------------------------------------------------------------
[[Page 26384]]
Table 6B.--New Procedure Codes
----------------------------------------------------------------------------------------------------------------
Procedure
code Description OR MDC DRG
----------------------------------------------------------------------------------------------------------------
39.71 Endovascular implantation of Y 5 110, 111
graph in abdominal aorta. 11 315
21 442, 443
24 486
39.79 Other endovascular graft Y 1 1, 2, 3
repair of aneurysm. 5 110, 111
11 315
21 442, 443
24 486
41.07 Autologous hematopoietic Y PRE 481
stem cell transplant with
purging.
41.08 Allogeneic hematopoietic Y PRE 481
stem cell transplant with
purging.
41.09 Autologous bone marrow Y PRE 481
transplant with purging.
46.97 Transplant of intestine..... Y 6 148, 149
7 201
17 400, 406, 407
21 442, 443
24 486
60.96 Transurethral destruction of Y 11 306, 307
prostate tissue by 12 336, 337
microwave thermotherapy. UNR 476
60.97 Other transurethral Y 11 306, 307
destruction of prostate 12 336, 337
tissue by other UNR 476
thermotherapy.
99.75 Administration of N
neuroprotective agent.
----------------------------------------------------------------------------------------------------------------
Table 6C.--Invalid Diagnosis Codes
----------------------------------------------------------------------------------------------------------------
Diagnosis
code Description CC MDC DRG
----------------------------------------------------------------------------------------------------------------
294.1 Dementia in conditions N 19 429
classified elsewhere.
372.8 Other disorders of N 2 46, 47, 48
conjunctiva.
494 Bronchiectasis.............. Y 4 88
600 Hyperplasia of prostate..... N 12 348, 349
645.00 Prolonged pregnancy, N 14 469
unspecified as to episode
of care or not applicable.
645.01 Prolonged pregnancy, N 14 370, 371, 372, 373, 374, 375
delivered, with or without
mention of antepartum
condition.
645.03 Prolonged pregnancy, N 14 383, 384
antepartum condition or
complication.
707.1 Ulcer of lower limb, except Y 9 263, 264, 271
decubitus.
781.9 Other symptoms involving N 1 34, 35
nervous and musculoskeletal
systems.
783.2 Abnormal loss of weight..... N 10 296, 297, 298
783.4 Lack of expected normal N 10 296, 297, 298
physiological development.
790.0 Abnormality of red blood N 16 395, 396
cells.
V15.0 Allergy, other than to N 23 467
medicinal agents.
V26.2 Investigation and testing... N 23 467
V49.8 Other specified problems N 23 467
influencing health status.
V67.0 Follow-up examination N 23 465, 466
following surgery.
V71.8 Observation for other N 23 467
specified suspected
conditions.
V76.8 Special screening for N 23 467
malignant neoplasms, other
neoplasm.
V77.9 Other and unspecified N 23 467
endocrine, nutritional,
metabolic, and immunity
disorders.
V82.8 Special screening for other N 23 467
specified conditions.
----------------------------------------------------------------------------------------------------------------
[[Page 26385]]
Table 6D.--Revised Diagnosis Code Titles
----------------------------------------------------------------------------------------------------------------
Diagnosis
code Description CC MDC DRG
----------------------------------------------------------------------------------------------------------------
564.1 Irritable bowel syndrome.... N 6 182, 183, 184
V26.3 Genetic counseling and N 23 467
testing.
V76.49 Special screening for N 23 467
malignant, other sites.
----------------------------------------------------------------------------------------------------------------
Table 6E.--Revised Procedure Codes
----------------------------------------------------------------------------------------------------------------
Procedure
code Description OR MDC DRG
----------------------------------------------------------------------------------------------------------------
41.01 Autologous bone marrow Y PRE 481
transplant without purging.
41.04 Autologous hematopoietic Y PRE 481
stem cell transplant
without purging.
41.05 Allogeneic hematopoietic Y PRE 481
stem cell transplant
without purging.
86.59 Closure of skin and N
subcutaneous tissue other
sites.
----------------------------------------------------------------------------------------------------------------
[[Page 26386]]
Table 6F.--Additions to the CC Exclusions List
CCs that are added to the list are in Table 6F--Additions to the CC
Exclusions List. Each of the principal diagnoses is shown with an
asterisk, and the revisions to the CC Exclusions List are provided in an
indented column immediately following the affected principal diagnosis.
------------------------------------------------------------------------
------------------------------------------------------------------------
*0075 2818 70713 49312 01170 4870 01152 4829
00841 2824 70714 49322 01171 4950 01153 4830
00842 28260 70715 49392 01172 4951 01154 4831
00843 28261 70719 *49391 01173 4952 01155 4838
00844 28262 *4871 49302 01174 4953 01156 4841
00845 28263 4941 49312 01175 4954 01160 4843
00846 28269 *49300 49322 01176 4955 01161 4845
00847 2830 49302 49392 01180 4956 01162 4846
00849 28310 49312 *49392 01181 4957 01163 4847
*01790 28311 49322 49301 01182 4958 01164 4848
4941 28319 49392 49302 01183 4959 01165 485
*01791 2832 *49301 49311 01184 496 01166 486
4941 2839 49302 49312 01185 5060 01170 4870
*01792 2840 49312 49320 01186 5061 01171 4941
4941 2848 49322 49321 01190 5070 01172 4950
*01793 2849 49392 49322 01191 5071 01173 4951
4941 2850 *49302 49391 01192 5078 01174 4952
*01794 2851 49301 49392 01193 5080 01175 4953
4941 *29410 49302 *4940 01194 5081 01176 4954
*01795 2910 49311 01100 01195 515 01180 4955
4941 2911 49312 01101 01196 5160 01181 4956
*01796 2912 49320 01102 01200 5161 01182 4957
4941 2913 49321 01103 01201 5162 01183 4958
*28521 2914 49322 01104 01202 5163 01184 4959
2800 29181 49391 01105 01203 5168 01185 496
2814 29189 49392 01106 01204 5169 01186 5060
2818 2919 *49310 01110 01205 5171 01190 5061
2824 2920 49302 01111 01206 5172 01191 5070
28260 29211 49312 01112 01210 5178 01192 5071
28261 29212 49322 01113 01211 74861 01193 5078
28262 2922 49392 01114 01212 *4941 01194 5080
28263 29281 *49311 01115 01213 01100 01195 5081
28269 29282 49302 01116 01214 01101 01196 515
2830 29283 49312 01120 01215 01102 01200 5160
28310 29284 49322 01121 01216 01103 01201 5161
28311 29289 49392 01122 0310 01104 01202 5162
28319 2929 *49312 01123 11505 01105 01203 5163
2832 29381 49301 01124 11515 01106 01204 5168
2839 29382 49302 01125 1304 01110 01205 5169
2840 29383 49311 01126 1363 01111 01206 5171
2848 29384 49312 01130 481 01112 01210 5172
2849 *29411 49320 01131 4820 01113 01211 5178
2850 2910 49321 01132 4821 01114 01212 74861
2851 2911 49322 01133 4822 01115 01213 *496
*28522 2912 49391 01134 48230 01116 01214 4941
2800 2913 49392 01135 48231 01120 01215 *5061
2814 2914 *49320 01136 48232 01121 01216 4941
2818 29181 49302 01140 48239 01122 0310 *5064
2824 29189 49312 01141 48240 01123 11505 4941
28260 2919 49322 01142 48241 01124 11515 *5069
28261 2920 49392 01143 48249 01125 1304 4941
28262 29211 *49321 01144 48281 01126 1363 *5178
28263 29212 49302 01145 48282 01130 481 49302
28269 2922 49312 01146 48283 01131 4820 49312
2830 29281 49322 01150 48284 01132 4821 49322
28310 29282 49392 01151 48289 01133 4822 49392
28311 29283 *49322 01152 4829 01134 48230 *51889
28319 29284 49301 01153 4830 01135 48231 49302
2832 29289 49302 01154 4831 01136 48232 49312
2839 2929 49311 01155 4838 01140 48239 49322
2840 29381 49312 01156 4841 01141 48240 49392
2848 29382 49320 01160 4843 01142 48241 *5198
2849 29383 49321 01161 4845 01143 48249 49302
2850 29384 49322 01162 4846 01144 48281 49312
2851 *44023 49391 01163 4847 01145 48282 49322
*28529 70710 49392 01164 4848 01146 48283 49392
2800 70711 *49390 01165 485 01150 48284 *5199
2814 70712 49302 01166 486 01151 48289 49302
------------------------------------------------------------------------
[[Page 26387]]
Table 6F.--Additions to the CC Exclusions List--Continued
CCs that are added to the list are in Table 6F--Additions to the CC
Exclusions List. Each of the principal diagnoses is shown with an
asterisk, and the revisions to the CC Exclusions List are provided in an
indented column immediately following the affected principal diagnosis.
------------------------------------------------------------------------
------------------------------------------------------------------------
49312 *70712 V421
49322 70710 V426
49392 70711 V427
*5583 70712 V4281
00841 70713 V4282
00842 70714 V4283
00843 70715 V4289
00844 70719 V432
00845 *70713 *99689
00846 70710 V4284
00847 70711 *99791
00849 70712 99687
*6000 70713 *99799
5960 70714 99687
5996 70715 *V4284
6010 70719 V4284
6012 *70714 *V4289
6013 70710 V4284
6021 70711 *V429
78820 70712 V4284
78829 70713
*6001 70714
5960 70715
5996 70719
6010 *70715
6012 70710
6013 70711
6021 70712
78820 70713
78829 70714
*6002 70715
5960 70719
5996 *70719
6010 70710
6012 70711
6013 70712
6021 70713
78820 70714
78829 70715
*6003 70719
5960 *7078
5996 70710
6010 70711
6012 70712
6013 70713
6021 70714
78820 70715
78829 70719
*6009 *7079
5960 70710
5996 70711
6010 70712
6012 70713
6013 70714
6021 70715
78820 70719
78829 *7098
*70710 70710
70710 70711
70711 70712
70712 70713
70713 70714
70714 70715
70715 70719
70719 *74861
*70711 4941
70710 *99680
70711 99687
70712 V4284
70713 *99687
70714 99680
70715 99687
70719 V420
------------------------------------------------------------------------
[[Page 26388]]
Table 6G.--Delections to the CC Exclusions List
CCs that are deleted from the list are in Table 6G--Deletions to the CC
Exclusions List. Each of the principal diagnoses is shown with an
asterisk, and the revisions to the CC Exclusions List are provided in an
indented column immediately following the affected principal diagnosis.
------------------------------------------------------------------------
------------------------------------------------------------------------
*01790 01135 48231 6021
494 01136 48232 78820
*01791 01140 48239 78829
494 01141 48240 *7071
*01792 01142 48241 7071
494 01143 48249 *7078
*01793 01144 48281 7071
494 01145 48282 *7079
*01794 01146 48283 7071
494 01150 48284 *7098
01795 01151 48289 7071
494 01152 4829 *74861
*01796 01153 4830 494
494 01154 4831
*2941 01155 4838
2910 01156 4841
2911 01160 4843
2912 01161 4845
2913 01162 4846
2914 01163 4847
29181 01164 4848
29189 01165 485
2919 01166 486
2920 01170 4870
29211 01171 494
29212 01172 4950
2922 01173 4951
29281 01174 4952
29282 01175 4953
29283 01176 4954
29284 01180 4955
29289 01181 4956
2929 01182 4957
29381 01183 4958
29382 01184 4959
29383 01185 496
29384 01186 5060
*44023 01190 5061
7071 01191 5070
*4871 01192 5071
494 01193 5078
*494 01194 5080
01100 01195 5081
01101 01196 515
01102 01200 5160
01103 01201 5161
01104 01202 5162
01105 01203 5163
01106 01204 5168
01110 01205 5169
01111 01206 5171
01112 01210 5172
01113 01211 5178
01114 01212 74861
01115 01213 *496
01116 01214 494
01120 01215 *5061
01121 01216 494
01122 0310 *5064
01123 11505 494
01124 11515 *5069
01125 1304 494
01126 1363 *600
01130 481 5960
01131 4820 5996
01132 4821 6010
01133 4822 6012
01134 48230 6013
------------------------------------------------------------------------
[[Page 26389]]
Table 7A.--Medicare Prospective Payment System, Selected Percentile Lengths of Stay
[FY99 MEDPAR Update 12/99 Grouper V17.0]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number Arithmetic 10th 25th 50th 75th 90th
DRG discharges mean LOS percentile percentile percentile percentile percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 35069 9.0962 2 4 6 12 19
2....................................... 7064 9.6692 3 5 7 12 19
4....................................... 6022 7.3316 1 2 5 9 16
5....................................... 95151 3.2852 1 1 2 3 7
6....................................... 340 3.2412 1 1 2 4 7
7....................................... 12054 10.2745 2 4 7 13 21
8....................................... 3662 3.0145 1 1 2 4 7
9....................................... 1623 6.4898 1 3 5 8 12
10...................................... 18297 6.5874 2 3 5 8 13
11...................................... 3300 4.1488 1 2 3 5 8
12...................................... 44849 6.0417 2 3 4 7 11
13...................................... 6185 5.0928 2 3 4 6 9
14...................................... 330036 5.9583 2 3 5 7 11
15...................................... 139608 3.6293 1 2 3 5 7
16...................................... 11101 6.1222 2 3 5 7 12
17...................................... 3437 3.3750 1 2 3 4 6
18...................................... 25899 5.5415 2 3 4 7 10
19...................................... 7951 3.7393 1 2 3 5 7
20...................................... 5735 10.2382 3 5 8 13 20
21...................................... 1356 6.8754 2 3 5 9 13
22...................................... 2501 4.9384 2 2 4 6 9
23...................................... 8311 4.2224 1 2 3 5 8
24...................................... 52472 5.0144 1 2 4 6 10
25...................................... 24380 3.3056 1 2 3 4 6
26...................................... 20 3.2000 1 1 2 3 7
27...................................... 3567 5.0962 1 1 3 6 11
28...................................... 10686 6.2281 1 3 5 8 13
29...................................... 3910 3.7133 1 2 3 5 7
31...................................... 3209 4.2312 1 2 3 5 8
32...................................... 1545 2.7398 1 1 2 3 5
34...................................... 19531 5.1937 1 2 4 6 10
35...................................... 5177 3.4199 1 2 3 4 6
36...................................... 4223 1.3640 1 1 1 1 2
37...................................... 1476 3.6917 1 1 3 5 8
38...................................... 115 2.5304 1 1 1 3 5
39...................................... 1152 1.9106 1 1 1 2 4
40...................................... 1755 3.5801 1 1 2 4 8
41...................................... 1 4.0000 4 4 4 4 4
42...................................... 2698 2.2279 1 1 1 3 5
43...................................... 83 3.3012 1 2 3 4 7
44...................................... 1226 4.9625 2 3 4 6 9
45...................................... 2490 3.2743 1 2 3 4 6
46...................................... 2940 4.5871 1 2 4 6 9
47...................................... 1183 3.2975 1 1 3 4 6
49...................................... 2228 4.9677 1 2 4 6 9
50...................................... 2569 1.9844 1 1 1 2 3
51...................................... 264 2.5606 1 1 1 3 6
52...................................... 196 2.1276 1 1 1 2 5
53...................................... 2569 3.6734 1 1 2 4 8
54...................................... 4 1.5000 1 1 1 1 3
55...................................... 1560 2.8865 1 1 1 3 6
56...................................... 526 3.0646 1 1 2 4 6
57...................................... 579 3.9862 1 1 2 4 8
59...................................... 111 2.4414 1 1 2 2 5
60...................................... 2 1.0000 1 1 1 1 1
61...................................... 208 4.8894 1 1 2 6 13
62...................................... 2 3.5000 2 2 5 5 5
63...................................... 3168 4.2601 1 2 3 5 9
64...................................... 3162 6.4756 1 2 4 8 14
65...................................... 31728 2.8963 1 1 2 4 5
66...................................... 6938 3.1721 1 1 3 4 6
67...................................... 477 3.5241 1 2 3 4 7
68...................................... 13401 4.1595 1 2 3 5 8
69...................................... 4228 3.2774 1 2 3 4 6
70...................................... 33 2.9091 1 2 3 4 5
71...................................... 105 3.8667 1 2 3 6 7
72...................................... 812 3.3017 1 2 3 4 6
73...................................... 6402 4.3380 1 2 3 5 8
75...................................... 39147 9.9967 3 5 8 12 20
76...................................... 39851 11.2556 3 5 9 14 21
[[Page 26390]]
77...................................... 2375 4.8880 1 2 4 7 10
78...................................... 30492 6.9444 3 5 6 8 11
79...................................... 183121 8.4551 3 4 7 11 16
80...................................... 8291 5.6652 2 3 5 7 10
81...................................... 5 9.2000 2 2 10 10 19
82...................................... 63683 6.9428 2 3 5 9 14
83...................................... 6462 5.5305 2 3 4 7 10
84...................................... 1494 3.3681 1 2 3 4 6
85...................................... 20066 6.3638 2 3 5 8 12
86...................................... 1923 3.7889 1 2 3 5 7
87...................................... 62959 6.2450 1 3 5 8 12
88...................................... 403808 5.2212 2 3 4 7 9
89...................................... 524107 6.0245 2 3 5 7 11
90...................................... 51271 4.2271 2 3 4 5 7
91...................................... 49 3.3061 1 2 3 4 5
92...................................... 13763 6.2465 2 3 5 8 12
93...................................... 1543 3.9942 1 2 3 5 7
94...................................... 12332 6.3027 2 3 5 8 12
95...................................... 1561 3.6887 1 2 3 5 7
96...................................... 64893 4.7277 2 3 4 6 8
97...................................... 31521 3.6879 1 2 3 5 7
98...................................... 18 4.6667 1 1 3 6 7
99...................................... 18166 3.2204 1 1 2 4 6
100..................................... 7230 2.2047 1 1 2 3 4
101..................................... 19700 4.4248 1 2 3 5 8
102..................................... 4970 2.7360 1 1 2 3 5
103..................................... 442 48.6041 9 12 29 64 112
104..................................... 33069 11.6306 3 6 10 15 22
105..................................... 29348 9.2675 4 5 7 11 17
106..................................... 3800 11.2111 5 7 9 13 20
107..................................... 90499 10.3531 5 7 9 12 17
108..................................... 5234 10.5728 3 5 8 13 20
109..................................... 61584 7.7338 4 5 6 9 13
110..................................... 54902 9.4567 2 5 8 11 18
111..................................... 7109 5.4788 2 4 5 7 8
112..................................... 60796 3.7594 1 1 3 5 8
113..................................... 44201 12.0562 3 6 9 15 24
114..................................... 8478 8.2536 2 4 7 10 16
115..................................... 14032 8.4152 1 4 7 11 16
116..................................... 308071 3.7287 1 1 3 5 8
117..................................... 3404 4.0523 1 1 2 5 9
118..................................... 6649 2.8117 1 1 1 3 6
119..................................... 1445 4.8374 1 1 3 6 12
120..................................... 36651 8.1192 1 2 5 10 18
121..................................... 163449 6.4387 2 3 5 8 12
122..................................... 80682 3.8317 1 2 3 5 7
123..................................... 40870 4.5742 1 1 3 6 11
124..................................... 134743 4.3708 1 2 3 6 8
125..................................... 74923 2.7862 1 1 2 4 5
126..................................... 5131 11.6936 3 6 9 14 22
127..................................... 680654 5.3354 2 3 4 7 10
128..................................... 11526 5.8044 3 4 5 7 9
129..................................... 4173 2.8447 1 1 1 3 7
130..................................... 89048 5.8037 2 3 5 7 10
131..................................... 26830 4.3785 1 3 4 6 7
132..................................... 152932 3.0474 1 1 2 4 6
133..................................... 7573 2.3956 1 1 2 3 4
134..................................... 32813 3.2987 1 2 3 4 6
135..................................... 7100 4.4668 1 2 3 5 9
136..................................... 1170 2.9120 1 1 2 4 6
138..................................... 191436 4.0071 1 2 3 5 8
139..................................... 77194 2.5069 1 1 2 3 5
140..................................... 76478 2.7136 1 1 2 3 5
141..................................... 85791 3.7068 1 2 3 5 7
142..................................... 42652 2.6766 1 1 2 3 5
143..................................... 185700 2.1667 1 1 2 3 4
144..................................... 78800 5.3171 1 2 4 7 11
145..................................... 6884 2.8117 1 1 2 4 6
146..................................... 11215 10.1815 5 7 9 12 17
147..................................... 2418 6.6208 3 5 6 8 10
[[Page 26391]]
148..................................... 134272 12.1101 5 7 10 14 22
149..................................... 17551 6.6488 4 5 6 8 10
150..................................... 20300 11.1450 4 7 9 14 20
151..................................... 4479 5.9272 2 3 5 8 10
152..................................... 4441 8.1743 3 5 7 10 14
153..................................... 1914 5.4713 3 4 5 7 8
154..................................... 29346 13.2615 4 7 10 16 25
155..................................... 6052 4.3354 1 2 3 6 8
156..................................... 2 28.0000 28 28 28 28 28
157..................................... 8196 5.4926 1 2 4 7 11
158..................................... 4393 2.6271 1 1 2 3 5
159..................................... 16421 5.0258 1 2 4 6 10
160..................................... 10974 2.7204 1 1 2 4 5
161..................................... 11483 4.1695 1 2 3 5 9
162..................................... 7018 1.9577 1 1 1 2 4
163..................................... 8 2.7500 1 1 3 3 3
164..................................... 4720 8.4019 4 5 7 10 15
165..................................... 1942 4.8553 2 3 5 6 8
166..................................... 3307 5.0889 2 3 4 6 9
167..................................... 2896 2.7099 1 2 2 3 5
168..................................... 1511 4.5963 1 2 3 6 9
169..................................... 802 2.4214 1 1 2 3 5
170..................................... 11287 11.1669 2 5 8 14 23
171..................................... 1125 4.7911 1 2 4 6 9
172..................................... 30485 6.9710 2 3 5 9 14
173..................................... 2492 3.8435 1 1 3 5 8
174..................................... 236408 4.8222 2 3 4 6 9
175..................................... 28026 2.9414 1 2 3 4 5
176..................................... 15607 5.2668 2 3 4 6 10
177..................................... 9489 4.5521 2 2 4 6 8
178..................................... 3568 3.1373 1 2 3 4 6
179..................................... 12177 6.0139 2 3 5 7 11
180..................................... 85083 5.3978 2 3 4 7 10
181..................................... 24320 3.4134 1 2 3 4 6
182..................................... 232501 4.3626 1 2 3 5 8
183..................................... 78432 2.9618 1 1 2 4 6
184..................................... 98 3.2449 1 2 2 4 5
185..................................... 4300 4.4963 1 2 3 6 9
186..................................... 2 4.5000 2 2 7 7 7
187..................................... 722 3.8130 1 2 3 5 8
188..................................... 74594 5.5723 1 2 4 7 11
189..................................... 11097 3.1388 1 1 2 4 6
190..................................... 69 6.0290 2 3 4 6 11
191..................................... 9367 14.0878 4 7 10 18 28
192..................................... 974 6.5842 2 4 6 8 11
193..................................... 5669 12.5490 5 7 10 15 23
194..................................... 755 6.7497 2 4 6 8 12
195..................................... 4869 9.9029 4 6 8 12 17
196..................................... 1190 5.6832 2 4 5 7 9
197..................................... 20225 8.7363 3 5 7 11 16
198..................................... 6079 4.4996 2 3 4 6 8
199..................................... 1724 9.6456 3 4 8 12 19
200..................................... 1071 10.7404 2 4 8 14 22
201..................................... 1465 13.8314 3 6 11 18 27
202..................................... 25595 6.5031 2 3 5 8 13
203..................................... 28958 6.6940 2 3 5 9 13
204..................................... 54818 5.8581 2 3 4 7 11
205..................................... 22519 6.2964 2 3 5 8 12
206..................................... 1778 3.8335 1 2 3 5 7
207..................................... 30768 5.1176 1 2 4 6 10
208..................................... 9616 2.8974 1 1 2 4 6
209..................................... 342301 5.1232 3 3 4 6 8
210..................................... 126555 6.8082 3 4 6 8 11
211..................................... 31227 4.9152 3 4 4 6 7
212..................................... 7 3.0000 2 2 2 3 4
213..................................... 8882 8.7299 2 4 7 11 17
216..................................... 5822 9.7583 2 4 7 12 19
217..................................... 17573 13.0833 3 5 9 16 28
218..................................... 21344 5.3594 2 3 4 6 10
219..................................... 19125 3.2444 1 2 3 4 5
[[Page 26392]]
220..................................... 2 2.5000 1 1 4 4 4
223..................................... 17434 2.5812 1 1 2 3 5
224..................................... 7953 2.0448 1 1 2 3 4
225..................................... 5575 4.7146 1 2 3 6 10
226..................................... 4985 6.2828 1 2 4 8 13
227..................................... 4416 2.6594 1 1 2 3 5
228..................................... 2437 3.5568 1 1 2 4 8
229..................................... 1080 2.3944 1 1 2 3 5
230..................................... 2102 5.1237 1 2 3 6 10
231..................................... 10618 4.8282 1 2 3 6 10
232..................................... 565 3.5894 1 1 2 4 9
233..................................... 4542 7.6797 2 3 5 9 16
234..................................... 2666 3.5709 1 2 3 4 7
235..................................... 5334 5.1245 1 2 4 6 10
236..................................... 38564 4.8516 1 3 4 6 9
237..................................... 1576 3.7386 1 2 3 5 7
238..................................... 7594 8.4664 3 4 6 10 16
239..................................... 51719 6.2172 2 3 5 8 12
240..................................... 11850 6.5754 2 3 5 8 13
241..................................... 2953 3.9401 1 2 3 5 7
242..................................... 2477 6.5268 2 3 5 8 12
243..................................... 84831 4.7022 1 3 4 6 9
244..................................... 11891 4.7802 1 2 4 6 9
245..................................... 4929 3.7206 1 2 3 4 7
246..................................... 1342 3.6461 1 2 3 4 7
247..................................... 15047 3.4443 1 1 3 4 7
248..................................... 9336 4.7321 1 2 4 6 9
249..................................... 10719 3.7768 1 1 3 5 8
250..................................... 3509 4.2485 1 2 3 5 8
251..................................... 2351 2.9872 1 1 3 4 5
252..................................... 1 2.0000 2 2 2 2 2
253..................................... 18878 4.6841 1 3 4 6 9
254..................................... 10341 3.2080 1 2 3 4 6
255..................................... 1 1.0000 1 1 1 1 1
256..................................... 5803 5.1260 1 2 4 6 10
257..................................... 16795 2.8263 1 2 2 3 5
258..................................... 15710 2.0006 1 1 2 2 3
259..................................... 3717 2.7896 1 1 1 3 6
260..................................... 4780 1.4749 1 1 1 2 2
261..................................... 1730 2.1624 1 1 1 2 4
262..................................... 673 3.8098 1 1 3 5 7
263..................................... 24527 11.5534 3 5 8 14 23
264..................................... 3877 6.9010 2 3 5 8 14
265..................................... 3868 6.6099 1 2 4 8 14
266..................................... 2527 3.3174 1 1 2 4 7
267..................................... 255 5.2353 1 1 3 6 12
268..................................... 896 3.6953 1 1 2 4 8
269..................................... 8856 8.2516 2 3 6 10 16
270..................................... 2734 3.2579 1 1 2 4 7
271..................................... 21090 7.1019 2 4 6 8 13
272..................................... 5465 6.3420 2 3 5 8 12
273..................................... 1341 4.2118 1 2 3 5 8
274..................................... 2368 6.9548 2 3 5 9 14
275..................................... 224 3.3125 1 1 2 4 7
276..................................... 1076 4.6515 1 2 4 6 9
277..................................... 83707 5.7178 2 3 5 7 10
278..................................... 28524 4.3359 2 3 4 5 7
279..................................... 4 4.0000 2 2 4 5 5
280..................................... 15047 4.1980 1 2 3 5 8
281..................................... 6682 3.0805 1 1 3 4 6
283..................................... 5322 4.5569 1 2 3 6 9
284..................................... 1852 3.1960 1 1 2 4 6
285..................................... 6125 10.4263 3 5 8 13 20
286..................................... 1995 6.2000 2 3 5 7 11
287..................................... 5974 10.5387 3 5 8 13 20
288..................................... 2252 5.7234 2 3 4 6 9
289..................................... 4326 3.1248 1 1 2 3 7
290..................................... 8214 2.4329 1 1 2 2 4
291..................................... 57 1.6316 1 1 1 2 2
292..................................... 4945 9.9610 2 4 7 13 21
[[Page 26393]]
293..................................... 321 4.9346 1 2 4 7 10
294..................................... 83924 4.7128 1 2 4 6 9
295..................................... 3464 3.8467 1 2 3 5 7
296..................................... 232274 5.2398 2 3 4 6 10
297..................................... 40842 3.4744 1 2 3 4 6
298..................................... 106 3.1887 1 2 2 4 6
299..................................... 1052 5.5542 1 2 4 6 11
300..................................... 15582 6.1317 2 3 5 8 12
301..................................... 3101 3.7004 1 2 3 5 7
302..................................... 7525 9.4141 4 5 7 11 16
303..................................... 19405 8.4850 4 5 7 10 15
304..................................... 11967 8.8979 2 4 7 11 18
305..................................... 2852 3.8443 1 2 3 5 7
306..................................... 7925 5.4829 1 2 3 7 12
307..................................... 2226 2.2668 1 1 2 3 4
308..................................... 7673 6.3836 1 2 4 8 14
309..................................... 3947 2.4880 1 1 2 3 5
310..................................... 23701 4.3591 1 2 3 5 9
311..................................... 8200 1.8902 1 1 1 2 3
312..................................... 1570 4.5166 1 1 3 6 10
313..................................... 633 2.1153 1 1 1 3 4
314..................................... 2 1.0000 1 1 1 1 1
315..................................... 28524 7.4721 1 1 5 10 17
316..................................... 96406 6.6791 2 3 5 8 13
317..................................... 1230 3.2114 1 1 2 3 6
318..................................... 5544 5.9975 1 3 4 7 12
319..................................... 460 2.8630 1 1 2 4 6
320..................................... 181708 5.3834 2 3 4 7 10
321..................................... 28174 3.8452 1 2 3 5 7
322..................................... 69 4.0580 1 2 3 5 7
323..................................... 16353 3.2183 1 1 2 4 7
324..................................... 7365 1.8789 1 1 1 2 3
325..................................... 7788 3.8947 1 2 3 5 7
326..................................... 2414 2.6582 1 1 2 3 5
327..................................... 7 9.2857 1 1 2 4 13
328..................................... 718 3.9053 1 1 3 5 8
329..................................... 104 2.0481 1 1 1 3 4
331..................................... 43233 5.5300 1 2 4 7 11
332..................................... 4795 3.2715 1 1 2 4 7
333..................................... 296 5.0507 1 2 3 6 10
334..................................... 12132 4.8938 2 3 4 6 8
335..................................... 11393 3.4104 2 3 3 4 5
336..................................... 40525 3.5229 1 2 3 4 7
337..................................... 30540 2.1759 1 1 2 3 3
338..................................... 1641 5.2956 1 2 3 7 12
339..................................... 1503 4.5269 1 1 3 6 10
340..................................... 1 1.0000 1 1 1 1 1
341..................................... 3836 3.2018 1 1 2 3 7
342..................................... 775 3.1174 1 2 2 4 6
344..................................... 3934 2.2567 1 1 1 2 4
345..................................... 1272 3.7673 1 1 2 5 8
346..................................... 4622 5.8090 1 3 4 7 11
347..................................... 396 3.3712 1 1 2 4 7
348..................................... 3105 4.2029 1 2 3 5 8
349..................................... 589 2.6027 1 1 2 3 5
350..................................... 6157 4.3937 2 2 4 5 8
352..................................... 646 3.8498 1 2 3 5 8
353..................................... 2631 6.7081 3 3 5 8 13
354..................................... 8209 5.8725 3 3 4 7 10
355..................................... 5698 3.3243 2 3 3 4 5
356..................................... 25961 2.4179 1 1 2 3 4
357..................................... 5767 8.4947 3 4 7 10 16
358..................................... 21628 4.3926 2 3 3 5 7
359..................................... 29103 2.8141 2 2 3 3 4
360..................................... 16133 2.9634 1 2 2 3 5
361..................................... 420 3.4524 1 1 2 4 7
362..................................... 1 1.0000 1 1 1 1 1
363..................................... 3079 3.4784 1 2 2 3 7
364..................................... 1611 3.5847 1 1 2 5 7
365..................................... 1917 7.3005 2 3 5 9 16
[[Page 26394]]
366..................................... 4226 6.7283 1 3 5 8 14
367..................................... 472 3.1462 1 1 2 4 7
368..................................... 2861 6.7113 2 3 5 8 13
369..................................... 2832 3.1963 1 1 2 4 6
370..................................... 1141 5.7160 3 3 4 5 9
371..................................... 1174 3.6567 2 3 3 4 5
372..................................... 916 3.4509 2 2 2 3 5
373..................................... 3916 2.2829 1 2 2 2 3
374..................................... 125 3.4880 2 2 2 3 5
375..................................... 6 2.6667 2 2 2 3 3
376..................................... 254 3.4803 1 2 2 4 7
377..................................... 53 3.8679 1 1 2 5 8
378..................................... 151 2.3444 1 1 2 3 4
379..................................... 355 3.1127 1 1 2 3 7
380..................................... 74 2.1622 1 1 2 2 4
381..................................... 176 1.9545 1 1 1 2 3
382..................................... 39 1.3077 1 1 1 1 2
383..................................... 1545 3.8913 1 1 3 5 8
384..................................... 123 2.3415 1 1 1 2 4
389..................................... 8 5.8750 3 3 4 8 10
390..................................... 19 3.7368 1 1 3 5 7
392..................................... 2508 9.4769 3 4 7 12 19
393..................................... 1 8.0000 8 8 8 8 8
394..................................... 1724 6.6810 1 2 4 8 15
395..................................... 80464 4.5303 1 2 3 6 9
396..................................... 17 3.7059 1 1 2 5 6
397..................................... 18071 5.2277 1 2 4 7 10
398..................................... 18051 5.9638 2 3 5 7 11
399..................................... 1614 3.5520 1 2 3 4 7
400..................................... 6845 9.0488 1 3 6 12 20
401..................................... 5827 11.1903 2 5 8 14 23
402..................................... 1483 3.9400 1 1 3 5 8
403..................................... 33277 8.0524 2 3 6 10 17
404..................................... 4491 4.2224 1 2 3 6 9
406..................................... 2546 10.2859 3 4 7 13 21
407..................................... 695 4.4086 1 2 4 6 8
408..................................... 2246 7.7061 1 2 5 10 18
409..................................... 3281 5.9113 2 3 4 6 11
410..................................... 40863 3.7201 1 2 3 5 6
411..................................... 13 2.3077 1 1 2 4 4
412..................................... 29 2.7241 1 1 2 3 6
413..................................... 6149 7.2477 2 3 6 9 14
414..................................... 712 4.0941 1 2 3 5 9
415..................................... 39856 14.1713 4 6 11 18 28
416..................................... 195783 7.3483 2 4 6 9 14
417..................................... 32 6.1875 1 2 4 7 13
418..................................... 22097 6.1239 2 3 5 7 11
419..................................... 15859 4.8212 2 2 4 6 9
420..................................... 3091 3.5642 1 2 3 4 6
421..................................... 12242 3.8638 1 2 3 5 7
422..................................... 96 5.2708 1 2 2 5 7
423..................................... 8073 8.1416 2 3 6 10 17
424..................................... 1354 13.3936 2 5 9 16 28
425..................................... 15006 4.0716 1 2 3 5 8
426..................................... 4313 4.5613 1 2 3 6 9
427..................................... 1660 5.0283 1 2 3 6 10
428..................................... 839 7.1025 1 2 4 8 15
429..................................... 27480 6.4737 2 3 5 8 12
430..................................... 58011 8.2066 2 3 6 10 16
431..................................... 295 6.5864 2 3 5 8 13
432..................................... 389 4.7506 1 2 3 5 9
433..................................... 5781 3.0073 1 1 2 4 6
434..................................... 21835 5.0844 1 2 4 6 9
435..................................... 14486 4.2925 1 2 4 5 8
436..................................... 3499 12.8337 4 7 11 17 25
437..................................... 9750 8.9544 3 5 8 11 15
439..................................... 1287 8.1756 1 3 5 10 17
440..................................... 5017 8.8433 2 3 6 10 19
441..................................... 579 3.2383 1 1 2 4 7
442..................................... 15896 8.2292 1 3 6 10 17
[[Page 26395]]
443..................................... 3547 3.3941 1 1 2 4 7
444..................................... 5150 4.2252 1 2 3 5 8
445..................................... 2223 3.0031 1 1 2 4 5
447..................................... 4854 2.5117 1 1 2 3 5
448..................................... 1 4.0000 4 4 4 4 4
449..................................... 26543 3.6722 1 1 3 4 7
450..................................... 6363 2.0525 1 1 1 2 4
451..................................... 1 1.0000 1 1 1 1 1
452..................................... 21656 4.9536 1 2 3 6 10
453..................................... 4464 2.8156 1 1 2 3 5
454..................................... 4930 4.5554 1 2 3 6 9
455..................................... 1070 2.6262 1 1 2 3 5
461..................................... 3356 4.5584 1 1 2 5 11
462..................................... 12630 11.5264 4 6 9 15 21
463..................................... 18895 4.2653 1 2 3 5 8
464..................................... 5456 3.0770 1 1 2 4 6
465..................................... 227 3.3612 1 1 2 3 7
466..................................... 1719 3.8674 1 1 2 4 8
467..................................... 1301 4.0638 1 1 2 4 7
468..................................... 58386 12.9325 3 6 10 17 26
471..................................... 11423 5.7339 3 4 5 6 9
473..................................... 7615 12.8411 2 3 7 19 32
475..................................... 109114 11.1765 2 5 9 15 22
476..................................... 4448 11.6369 2 5 10 15 21
477..................................... 25690 8.1425 1 3 6 10 17
478..................................... 111192 7.3159 1 3 5 9 15
479..................................... 22375 3.6220 1 2 3 5 7
480..................................... 460 19.1848 7 9 14 23 38
481..................................... 229 27.1485 16 19 23 32 43
482..................................... 6119 12.7756 4 7 10 15 24
483..................................... 43070 38.8321 14 21 32 49 70
484..................................... 323 13.3065 2 5 10 18 28
485..................................... 2932 9.3905 4 5 7 11 17
486..................................... 2012 12.1511 1 5 9 16 24
487..................................... 3491 7.5408 1 3 6 10 15
488..................................... 767 16.9465 4 7 12 21 34
489..................................... 14253 8.5597 2 3 6 10 18
490..................................... 5283 5.1333 1 2 4 6 10
491..................................... 11332 3.4896 2 2 3 4 6
492..................................... 2667 16.1234 4 5 9 26 34
493..................................... 54030 5.7170 1 3 5 7 11
494..................................... 27254 2.4838 1 1 2 3 5
495..................................... 145 20.2552 6 8 12 18 33
496..................................... 1270 9.9843 4 5 7 12 18
497..................................... 22593 6.2173 2 3 5 7 11
498..................................... 19133 3.4179 1 2 3 4 6
499..................................... 30738 4.7687 1 2 4 6 9
500..................................... 42090 2.6897 1 1 2 3 5
501..................................... 1943 10.5713 4 5 8 13 20
502..................................... 612 5.9379 2 3 5 7 10
503..................................... 5563 3.9730 1 2 3 5 7
504..................................... 122 30.0984 10 15 25 40 60
505..................................... 153 4.7190 1 1 2 6 12
506..................................... 962 17.6258 4 8 14 24 37
507..................................... 280 9.1857 2 4 7 13 18
508..................................... 637 7.1350 2 3 5 9 15
509..................................... 165 6.1333 1 2 4 8 12
510..................................... 1653 7.8506 2 3 5 9 17
511..................................... 594 4.4646 1 1 3 6 10
----------------
10930692
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 7B.--Medicare Prospective Payment System, Selected Percentile Lengths of Stay
[FY99 MEDPAR Update 12/99 Grouper V18.0]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number Arithmetic 10th 25th 50th 75th 90th
DRG discharges mean LOS percentile percentile percentile percentile percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 35069 9.0962 2 4 6 12 19
[[Page 26396]]
2....................................... 7064 9.6692 3 5 7 12 19
4....................................... 6022 7.3316 1 2 5 9 16
5....................................... 95151 3.2852 1 1 2 3 7
6....................................... 340 3.2412 1 1 2 4 7
7....................................... 12054 10.2745 2 4 7 13 21
8....................................... 3662 3.0145 1 1 2 4 7
9....................................... 1623 6.4898 1 3 5 8 12
10...................................... 18297 6.5874 2 3 5 8 13
11...................................... 3300 4.1488 1 2 3 5 8
12...................................... 44849 6.0417 2 3 4 7 11
13...................................... 6185 5.0928 2 3 4 6 9
14...................................... 362463 6.0528 2 3 5 7 11
15...................................... 139608 3.6293 1 2 3 5 7
16...................................... 11101 6.1222 2 3 5 7 12
17...................................... 3437 3.3750 1 2 3 4 6
18...................................... 25899 5.5415 2 3 4 7 10
19...................................... 7951 3.7393 1 2 3 5 7
20...................................... 5735 10.2382 3 5 8 13 20
21...................................... 1356 6.8754 2 3 5 9 13
22...................................... 2501 4.9384 2 2 4 6 9
23...................................... 8311 4.2224 1 2 3 5 8
24...................................... 52472 5.0144 1 2 4 6 10
25...................................... 24380 3.3056 1 2 3 4 6
26...................................... 20 3.2000 1 1 2 3 7
27...................................... 3567 5.0962 1 1 3 6 11
28...................................... 10685 6.2270 1 3 5 8 13
29...................................... 3910 3.7133 1 2 3 5 7
31...................................... 3209 4.2312 1 2 3 5 8
32...................................... 1545 2.7398 1 1 2 3 5
34...................................... 19531 5.1937 1 2 4 6 10
35...................................... 5177 3.4199 1 2 3 4 6
36...................................... 4223 1.3640 1 1 1 1 2
37...................................... 1476 3.6917 1 1 3 5 8
38...................................... 115 2.5304 1 1 1 3 5
39...................................... 1152 1.9106 1 1 1 2 4
40...................................... 1755 3.5801 1 1 2 4 8
41...................................... 1 4.0000 4 4 4 4 4
42...................................... 2698 2.2279 1 1 1 3 5
43...................................... 83 3.3012 1 2 3 4 7
44...................................... 1226 4.9625 2 3 4 6 9
45...................................... 2490 3.2743 1 2 3 4 6
46...................................... 2940 4.5871 1 2 4 6 9
47...................................... 1183 3.2975 1 1 3 4 6
49...................................... 2228 4.9677 1 2 4 6 9
50...................................... 2569 1.9844 1 1 1 2 3
51...................................... 264 2.5606 1 1 1 3 6
52...................................... 196 2.1276 1 1 1 2 5
53...................................... 2569 3.6734 1 1 2 4 8
54...................................... 4 1.5000 1 1 1 1 3
55...................................... 1560 2.8865 1 1 1 3 6
56...................................... 526 3.0646 1 1 2 4 6
57...................................... 579 3.9862 1 1 2 4 8
59...................................... 111 2.4414 1 1 2 2 5
60...................................... 2 1.0000 1 1 1 1 1
61...................................... 208 4.8894 1 1 2 6 13
62...................................... 2 3.5000 2 2 5 5 5
63...................................... 3168 4.2601 1 2 3 5 9
64...................................... 3162 6.4756 1 2 4 8 14
65...................................... 31728 2.8963 1 1 2 4 5
66...................................... 6938 3.1721 1 1 3 4 6
67...................................... 477 3.5241 1 2 3 4 7
68...................................... 13401 4.1595 1 2 3 5 8
69...................................... 4228 3.2774 1 2 3 4 6
70...................................... 33 2.9091 1 2 3 4 5
71...................................... 105 3.8667 1 2 3 6 7
72...................................... 812 3.3017 1 2 3 4 6
73...................................... 6402 4.3380 1 2 3 5 8
75...................................... 39147 9.9967 3 5 8 12 20
76...................................... 39851 11.2556 3 5 9 14 21
77...................................... 2375 4.8880 1 2 4 7 10
[[Page 26397]]
78...................................... 30492 6.9444 3 5 6 8 11
79...................................... 183121 8.4551 3 4 7 11 16
80...................................... 8291 5.6652 2 3 5 7 10
81...................................... 5 9.2000 2 2 10 10 19
82...................................... 63683 6.9428 2 3 5 9 14
83...................................... 6462 5.5305 2 3 4 7 10
84...................................... 1494 3.3681 1 2 3 4 6
85...................................... 20066 6.3638 2 3 5 8 12
86...................................... 1923 3.7889 1 2 3 5 7
87...................................... 62959 6.2450 1 3 5 8 12
88...................................... 403808 5.2212 2 3 4 7 9
89...................................... 524106 6.0245 2 3 5 7 11
90...................................... 51271 4.2271 2 3 4 5 7
91...................................... 49 3.3061 1 2 3 4 5
92...................................... 13763 6.2465 2 3 5 8 12
93...................................... 1543 3.9942 1 2 3 5 7
94...................................... 12332 6.3027 2 3 5 8 12
95...................................... 1561 3.6887 1 2 3 5 7
96...................................... 64893 4.7277 2 3 4 6 8
97...................................... 31521 3.6879 1 2 3 5 7
98...................................... 18 4.6667 1 1 3 6 7
99...................................... 18166 3.2204 1 1 2 4 6
100..................................... 7230 2.2047 1 1 2 3 4
101..................................... 19700 4.4248 1 2 3 5 8
102..................................... 4970 2.7360 1 1 2 3 5
103..................................... 442 48.6041 9 12 29 64 112
104..................................... 33352 11.6423 3 6 10 15 22
105..................................... 29488 9.2812 4 5 7 11 17
106..................................... 3785 11.2201 5 7 9 13 20
107..................................... 90361 10.3492 5 7 9 12 17
108..................................... 5213 10.5580 3 5 8 13 20
109..................................... 61526 7.7320 4 5 6 9 13
110..................................... 54724 9.4413 2 5 8 11 18
111..................................... 7102 5.4816 2 4 5 7 8
112..................................... 60794 3.7592 1 1 3 5 8
113..................................... 49775 12.1191 4 6 9 15 24
114..................................... 8478 8.2536 2 4 7 10 16
115..................................... 14032 8.4152 1 4 7 11 16
116..................................... 308070 3.7287 1 1 3 5 8
117..................................... 3404 4.0523 1 1 2 5 9
118..................................... 6649 2.8117 1 1 1 3 6
119..................................... 1445 4.8374 1 1 3 6 12
120..................................... 36650 8.1194 1 2 5 10 18
121..................................... 163449 6.4387 2 3 5 8 12
122..................................... 80682 3.8317 1 2 3 5 7
123..................................... 40869 4.5742 1 1 3 6 11
124..................................... 134743 4.3708 1 2 3 6 8
125..................................... 74923 2.7862 1 1 2 4 5
126..................................... 5131 11.6936 3 6 9 14 22
127..................................... 680654 5.3354 2 3 4 7 10
128..................................... 11526 5.8044 3 4 5 7 9
129..................................... 4173 2.8447 1 1 1 3 7
130..................................... 89048 5.8037 2 3 5 7 10
131..................................... 26830 4.3785 1 3 4 6 7
132..................................... 152932 3.0474 1 1 2 4 6
133..................................... 7573 2.3956 1 1 2 3 4
134..................................... 32813 3.2987 1 2 3 4 6
135..................................... 7100 4.4668 1 2 3 5 9
136..................................... 1170 2.9120 1 1 2 4 6
138..................................... 191436 4.0071 1 2 3 5 8
139..................................... 77194 2.5069 1 1 2 3 5
140..................................... 76478 2.7136 1 1 2 3 5
141..................................... 85791 3.7068 1 2 3 5 7
142..................................... 42652 2.6766 1 1 2 3 5
143..................................... 185700 2.1667 1 1 2 3 4
144..................................... 78800 5.3171 1 2 4 7 11
145..................................... 6884 2.8117 1 1 2 4 6
146..................................... 11215 10.1815 5 7 9 12 17
147..................................... 2418 6.6208 3 5 6 8 10
148..................................... 134272 12.1101 5 7 10 14 22
[[Page 26398]]
149..................................... 17551 6.6488 4 5 6 8 10
150..................................... 20300 11.1450 4 7 9 14 20
151..................................... 4479 5.9272 2 3 5 8 10
152..................................... 4441 8.1743 3 5 7 10 14
153..................................... 1914 5.4713 3 4 5 7 8
154..................................... 29346 13.2615 4 7 10 16 25
155..................................... 6052 4.3354 1 2 3 6 8
156..................................... 2 28.0000 28 28 28 28 28
157..................................... 8196 5.4926 1 2 4 7 11
158..................................... 4393 2.6271 1 1 2 3 5
159..................................... 16421 5.0258 1 2 4 6 10
160..................................... 10974 2.7204 1 1 2 4 5
161..................................... 11483 4.1695 1 2 3 5 9
162..................................... 7018 1.9577 1 1 1 2 4
163..................................... 8 2.7500 1 1 3 3 3
164..................................... 4720 8.4019 4 5 7 10 15
165..................................... 1942 4.8553 2 3 5 6 8
166..................................... 3307 5.0889 2 3 4 6 9
167..................................... 2896 2.7099 1 2 2 3 5
168..................................... 1511 4.5963 1 2 3 6 9
169..................................... 802 2.4214 1 1 2 3 5
170..................................... 11287 11.1669 2 5 8 14 23
171..................................... 1125 4.7911 1 2 4 6 9
172..................................... 30485 6.9710 2 3 5 9 14
173..................................... 2492 3.8435 1 1 3 5 8
174..................................... 236408 4.8222 2 3 4 6 9
175..................................... 28026 2.9414 1 2 3 4 5
176..................................... 15607 5.2668 2 3 4 6 10
177..................................... 9489 4.5521 2 2 4 6 8
178..................................... 3568 3.1373 1 2 3 4 6
179..................................... 12177 6.0139 2 3 5 7 11
180..................................... 85083 5.3978 2 3 4 7 10
181..................................... 24320 3.4134 1 2 3 4 6
182..................................... 232501 4.3626 1 2 3 5 8
183..................................... 78432 2.9618 1 1 2 4 6
184..................................... 98 3.2449 1 2 2 4 5
185..................................... 4300 4.4963 1 2 3 6 9
186..................................... 2 4.5000 2 2 7 7 7
187..................................... 722 3.8130 1 2 3 5 8
188..................................... 74594 5.5723 1 2 4 7 11
189..................................... 11097 3.1388 1 1 2 4 6
190..................................... 69 6.0290 2 3 4 6 11
191..................................... 9367 14.0878 4 7 10 18 28
192..................................... 974 6.5842 2 4 6 8 11
193..................................... 5669 12.5490 5 7 10 15 23
194..................................... 755 6.7497 2 4 6 8 12
195..................................... 4869 9.9029 4 6 8 12 17
196..................................... 1190 5.6832 2 4 5 7 9
197..................................... 20225 8.7363 3 5 7 11 16
198..................................... 6079 4.4996 2 3 4 6 8
199..................................... 1724 9.6456 3 4 8 12 19
200..................................... 1071 10.7404 2 4 8 14 22
201..................................... 1465 13.8314 3 6 11 18 27
202..................................... 25595 6.5031 2 3 5 8 13
203..................................... 28958 6.6940 2 3 5 9 13
204..................................... 54818 5.8581 2 3 4 7 11
205..................................... 22519 6.2964 2 3 5 8 12
206..................................... 1778 3.8335 1 2 3 5 7
207..................................... 30768 5.1176 1 2 4 6 10
208..................................... 9616 2.8974 1 1 2 4 6
209..................................... 394168 5.1231 3 3 4 6 8
210..................................... 146423 6.8039 3 4 6 8 11
211..................................... 35938 4.9292 3 4 4 6 7
212..................................... 7 3.0000 2 2 2 3 4
213..................................... 8882 8.7299 2 4 7 11 17
216..................................... 5822 9.7583 2 4 7 12 19
217..................................... 17573 13.0833 3 5 9 16 28
218..................................... 21344 5.3594 2 3 4 6 10
219..................................... 19125 3.2444 1 2 3 4 5
220..................................... 2 2.5000 1 1 4 4 4
[[Page 26399]]
223..................................... 17434 2.5812 1 1 2 3 5
224..................................... 7953 2.0448 1 1 2 3 4
225..................................... 5575 4.7146 1 2 3 6 10
226..................................... 4985 6.2828 1 2 4 8 13
227..................................... 4416 2.6594 1 1 2 3 5
228..................................... 2437 3.5568 1 1 2 4 8
229..................................... 1080 2.3944 1 1 2 3 5
230..................................... 2102 5.1237 1 2 3 6 10
231..................................... 10618 4.8282 1 2 3 6 10
232..................................... 565 3.5894 1 1 2 4 9
233..................................... 4542 7.6797 2 3 5 9 16
234..................................... 2666 3.5709 1 2 3 4 7
235..................................... 5334 5.1245 1 2 4 6 10
236..................................... 43318 4.8912 2 3 4 6 9
237..................................... 1576 3.7386 1 2 3 5 7
238..................................... 7594 8.4664 3 4 6 10 16
239..................................... 51719 6.2172 2 3 5 8 12
240..................................... 11850 6.5754 2 3 5 8 13
241..................................... 2953 3.9401 1 2 3 5 7
242..................................... 2477 6.5268 2 3 5 8 12
243..................................... 84831 4.7022 1 3 4 6 9
244..................................... 11891 4.7802 1 2 4 6 9
245..................................... 4929 3.7206 1 2 3 4 7
246..................................... 1342 3.6461 1 2 3 4 7
247..................................... 15047 3.4443 1 1 3 4 7
248..................................... 9336 4.7321 1 2 4 6 9
249..................................... 10719 3.7768 1 1 3 5 8
250..................................... 3509 4.2485 1 2 3 5 8
251..................................... 2351 2.9872 1 1 3 4 5
252..................................... 1 2.0000 2 2 2 2 2
253..................................... 18878 4.6841 1 3 4 6 9
254..................................... 10341 3.2080 1 2 3 4 6
255..................................... 1 1.0000 1 1 1 1 1
256..................................... 5803 5.1260 1 2 4 6 10
257..................................... 16795 2.8263 1 2 2 3 5
258..................................... 15710 2.0006 1 1 2 2 3
259..................................... 3717 2.7896 1 1 1 3 6
260..................................... 4780 1.4749 1 1 1 2 2
261..................................... 1730 2.1624 1 1 1 2 4
262..................................... 673 3.8098 1 1 3 5 7
263..................................... 27219 11.5858 3 5 8 14 23
264..................................... 4261 6.9681 2 3 5 8 14
265..................................... 3868 6.6099 1 2 4 8 14
266..................................... 2527 3.3174 1 1 2 4 7
267..................................... 255 5.2353 1 1 3 6 12
268..................................... 896 3.6953 1 1 2 4 8
269..................................... 8856 8.2516 2 3 6 10 16
270..................................... 2734 3.2579 1 1 2 4 7
271..................................... 21090 7.1019 2 4 6 8 13
272..................................... 5465 6.3420 2 3 5 8 12
273..................................... 1341 4.2118 1 2 3 5 8
274..................................... 2368 6.9548 2 3 5 9 14
275..................................... 224 3.3125 1 1 2 4 7
276..................................... 1076 4.6515 1 2 4 6 9
277..................................... 83707 5.7178 2 3 5 7 10
278..................................... 28524 4.3359 2 3 4 5 7
279..................................... 4 4.0000 2 2 4 5 5
280..................................... 15047 4.1980 1 2 3 5 8
281..................................... 6682 3.0805 1 1 3 4 6
283..................................... 5322 4.5569 1 2 3 6 9
284..................................... 1852 3.1960 1 1 2 4 6
285..................................... 6125 10.4263 3 5 8 13 20
286..................................... 1995 6.2000 2 3 5 7 11
287..................................... 5974 10.5387 3 5 8 13 20
288..................................... 2252 5.7234 2 3 4 6 9
289..................................... 4326 3.1248 1 1 2 3 7
290..................................... 8214 2.4329 1 1 2 2 4
291..................................... 57 1.6316 1 1 1 2 2
292..................................... 4945 9.9610 2 4 7 13 21
293..................................... 321 4.9346 1 2 4 7 10
[[Page 26400]]
294..................................... 83924 4.7128 1 2 4 6 9
295..................................... 3464 3.8467 1 2 3 5 7
296..................................... 232274 5.2398 2 3 4 6 10
297..................................... 40842 3.4744 1 2 3 4 6
298..................................... 106 3.1887 1 2 2 4 6
299..................................... 1052 5.5542 1 2 4 6 11
300..................................... 15582 6.1317 2 3 5 8 12
301..................................... 3101 3.7004 1 2 3 5 7
302..................................... 7525 9.4141 4 5 7 11 16
303..................................... 19405 8.4850 4 5 7 10 15
304..................................... 11967 8.8979 2 4 7 11 18
305..................................... 2852 3.8443 1 2 3 5 7
306..................................... 7925 5.4829 1 2 3 7 12
307..................................... 2226 2.2668 1 1 2 3 4
308..................................... 7673 6.3836 1 2 4 8 14
309..................................... 3947 2.4880 1 1 2 3 5
310..................................... 23701 4.3591 1 2 3 5 9
311..................................... 8200 1.8902 1 1 1 2 3
312..................................... 1570 4.5166 1 1 3 6 10
313..................................... 633 2.1153 1 1 1 3 4
314..................................... 2 1.0000 1 1 1 1 1
315..................................... 28524 7.4721 1 1 5 10 17
316..................................... 96405 6.6791 2 3 5 8 13
317..................................... 1230 3.2114 1 1 2 3 6
318..................................... 5544 5.9975 1 3 4 7 12
319..................................... 460 2.8630 1 1 2 4 6
320..................................... 181708 5.3834 2 3 4 7 10
321..................................... 28174 3.8452 1 2 3 5 7
322..................................... 69 4.0580 1 2 3 5 7
323..................................... 16353 3.2183 1 1 2 4 7
324..................................... 7365 1.8789 1 1 1 2 3
325..................................... 7788 3.8947 1 2 3 5 7
326..................................... 2414 2.6582 1 1 2 3 5
327..................................... 7 9.2857 1 1 2 4 13
328..................................... 718 3.9053 1 1 3 5 8
329..................................... 104 2.0481 1 1 1 3 4
331..................................... 43233 5.5300 1 2 4 7 11
332..................................... 4795 3.2715 1 1 2 4 7
333..................................... 296 5.0507 1 2 3 6 10
334..................................... 12132 4.8938 2 3 4 6 8
335..................................... 11393 3.4104 2 3 3 4 5
336..................................... 40525 3.5229 1 2 3 4 7
337..................................... 30540 2.1759 1 1 2 3 3
338..................................... 1641 5.2956 1 2 3 7 12
339..................................... 1503 4.5269 1 1 3 6 10
340..................................... 1 1.0000 1 1 1 1 1
341..................................... 3836 3.2018 1 1 2 3 7
342..................................... 775 3.1174 1 2 2 4 6
344..................................... 3934 2.2567 1 1 1 2 4
345..................................... 1272 3.7673 1 1 2 5 8
346..................................... 4622 5.8090 1 3 4 7 11
347..................................... 396 3.3712 1 1 2 4 7
348..................................... 3105 4.2029 1 2 3 5 8
349..................................... 589 2.6027 1 1 2 3 5
350..................................... 6157 4.3937 2 2 4 5 8
352..................................... 646 3.8498 1 2 3 5 8
353..................................... 2631 6.7081 3 3 5 8 13
354..................................... 8209 5.8725 3 3 4 7 10
355..................................... 5698 3.3243 2 3 3 4 5
356..................................... 25961 2.4179 1 1 2 3 4
357..................................... 5767 8.4947 3 4 7 10 16
358..................................... 21628 4.3926 2 3 3 5 7
359..................................... 29103 2.8141 2 2 3 3 4
360..................................... 16133 2.9634 1 2 2 3 5
361..................................... 420 3.4524 1 1 2 4 7
362..................................... 1 1.0000 1 1 1 1 1
363..................................... 3079 3.4784 1 2 2 3 7
364..................................... 1611 3.5847 1 1 2 5 7
365..................................... 1917 7.3005 2 3 5 9 16
366..................................... 4226 6.7283 1 3 5 8 14
[[Page 26401]]
367..................................... 472 3.1462 1 1 2 4 7
368..................................... 2861 6.7113 2 3 5 8 13
369..................................... 2832 3.1963 1 1 2 4 6
370..................................... 1141 5.7160 3 3 4 5 9
371..................................... 1174 3.6567 2 3 3 4 5
372..................................... 916 3.4509 2 2 2 3 5
373..................................... 3916 2.2829 1 2 2 2 3
374..................................... 125 3.4880 2 2 2 3 5
375..................................... 6 2.6667 2 2 2 3 3
376..................................... 254 3.4803 1 2 2 4 7
377..................................... 53 3.8679 1 1 2 5 8
378..................................... 151 2.3444 1 1 2 3 4
379..................................... 355 3.1127 1 1 2 3 7
380..................................... 74 2.1622 1 1 2 2 4
381..................................... 176 1.9545 1 1 1 2 3
382..................................... 39 1.3077 1 1 1 1 2
383..................................... 1545 3.8913 1 1 3 5 8
384..................................... 123 2.3415 1 1 1 2 4
389..................................... 8 5.8750 3 3 4 8 10
390..................................... 19 3.7368 1 1 3 5 7
392..................................... 2508 9.4769 3 4 7 12 19
393..................................... 1 8.0000 8 8 8 8 8
394..................................... 1724 6.6810 1 2 4 8 15
395..................................... 80464 4.5303 1 2 3 6 9
396..................................... 17 3.7059 1 1 2 5 6
397..................................... 18071 5.2277 1 2 4 7 10
398..................................... 18051 5.9638 2 3 5 7 11
399..................................... 1614 3.5520 1 2 3 4 7
400..................................... 6845 9.0488 1 3 6 12 20
401..................................... 5827 11.1903 2 5 8 14 23
402..................................... 1483 3.9400 1 1 3 5 8
403..................................... 32911 8.0630 2 3 6 10 17
404..................................... 4457 4.2257 1 2 3 6 9
406..................................... 2546 10.2859 3 4 7 13 21
407..................................... 695 4.4086 1 2 4 6 8
408..................................... 2247 7.7036 1 2 5 10 18
409..................................... 3281 5.9113 2 3 4 6 11
410..................................... 40862 3.7202 1 2 3 5 6
411..................................... 13 2.3077 1 1 2 4 4
412..................................... 29 2.7241 1 1 2 3 6
413..................................... 6515 7.2391 2 3 6 9 14
414..................................... 746 4.0804 1 2 3 5 8
415..................................... 39856 14.1713 4 6 11 18 28
416..................................... 195783 7.3483 2 4 6 9 14
417..................................... 32 6.1875 1 2 4 7 13
418..................................... 22097 6.1239 2 3 5 7 11
419..................................... 15859 4.8212 2 2 4 6 9
420..................................... 3091 3.5642 1 2 3 4 6
421..................................... 12242 3.8638 1 2 3 5 7
422..................................... 96 5.2708 1 2 2 5 7
423..................................... 8073 8.1416 2 3 6 10 17
424..................................... 1354 13.3936 2 5 9 16 28
425..................................... 15006 4.0716 1 2 3 5 8
426..................................... 4313 4.5613 1 2 3 6 9
427..................................... 1660 5.0283 1 2 3 6 10
428..................................... 839 7.1025 1 2 4 8 15
429..................................... 30016 6.4824 2 3 5 8 12
430..................................... 58011 8.2066 2 3 6 10 16
431..................................... 295 6.5864 2 3 5 8 13
432..................................... 389 4.7506 1 2 3 5 9
433..................................... 5781 3.0073 1 1 2 4 6
434..................................... 21835 5.0844 1 2 4 6 9
435..................................... 14486 4.2925 1 2 4 5 8
436..................................... 3499 12.8337 4 7 11 17 25
437..................................... 9750 8.9544 3 5 8 11 15
439..................................... 1287 8.1756 1 3 5 10 17
440..................................... 5017 8.8433 2 3 6 10 19
441..................................... 579 3.2383 1 1 2 4 7
442..................................... 15896 8.2292 1 3 6 10 17
443..................................... 3547 3.3941 1 1 2 4 7
[[Page 26402]]
444..................................... 5150 4.2252 1 2 3 5 8
445..................................... 2223 3.0031 1 1 2 4 5
447..................................... 4854 2.5117 1 1 2 3 5
448..................................... 1 4.0000 4 4 4 4 4
449..................................... 26543 3.6722 1 1 3 4 7
450..................................... 6363 2.0525 1 1 1 2 4
451..................................... 1 1.0000 1 1 1 1 1
452..................................... 21656 4.9536 1 2 3 6 10
453..................................... 4464 2.8156 1 1 2 3 5
454..................................... 4930 4.5554 1 2 3 6 9
455..................................... 1070 2.6262 1 1 2 3 5
461..................................... 3357 4.5594 1 1 2 5 11
462..................................... 12630 11.5264 4 6 9 15 21
463..................................... 18895 4.2653 1 2 3 5 8
464..................................... 5455 3.0761 1 1 2 4 6
465..................................... 227 3.3612 1 1 2 3 7
466..................................... 1719 3.8674 1 1 2 4 8
467..................................... 1301 4.0638 1 1 2 4 7
468..................................... 58391 12.9318 3 6 10 17 26
471..................................... 11423 5.7339 3 4 5 6 9
473..................................... 7615 12.8411 2 3 7 19 32
475..................................... 109112 11.1767 2 5 9 15 22
476..................................... 4448 11.6369 2 5 10 15 21
477..................................... 25690 8.1425 1 3 6 10 17
478..................................... 111191 7.3157 1 3 5 9 15
479..................................... 22375 3.6220 1 2 3 5 7
480..................................... 460 19.1848 7 9 14 23 38
481..................................... 229 27.1485 16 19 23 32 43
482..................................... 6119 12.7756 4 7 10 15 24
483..................................... 47190 38.8624 14 21 32 49 70
484..................................... 323 13.3065 2 5 10 18 28
485..................................... 2932 9.3905 4 5 7 11 17
486..................................... 2012 12.1511 1 5 9 16 24
487..................................... 3491 7.5408 1 3 6 10 15
488..................................... 767 16.9465 4 7 12 21 34
489..................................... 14253 8.5597 2 3 6 10 18
490..................................... 5283 5.1333 1 2 4 6 10
491..................................... 11332 3.4896 2 2 3 4 6
492..................................... 2667 16.1234 4 5 9 26 34
493..................................... 54030 5.7170 1 3 5 7 11
494..................................... 27254 2.4838 1 1 2 3 5
495..................................... 145 20.2552 6 8 12 18 33
496..................................... 1270 9.9843 4 5 7 12 18
497..................................... 22593 6.2173 2 3 5 7 11
498..................................... 19133 3.4179 1 2 3 4 6
499..................................... 30738 4.7687 1 2 4 6 9
500..................................... 42090 2.6897 1 1 2 3 5
501..................................... 1943 10.5713 4 5 8 13 20
502..................................... 612 5.9379 2 3 5 7 10
503..................................... 5563 3.9730 1 2 3 5 7
504..................................... 122 30.0984 10 15 25 40 60
505..................................... 153 4.7190 1 1 2 6 12
506..................................... 962 17.6258 4 8 14 24 37
507..................................... 280 9.1857 2 4 7 13 18
508..................................... 637 7.1350 2 3 5 9 15
509..................................... 165 6.1333 1 2 4 8 12
510..................................... 1653 7.8506 2 3 5 9 17
511..................................... 594 4.4646 1 1 3 6 10
----------------
11059625
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 26403]]
Table 8A.--Statewide Average Operating Cost-to-Charge Ratios for Urban
and Rural Hospitals (Case Weighted) March 2000
------------------------------------------------------------------------
State Urban Rural
------------------------------------------------------------------------
ALABAMA............................................. 0.401 0.355
ALASKA.............................................. 0.469 0.722
ARIZONA............................................. 0.373 0.516
ARKANSAS............................................ 0.478 0.454
CALIFORNIA.......................................... 0.344 0.443
COLORADO............................................ 0.427 0.560
CONNECTICUT......................................... 0.495 0.503
DELAWARE............................................ 0.507 0.449
DISTRICT OF COLUMBIA................................ 0.521 ........
FLORIDA............................................. 0.363 0.380
GEORGIA............................................. 0.474 0.486
HAWAII.............................................. 0.409 0.554
IDAHO............................................... 0.549 0.570
ILLINOIS............................................ 0.427 0.515
INDIANA............................................. 0.532 0.543
IOWA................................................ 0.493 0.623
KANSAS.............................................. 0.443 0.656
KENTUCKY............................................ 0.477 0.493
LOUISIANA........................................... 0.406 0.495
MAINE............................................... 0.597 0.554
MARYLAND............................................ 0.759 0.821
MASSACHUSETTS....................................... 0.525 0.537
MICHIGAN............................................ 0.558 0.597
MINNESOTA........................................... 0.510 0.590
MISSISSIPPI......................................... 0.455 0.455
MISSOURI............................................ 0.413 0.506
MONTANA............................................. 0.525 0.570
NEBRASKA............................................ 0.468 0.623
NEVADA.............................................. 0.293 0.483
NEW HAMPSHIRE....................................... 0.543 0.583
NEW JERSEY.......................................... 0.411 ........
NEW MEXICO.......................................... 0.477 0.498
NEW YORK............................................ 0.529 0.610
NORTH CAROLINA...................................... 0.539 0.489
NORTH DAKOTA........................................ 0.622 0.660
OHIO................................................ 0.513 0.578
OKLAHOMA............................................ 0.422 0.509
OREGON.............................................. 0.560 0.581
PENNSYLVANIA........................................ 0.396 0.517
PUERTO RICO......................................... 0.479 0.578
RHODE ISLAND........................................ 0.523 ........
SOUTH CAROLINA...................................... 0.456 0.452
SOUTH DAKOTA........................................ 0.537 0.600
TENNESSEE........................................... 0.441 0.482
TEXAS............................................... 0.406 0.511
UTAH................................................ 0.505 0.627
VERMONT............................................. 0.623 0.590
VIRGINA............................................. 0.467 0.500
WASHINGTON.......................................... 0.577 0.652
WEST VIRGINIA....................................... 0.577 0.530
WISCONSIN........................................... 0.559 0.622
WYOMING............................................. 0.475 0.681
------------------------------------------------------------------------
Table 8B.--Statewide Average Capital Cost-to-Charge Ratios (Case
Weighted) March 2000
------------------------------------------------------------------------
State Ratio
------------------------------------------------------------------------
ALABAMA....................................................... 0.040
ALASKA........................................................ 0.070
ARIZONA....................................................... 0.041
ARKANSAS...................................................... 0.050
CALIFORNIA.................................................... 0.037
COLORADO...................................................... 0.046
CONNECTICUT................................................... 0.036
DELAWARE...................................................... 0.051
DISTRICT OF COLUMBIA.......................................... 0.039
FLORIDA....................................................... 0.045
GEORGIA....................................................... 0.056
HAWAII........................................................ 0.042
IDAHO......................................................... 0.049
ILLINOIS...................................................... 0.042
INDIANA....................................................... 0.057
IOWA.......................................................... 0.056
KANSAS........................................................ 0.054
KENTUCKY...................................................... 0.046
LOUISIANA..................................................... 0.050
MAINE......................................................... 0.039
MARYLAND...................................................... 0.013
MASSACHUSETTS................................................. 0.054
MICHIGAN...................................................... 0.053
MINNESOTA..................................................... 0.049
MISSISSIPPI................................................... 0.045
MISSOURI...................................................... 0.046
MONTANA....................................................... 0.050
NEBRASKA...................................................... 0.054
NEVADA........................................................ 0.030
NEW HAMPSHIRE................................................. 0.063
NEW JERSEY.................................................... 0.037
NEW MEXICO.................................................... 0.044
NEW YORK...................................................... 0.051
NORTH CAROLINA................................................ 0.050
NORTH DAKOTA.................................................. 0.074
OHIO.......................................................... 0.050
OKLAHOMA...................................................... 0.048
OREGON........................................................ 0.048
PENNSYLVANIA.................................................. 0.040
PUERTO RICO................................................... 0.043
RHODE ISLAND.................................................. 0.030
SOUTH CAROLINA................................................ 0.047
SOUTH DAKOTA.................................................. 0.066
TENNESSEE..................................................... 0.051
TEXAS......................................................... 0.048
UTAH.......................................................... 0.049
VERMONT....................................................... 0.051
VIRGINIA...................................................... 0.058
WASHINGTON.................................................... 0.064
WEST VIRGINIA................................................. 0.047
WISCONSIN..................................................... 0.054
WYOMING....................................................... 0.057
------------------------------------------------------------------------
Appendix A--Regulatory Impact Analysis
I. Introduction
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 proposed rule would not have
a significant economic impact on a substantial number of small
entities. For purposes of the RFA, we consider all hospitals to be
small entities.
Also, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis for any proposed rule that 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 603 of the RFA. With the exception of
hospitals located in certain New England counties, for purposes of
section 1102(b) of the Act, we define a small rural hospital as a
hospital with fewer than 100 beds that is located outside of a
Metropolitan Statistical Area (MSA) or New England County
Metropolitan Area (NECMA). Section 601(g) of the Social Security
Amendments of 1983 (Public Law 98-21) designated hospitals in
certain New England counties as belonging to the adjacent NECMA.
Thus, for purposes of the hospital inpatient prospective payment
system, we classify these hospitals as urban hospitals.
It is clear that the changes being proposed in this document
would affect both a substantial number of small rural hospitals as
well as other classes of hospitals, and the effects on some may be
significant. Therefore, the discussion below, in combination with
the rest of this proposed rule, constitutes a combined regulatory
impact analysis and regulatory flexibility analysis.
We have reviewed this proposed rule under the threshold criteria
of Executive Order 13132, Federalism, and have determined that the
proposed rule will not have any negative impact on the rights,
roles, and responsibilities of State, local, or tribal governments.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in an expenditure in any one year
by State, local, or tribal governments, in the aggregate, or by the
private sector, of $100 million. This proposed rule does not mandate
any requirements for State, local, or tribal governments.
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.
II. Objectives
The primary objective of the hospital inpatient prospective
payment system is to create incentives for hospitals to operate
efficiently and minimize unnecessary costs while at the same time
ensuring that payments are sufficient to adequately compensate
hospitals for their legitimate costs. In addition, we share national
goals of preserving the Medicare Trust Fund.
We believe the proposed changes would further each of these
goals while maintaining the financial viability of the hospital
industry and ensuring access to high quality health care for
Medicare beneficiaries. We expect that these proposed changes would
ensure that the outcomes of this payment system are reasonable and
equitable while avoiding or minimizing unintended adverse
consequences.
III. Limitations of Our Analysis
As has been the case in our previously published regulatory
impact analyses, the following quantitative analysis presents the
projected effects of our proposed policy changes, as well as
statutory changes effective for FY 2001, on various hospital groups.
We estimate the effects of individual policy changes by estimating
payments per case while holding all other payment policies constant.
We use the best data available, but we do not attempt to predict
behavioral responses to our policy changes, and we do
[[Page 26404]]
not make adjustments for future changes in such variables as
admissions, lengths of stay, or case-mix. As we have done in
previous proposed rules, we are soliciting comments and information
about the anticipated effects of these changes on hospitals and our
methodology for estimating them.
IV. Hospitals Included In and Excluded From the Prospective Payment
System
The prospective payment systems for hospital inpatient operating
and capital-related costs encompass nearly all general, short-term,
acute care hospitals that participate in the Medicare program. There
were 44 Indian Health Service hospitals in our database, which we
excluded from the analysis due to the special characteristics of the
prospective payment method for these hospitals. Among other short-
term, acute care hospitals, only the 50 such hospitals in Maryland
remain excluded from the prospective payment system under the waiver
at section 1814(b)(3) of the Act. Thus, as of February 2000, we have
included 4,836 hospitals in our analysis. This represents about 80
percent of all Medicare-participating hospitals. The majority of
this impact analysis focuses on this set of hospitals.
The remaining 20 percent are specialty hospitals that are
excluded from the prospective payment system and continue to be paid
on the basis of their reasonable costs (subject to a rate-of-
increase ceiling on their inpatient operating costs per discharge).
These hospitals include psychiatric, rehabilitation, long-term care,
children's, and cancer hospitals. The impacts of our final policy
changes on these hospitals are discussed below.
V. Impact on Excluded Hospitals and Units
As of February 2000, there were 1,081 specialty hospitals
excluded from the prospective payment system and instead paid on a
reasonable cost basis subject to the rate-of-increase ceiling under
Sec. 413.40. Broken down by specialty, there were 549 psychiatric,
194 rehabilitation, 238 long-term care, 73 childrens', 17 Christian
Science Sanatoria, and 10 cancer hospitals. In addition, there were
1,470 psychiatric units and 910 rehabilitation units in hospitals
otherwise subject to the prospective payment system. These excluded
units are also paid in accordance with Sec. 413.40. Under
Sec. 413.40(a)(2)(i)(A), the rate-of-increase ceiling is not
applicable to the 36 specialty hospitals and units in Maryland that
are paid in accordance with the waiver at section 1814(b)(3) of the
Act.
As required by section 1886(b)(3)(B) of the Act, the update
factor applicable to the rate-of-increase limit for excluded
hospitals and units for FY 2001 would be between 0 and 3.1 percent,
depending on the hospital's or unit's costs in relation to its limit
for the most recent cost reporting period for which information is
available.
The impact on excluded hospitals and units of the update in the
rate-of-increase limit depends on the cumulative cost increases
experienced by each excluded hospital or unit since its applicable
base period. For excluded hospitals and units that have maintained
their cost increases at a level below the percentage increases in
the rate-of-increase limits since their base period, the major
effect will be on the level of incentive payments these hospitals
and units receive. Conversely, for excluded hospitals and units with
per-case cost increases above the cumulative update in their rate-
of-increase limits, the major effect will be the amount of excess
costs that would not be reimbursed.
We note that, under Sec. 413.40(d)(3), an excluded hospital or
unit whose costs exceed 110 percent of its rate-of-increase limit
receives its rate-of-increase limit plus 50 percent of the
difference between its reasonable costs and 110 percent of the
limit, not to exceed 110 percent of its limit. In addition, under
the various provisions set forth in Sec. 413.40, certain excluded
hospitals and units can obtain payment adjustments for justifiable
increases in operating costs that exceed the limit. At the same
time, however, by generally limiting payment increases, we continue
to provide an incentive for excluded hospitals and units to restrain
the growth in their spending for patient services.
VI. Graduate Medical Education Impact of National Average Per Resident
Amount (PRA)
As discussed in section IV.G. of the preamble, this proposed
rule would implement statutory provisions enacted by section 311 of
Public Law 106-113 that establish a methodology for the use of a
national average PRA in computing direct graduate medical education
(GME) payments for cost reporting periods beginning on or after
October 1, 2000 and on or before September 30, 2005. The methodology
would establish a ``floor'' and ``ceiling'' based on a locality-
adjusted, updated national average PRA. Under section
1886(h)(2)(D)(iii) of the Act, as added by section 311(a) of Public
Law 106-113, the PRA for a hospital for the cost reporting period
beginning during FY 2001 cannot be below 70 percent of the locality-
adjusted, updated national average PRA. Thus, if a hospital's PRA
for the cost reporting period beginning during FY 2001 would
otherwise be below the floor, the hospital's PRA for that cost
reporting period would be equal to 70 percent of the locality-
adjusted, national average PRA. Under section 1886(h)(2)(D)(iv) of
the Act, as added by section 311(a) of Public Law 106-113, if a
hospital's PRA exceeds 140 percent of the locality-adjusted, updated
national average PRA, the hospital's PRA would be frozen (for FYs
2001 and 2002) or subject to a 2-percent reduction to the otherwise
applicable update (for FYs 2003 through 2005). See section IV.G. of
the preamble for a fuller explanation of this policy.
For purposes of the proposed rule, we have calculated an
estimated impact of this proposed policy on teaching hospitals' PRAs
for FY 2001 making assumptions about update factors and geographic
adjustment factors (GAF) for each hospital. Generally, utilizing FY
1997 data, we calculated a floor and a ceiling and estimated the
impact on hospitals. This impact was then inflated to FY 2001 to
estimate the total impact on the Medicare program for FY 2001. The
estimated numbers for this impact should not be used by hospitals in
calculating their own individual PRAs; hospitals must use the
methodology stated in section IV.G. of this proposed rule to revise
(if appropriate) their individual PRAs.
In calculating this impact, we utilized Medicare cost report
data for all cost reports ending in FY 1997. We excluded hospitals
that file manual cost reports because we did not have access to
their Medicare utilization data. We also excluded all teaching
hospitals in Maryland because these hospitals are paid under a
Medicare waiver. For those hospitals that had two cost reporting
periods ending in FY 1997, we used the later of the two periods. A
total of 1,231 teaching hospitals were included in this analysis.
Utilizing the proposed FY 1997 weighted average PRA of $68,487,
we calculated a FY 1997 70-percent floor of $47,941 and a FY 1997
140-percent ceiling of $95,882. We then estimated that, for cost
reporting periods ending in FY 1997, 339 hospitals had PRAs that
were below $47,941 (27.5 percent of 1,231 hospitals), and 180
hospitals had PRAs above $95,882 (14.6 percent of 1,231 hospitals).
Thus, for example, to illustrate the extremes in impact for a
hospital with PRAs below the floor, Hospital A had a FY 1997 primary
care PRA of $22,000 and a non-primary care PRA of $20,000. When
these PRAs are replaced by a single PRA of $47,941, the hospital
gains over 110 percent in payments per resident. For a hospital with
PRAs above the ceiling, Hospital B had a FY 1997 primary care PRA of
$150,000 and a non-primary care PRA of $148,000. When these PRAs are
frozen and not updated for inflation in FY 2001, the percentage loss
in payments per resident that year would be equal to the CPI-U
percentage that would otherwise have been used to update the PRA.
For the 339 hospitals that had PRAs below the FY 1997 $47,941
floor, we estimated that the total cost to the Medicare program for
FY 2001 of applying the floor would be $33.3 million. For the 180
hospitals that had PRAs above the FY 1997 $95,882 ceiling, we
estimated that the total savings to the Medicare program for FY 2001
would be $18.7 million. Subtracting the estimated savings of $18.7
million from the estimated costs of $33.3 million yields an
estimated total net cost to the Medicare program for FY 2001 of
$14.6 million.
VII. Quantitative Impact Analysis of the Proposed Policy Changes Under
the Prospective Payment System for Operating Costs
A. Basis and Methodology of Estimates
In this proposed rule, we are announcing policy changes and
payment rate updates for the prospective payment systems for
operating and capital-related costs. We estimate the total impact of
these changes for FY 2001 payments compared to FY 2000 payments to
be approximately a $1.3 billion increase. We have prepared separate
impact analyses of the proposed changes to each system. This section
deals with changes to the operating prospective payment system.
The data used in developing the quantitative analyses presented
below are
[[Page 26405]]
taken from the FY 1999 MedPAR file and the most current provider-
specific file that is used for payment purposes. Although the
analyses of the changes to the operating prospective payment system
do not incorporate cost data, the most recently available hospital
cost report data were used to categorize hospitals. Our analysis has
several qualifications. First, we do not make adjustments for
behavioral changes that hospitals may adopt in response to these
proposed policy changes. Second, due to the interdependent nature of
the prospective payment system, it is very difficult to precisely
quantify the impact associated with each proposed change. Third, we
draw upon various sources for the data used to categorize hospitals
in the tables. In some cases, particularly the number of beds, there
is a fair degree of variation in the data from different sources. We
have attempted to construct these variables with the best available
source overall. For individual hospitals, however, some
miscategorizations are possible.
Using cases in the FY 1999 MedPAR file, we simulated payments
under the operating prospective payment system given various
combinations of payment parameters. Any short-term, acute care
hospitals not paid under the general prospective payment systems
(Indian Health Service hospitals and hospitals in Maryland) are
excluded from the simulations. Payments under the capital
prospective payment system, or payments for costs other than
inpatient operating costs, are not analyzed here. Estimated payment
impacts of proposed FY 2001 changes to the capital prospective
payment system are discussed in section IX of this Appendix.
The proposed changes discussed separately below are the
following:
The effects of the annual reclassification of diagnoses
and procedures and the recalibration of the diagnosis-related group
(DRG) relative weights required by section 1886(d)(4)(C) of the Act.
The effects of changes in hospitals' wage index values
reflecting the wage index update (FY 1997 data).
The effects of our proposal to remove from the wage
index the costs and hours associated with teaching physicians paid
under Medicare Part A, residents, and certified registered nurse
anesthetists (CRNAs) during the second year of a 5-year phase-out,
by calculating a wage index based on 40 percent of hospitals'
average hourly wages after removing these costs and hours, and 60
percent of hospitals' average hourly wages with these costs
included.
The effects of geographic reclassifications by the
Medicare Geographic Classification Review Board (MGCRB) that will be
effective in FY 2001.
The total change in payments based on FY 2001 policies
relative to payments based on FY 2000 policies.
To illustrate the impacts of the FY 2001 proposed changes, our
analysis begins with a FY 2000 baseline simulation model using: The
FY 2000 DRG GROUPER (version 17.0); the FY 2000 wage index; and no
MGCRB reclassifications. Outlier payments are set a 5.1 percent of
total DRG plus outlier payments.
Each proposed and statutory policy change is then added
incrementally to this baseline model, finally arriving at an FY 2001
model incorporating all of the changes. This allows us to isolate
the effects of each change.
Our final comparison illustrates the percent change in payments
per case from FY 2000 to FY 2001. Five factors have significant
impacts here. The first is the update to the standardized amounts.
In accordance with section 1886(d)(3)(A)(iv) of the Act, we are
proposing to update the large urban and the other areas average
standardized amounts for FY 2001 using the most recently forecasted
hospital market basket increase for FY 2001 of 3.1 percent minus 1.1
percentage points (for an update of 2.0 percent).
Under section 1886(b)(3) of the Act, as amended by section 406
of Public Law 106-113, the updates to the average standardized
amounts and the hospital-specific amounts for sole community
hospitals (SCHs) will be equal to the full market basket increase
for FY 2001. Consequently, the update factor used for SCHs in this
impact analysis is 3.1 percent. Under section 1886(b)(3)(D) of the
Act, the update factor for the hospital-specific amounts for MDHs is
equal to the market basket increase of 3.1 percent minus 1.1
percentage points (for an update of 2.0 percent).
A second significant factor that impacts changes in hospitals'
payments per case from FY 2000 to FY 2001 is a change in MGCRB
reclassification status from one year to the next. That is,
hospitals reclassified in FY 2000 that are no longer reclassified in
FY 2001 may have a negative payment impact going from FY 2000 to FY
2001; conversely, hospitals not reclassified in FY 2000 that are
reclassified in FY 2001 may have a positive impact. In some cases,
these impacts can be quite substantial, so if a relatively small
number of hospitals in a particular category lose their
reclassification status, the percentage change in payments for the
category may be below the national mean.
A third significant factor is that we currently estimate that
actual outlier payments during FY 2000 will be 6.1 percent of actual
total DRG payments. When the FY 2000 final rule was published, we
projected FY 2000 outlier payments would be 5.1 percent of total DRG
plus outlier payments; the standardized amounts were offset
correspondingly. The effects of the higher than expected outlier
payments during FY 2000 (as discussed in the Addendum to this
proposed rule) are reflected in the analyses below comparing our
current estimates of FY 2000 payments per case to estimated FY 2001
payments per case.
Fourth, section 111 of Public Law 106-113 revised section
1886(d)(5)(B)(ii) of the Act so that the IME adjustment changes from
FY 2000 to FY 2001 from approximately a 6.25-percent increase for
every 100-percent increase in a hospital's resident-to-bed ratio
during FY 2000 to approximately a 6.2-percent increase in FY 2001.
Similarly, section 112 of Public Law 106-113 revised section
1886(d)(5)(F)(ix) of the Act so that the DSH adjustment for FY 2001
is reduced by 3-percent from what would otherwise have been paid
(this is the same percentage reduction that was applied in FY 2000).
Finally, section 405 of Public Law 106-113 provided that certain
SCHs may elect to receive payment on the basis of their costs per
case during their cost reporting period that began during 1996. To
be eligible, a SCH must have received for its cost reporting period
beginning during 1999, payment on the basis of its hospital-specific
rate. For FY 2001, eligible SCHs that elect rebasing receive a
hospital-specific rate comprised of 75-percent of the higher of
their FY 1982 or FY 1987 hospital-specific rate, and 25-percent of
their FY 1996 hospital-specific rate.
Table I demonstrates the results of our analysis. The table
categorizes hospitals by various geographic and special payment
consideration groups to illustrate the varying impacts on different
types of hospitals. The top row of the table shows the overall
impact on the 4,836 hospitals included in the analysis. This number
is 86 fewer hospitals than were included in the impact analysis in
the FY 2000 final rule (64 FR 41624).
The next four rows of Table I contain hospitals categorized
according to their geographic location (all urban, which is further
divided into large urban and other urban, or rural). There are 2,710
hospitals located in urban areas (MSAs or NECMAs) included in our
analysis. Among these, there are 1,545 hospitals located in large
urban areas (populations over 1 million), and 1,165 hospitals in
other urban areas (populations of 1 million or fewer). In addition,
there are 2,126 hospitals in rural areas. The next two groupings are
by bed-size categories, shown separately for urban and rural
hospitals. The final groupings by geographic location are by census
divisions, also shown separately for urban and rural hospitals.
The second part of Table I shows hospital groups based on
hospitals' FY 2001 payment classifications, including any
reclassifications under section 1886(d)(10) of the Act. For example,
the rows labeled urban, large urban, other urban, and rural show
that the number of hospitals paid based on these categorizations
(after consideration of geographic reclassifications) are 2,786,
1,617, 1,169, and 2,050, respectively.
The next three groupings examine the impacts of the proposed
changes on hospitals grouped by whether or not they have residency
programs (teaching hospitals that receive an IME adjustment) or
receive DSH payments, or some combination of these two adjustments.
There are 3,730 nonteaching hospitals in our analysis, 870 teaching
hospitals with fewer than 100 residents, and 236 teaching hospitals
with 100 or more residents.
In the DSH categories, hospitals are grouped according to their
DSH payment status, and whether they are considered urban or rural
after MGCRB reclassifications. Hospitals in the rural DSH
categories, therefore, represent hospitals that were not
reclassified for purposes of the standardized amount or for purposes
of the DSH adjustment. (They may, however, have been reclassified
for purposes of the wage index.) The next category groups hospitals
considered urban after geographic reclassification, in terms of
whether they receive the IME adjustment, the DSH adjustment, both,
or neither.
[[Page 26406]]
The next five rows examine the impacts of the proposed changes
on rural hospitals by special payment groups (SCHs, rural referral
centers (RRCs), and MDHs), as well as rural hospitals not receiving
a special payment designation. The RRCs (150), SCHs (660), MDHs
(352), and SCH and RRCs (58) shown here were not reclassified for
purposes of the standardized amount. There are 20 RRCs, 1 MDH, 5
SCHs and 2 SCH and RRCs that will be reclassified as urban for the
standardized amount in FY 2001 and, therefore, are not included in
these rows.
The next two groupings are based on type of ownership and the
hospital's Medicare utilization expressed as a percent of total
patient days. These data are taken primarily from the FY 1998
Medicare cost report files, if available (otherwise FY 1997 data are
used). Data needed to determine ownership status or Medicare
utilization percentages were unavailable for 34 and 35 hospitals,
respectively. For the most part, these are new hospitals.
The next series of groupings concern the geographic
reclassification status of hospitals. The first three groupings
display hospitals that were reclassified by the MGCRB for both FY
2000 and FY 2001, or for only one of those 2 years, by urban and
rural status. The next rows illustrate the overall number of FY 2001
reclassifications, as well as the numbers of reclassified hospitals
grouped by urban and rural location. The final row in Table I
contains hospitals located in rural counties but deemed to be urban
under section 1886(d)(8)(B) of the Act.
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B. Impact of the Proposed Changes to the DRG Reclassifications and
Recalibration of Relative Weights (Column 1)
In column 1 of Table I, we present the combined effects of the
DRG reclassifications and recalibration, as discussed in section II
of the preamble to this proposed rule. Section 1886(d)(4)(C)(i) of
the Act requires us to annually make appropriate classification
changes and to recalibrate the DRG weights in order to reflect
changes in treatment patterns, technology, and any other factors
that may change the relative use of hospital resources.
We compared aggregate payments using the FY 2000 DRG relative
weights (GROUPER version 17) to aggregate payments using the
proposed FY 2001 DRG relative weights (GROUPER version 18). Overall
payments are unaffected by the DRG reclassification and
recalibration. Consistent with the minor changes we are proposing
for the FY 2001 GROUPER, the redistributional impacts of DRG
reclassifications and recalibration across hospital groups are very
small (a 0.0 percent impact for large and other urban hospitals; a
0.1 percent increase for rural hospitals). Within hospital
categories, the net effects for urban hospitals are small positive
changes for small hospitals (a 0.1 percent increase for hospitals
with fewer than 200 beds), and small decreases for larger hospitals
(a 0.1 percent decrease for hospitals with more than 300 beds).
Among rural hospitals, small hospital categories experience the
largest increases, a 0.2 percent increase for hospitals with fewer
than 50 beds.
The breakdown by urban census division shows that the small
decrease among urban hospitals is confined to the West North Central
and Mountain regions. Payments to urban hospitals in most other
regions are unchanged, while payments to urban hospitals in Puerto
Rico rise by 0.1 percent. All rural hospital census divisions
experience payment increases ranging from 0.1 percent for hospitals
in New England, Middle Atlantic, East North Central, West North
Central, and Mountain regions to 0.2 percent for hospitals in the
South Atlantic, East South Central, West South Central, Pacific, and
Puerto Rico census divisions.
C. Impact of Updating the Wage Data (Column 2)
Section 1886(d)(3)(E) of the Act requires that, beginning
October 1, 1993, we annually update the wage data used to calculate
the wage index. In accordance with this requirement, the proposed
wage index for FY 2001 is based on data submitted for hospital cost
reporting periods beginning on or after October 1, 1996 and before
October 1, 1997. As with the previous column, the impact of the new
data on hospital payments is isolated by holding the other payment
parameters constant in the two simulations. That is, column 2 shows
the percentage changes in payments when going from a model using the
FY 2000 wage index (based on FY 1996 wage data before geographic
reclassifications to a model using the FY 2001 prereclassification
wage index based on FY 1997 wage data). Sections 152 and 154 of
Public Law 106-113 reclassified certain hospitals for purposes of
the wage index standardized amounts. For purposes of this column,
these hospitals are located in their prereclassification geographic
location. The impacts of these statutory reclassifications are shown
in column 5, when examining the impacts of geographic
reclassification.
The wage data collected on the FY 1997 cost reports are similar
to the data used in the calculation of the FY 2000 wage index. For a
thorough discussion of the data used to calculate the wage index,
see section III.B. of this proposed rule.
The results indicate that the new wage data have an overall
impact of a 0.3 percent increase in hospital payments (prior to
applying the budget neutrality factor, see column 5). Rural
hospitals especially appear to benefit from the update. Their
payments increase by 1.4 percent. These increases are attributable
to relatively large increases in the wage index values for the rural
areas of particular States; Hawaii, Louisiana, and Montana all had
increases greater than 6 percent in their prereclassification wage
index values.
Urban hospitals as a group are not significantly affected by the
updated wage data. The gains of hospitals in other urban areas (0.6
percent increase) are offset by decreases among hospitals in large
urban areas (0.3 percent decrease). Urban hospitals in Puerto Rico
experience a 7.0 percent decrease, largely due to declines of 6
percent or more in the prereclassified FY 2001 wage indexes of 2
MSAs. Urban hospitals in the East South Central census region
experience a 6 percent decline due to several MSAs in Tennessee with
prereclassified FY 2001 wage indexes that fall by 6 percent or more.
We note that the wage data used for the proposed wage index are
based upon the data available as of February 22, 2000 and,
therefore, do not reflect revision requests received and processed
by the fiscal intermediaries after that date. To the extent these
requests are granted by hospitals' fiscal intermediaries, these
revisions will be reflected in the final rule. In addition, we
continue to verify the accuracy of the data for hospitals with
extraordinary changes in their data from the prior year.
The largest increases are seen in the rural census divisions.
Rural South Atlantic experiences the greatest positive impact, 1.9
percent. Hospitals in five other census divisions receive positive
impacts over 1.0 percent: West South Central at 1.7, East North
Central at 1.5, East South Central at 1.4, Pacific at 1.4, and West
North Central at 1.3. The following chart compares the shifts in
wage index values for labor market areas for FY 2000 relative to FY
2001. This chart demonstrates the impact of the proposed changes for
the FY 2001 wage index relative to the FY 2000 wage index. The
majority of labor market areas (322) experience less than a 5-
percent change. A total of 39 labor market areas experience an
increase of more than 5 percent with 12 having an increase greater
than 10 percent. A total of 15 areas experience decreases of more
than 5-percent. Of those, 10 decline by 10 percent or more.
------------------------------------------------------------------------
Number of labor market areas
Percentage change in area wage -------------------------------------
index values FY 2000 FY 2001
------------------------------------------------------------------------
Increase more than 10 percent..... 8 12
Increase more than 5 percent and 22 27
less than 10 percent.............
Increase or decrease less than 5 318 322
percent..........................
Decrease more than 5 percent and 17 5
less than 10 percent.............
Decrease more than 10 percent..... 5 10
------------------------------------------------------------------------
Among urban hospitals, 125 would experience an increase of
between 5 and 10 percent and 19 more than 10 percent. A total of 401
rural hospitals have increases greater than 5 percent, but none
greater than 10 percent. On the negative side, 55 urban hospitals
have decreases in their wage index values of at least 5 percent but
less than 10 percent. Twelve urban hospitals have decreases in their
wage index values greater than 10 percent. There are no rural
hospitals with decreases in their wage index values greater than 5
percent or with increases of more than 10 percent. The following
chart shows the projected impact for urban and rural hospitals.
------------------------------------------------------------------------
Number of hospitals
Percentage change in area wage -------------------------------------
index values Urban Rural
------------------------------------------------------------------------
Increase more than 10 percent..... 19 0
Increase more than 5 percent and 125 401
less than 10 percent.............
Increase or decrease less than 5 2,499 1,725
percent..........................
[[Page 26415]]
Decrease more than 5 percent and 55 0
less than 10 percent.............
Decrease more than 10 percent..... 12 0
------------------------------------------------------------------------
D. Impact of 5-Year Phase-Out of Teaching Physicians', Residents',
and CRNAs' Costs (Column 3)
As described in section III.C. of this preamble, the proposed FY
2001 wage index is calculated by blending 60 percent of hospitals'
average hourly wages calculated without removing teaching physician
(paid under Medicare Part A), residents, or CRNA costs (and hours);
and 40 percent of average hourly wages calculated after removing
these costs (and hours). This constitutes the second year of a 5-
year phase-out of these costs and hours, where the proportion of the
calculation based upon average hourly wages after removing these
costs increases by 20 percentage points per year.
In order to determine the impact of moving from the 80/20 blend
percentage to the 60/40 blend percentage, we first estimated the
payments for FY 2001 using the FY 2001 prereclassified wage index
calculated using the 80/20 blend percentage (Column 2). We then
estimated what the payments for FY 2001 would have been if the 60/40
blend percentage was applied to the FY 2001 prereclassified wage
index. Column 3 compares the differences in these payment estimates
and shows that the 60/40 blend percentage does not significantly
impact overall payments (0.0 percent change). Only 53 labor market
areas experience a decrease in their wage index and none decreases
by more than -0.1 percent.
E. Combined Impact of DRG and Wage Index Changes--Including Budget
Neutrality Adjustment (Column 4)
The impact of DRG reclassifications and recalibration on
aggregate payments is required by section 1886(d)(4)(C)(iii) of the
Act to be budget neutral. In addition, section 1886(d)(3)(E) of the
Act specifies that any updates or adjustments to the wage index are
to be budget neutral. As noted in the Addendum to this proposed
rule, we compared simulated aggregate payments using the FY 2000 DRG
relative weights and wage index to simulated aggregate payments
using the proposed FY 2001 DRG relative weights and blended wage
index. Based on this comparison, we computed a wage and
recalibration budget neutrality factor of 0.996506. In Table I, the
combined overall impacts of the effects of both the DRG
reclassifications and recalibration and the updated wage index are
shown in column 4. The 0.0 percent impact for all hospitals
demonstrates that these changes, in combination with the budget
neutrality factor, are budget neutral.
For the most part, the changes in this column are the sum of the
changes in columns 1, 2, and 3, minus approximately 0.3 percent
attributable to the budget neutrality factor. There may be some
variation of plus or minus 0.1 percent due to rounding.
F. Impact of MGCRB Reclassifications (Column 5)
Our impact analysis to this point has assumed hospitals are paid
on the basis of their actual geographic location (with the exception
of ongoing policies that provide that certain hospitals receive
payments on bases other than where they are geographically located,
such as hospitals in rural counties that are deemed urban under
section 1886(d)(8)(B) of the Act). The changes in column 5 reflect
the per case payment impact of moving from this baseline to a
simulation incorporating the MGCRB decisions for FY 2001. As noted
below, these decisions affect hospitals' standardized amount and
wage index area assignments. In addition, until FY 2002, rural
hospitals reclassified for purposes of the standardized amount
qualify to be treated as urban for purposes of the DSH adjustment.
Beginning in 1998, by February 28 of each year, the MGCRB makes
reclassification determinations that will be effective for the next
fiscal year, which begins on October 1. (In previous years, these
determinations were made by March 30.) The MGCRB may approve a
hospital's reclassification request for the purpose of using the
other area's standardized amount, wage index value, or both, or for
FYs 1999 through 2001, for purposes of qualifying for a DSH
adjustment or to receive a higher DSH payment.
The proposed FY 2001 wage index values incorporate all of the
MGCRB's reclassification decisions for FY 2001. The wage index
values also reflect any decisions made by the HCFA Administrator
through the appeals and review process for MGCRB decisions as of
February 29, 2000. Additional changes that result from the
Administrator's review of MGCRB decisions or a request by a hospital
to withdraw its application will be reflected in the final rule for
FY 2001.
Section 152 of Public Law 106-113 reclassified certain hospitals
for purposes of the wage index and the standardized amounts. The
impacts of these statutory reclassifications are included in this
column.
The overall effect of geographic reclassification is required by
section 1886(d)(8)(D) of the Act to be budget neutral. Therefore, we
applied an adjustment of 0.994270 to ensure that the effects of
reclassification are budget neutral. (See section II.A.4.b. of the
Addendum to this proposed rule.)
As a group, rural hospitals benefit from geographic
reclassification. Their payments rise 2.4 percent, while payments to
urban hospitals decline 0.4 percent. Hospitals in other urban areas
see a decrease in payments of 0.3 percent, while large urban
hospitals lose 0.5 percent. Among urban hospital groups (that is,
bed size, census division, and special payment status), payments
generally decline.
A positive impact is evident among most of the rural hospital
groups. The largest decrease among the rural census divisions is 0.6
percent for Puerto Rico. The largest increases are in rural Middle
Atlantic and West South Central. These regions all receive an
increase of 2.8 percent.
Among rural hospitals designated as RRCs, 127 hospitals are
reclassified for purposes of the wage index only, leading to the 5.3
percent increase in payments among RRCs overall. This positive
impact on RRCs is also reflected in the category of rural hospitals
with 150-199 beds, which has a 4.9 percent increase in payments.
Rural hospitals reclassified for FY 2000 and FY 2001 experience
a 5.7 percent increase in payments. This may be due to the fact that
these hospitals have the most to gain from reclassification and have
been reclassified for a period of years. Rural hospitals
reclassified for FY 2001 only experience a 4.6 percent increase in
payments, while rural hospitals reclassified for FY 2000 only
experience a 0.4 percent decrease in payments. Urban hospitals
reclassified for FY 2001 but not FY 2000 experience a 3.3 percent
increase in payments overall. Urban hospitals reclassified for FY
2000 but not for FY 2001 experience a 1.1 percent decline in
payments.
The FY 2001 Reclassification rows of Table I show the changes in
payments per case for all FY 2001 reclassified and nonreclassified
hospitals in urban and rural locations for each of the three
reclassification categories (standardized amount only, wage index
only, or both). The table illustrates that the largest impact for
reclassified rural hospitals is for those hospitals reclassified for
both the standardized amount and the wage index. These hospitals
receive an 8.4 percent increase in payments. In addition, rural
hospitals reclassified just for the wage index receive a 5.4 percent
payment increase. The overall impact on reclassified hospitals is to
increase their payments per case by an average of 5 percent for FY
2001.
The reclassification of hospitals primarily affects payment to
nonreclassified hospitals through changes in the wage index and the
geographic reclassification budget neutrality adjustment required by
section 1886(d)(8)(D) of the Act. Among hospitals that are not
reclassified, the overall impact of hospital reclassifications is an
average decrease in payments per case of about 0.4 percent. Rural
nonreclassified hospitals decrease by 0.4 percent, and urban
nonreclassified hospitals lose 0.6 percent (the amount of the budget
neutrality offset).
The foregoing analysis was based on MGCRB and HCFA Administrator
decisions made by February 29, 2000. As previously noted, there may
be changes to some MGCRB decisions through the appeals, review, and
applicant withdrawal process. The outcome
[[Page 26416]]
of these cases will be reflected in the analysis presented in the
final rule.
G. All Changes (Column 6)
Column 6 compares our estimate of payments per case,
incorporating all changes reflected in this proposed rule for FY
2001 (including statutory changes), to our estimate of payments per
case in FY 2000. It includes the effects of the 2.0 percent update
to the standardized amounts and the hospital-specific rates for MDHs
and the 3.1 percent update for SCHs. It also reflects the 1.0
percentage point difference between the projected outlier payments
in FY 2000 (5.1 percent of total DRG payments) and the current
estimate of the percentage of actual outlier payments in FY 2000
(6.1 percent), as described in the introduction to this Appendix and
the Addendum to this proposed rule.
Another change affecting the difference between FY 2000 and FY
2001 payments arises from section 1886(d)(5)(8) of the Act, as
amended by Public Law 106-113. As noted in the introduction to this
impact analysis, for FY 2001, the IME adjustment is decreased from
last year (6.5 percent in FY 2000 and 6.25 percent in FY 2001).
We also note that column 6 includes the impacts of FY 2001 MGCRB
reclassifications compared to the payment impacts of FY 2000
reclassifications. Therefore, when comparing FY 2001 payments to FY
2000, the percent changes due to FY 2001 reclassifications shown in
column 5 need to be offset by the effects of reclassification on
hospitals' FY 2000 payments (column 7 of Table 1, July 30, 1999
final rule (64 FR 41625)). For example, the impact of MGCRB
reclassifications on rural hospitals' FY 2001 payments was
approximately a 2.4 percent increase, offsetting most of the 2.6
percent increase in column 7 for FY 2000. Therefore, the net change
in FY 2001 payments due to reclassification for rural hospitals is
actually a decrease of 0.2 percent relative to FY 2000. However,
last year's analysis contained a somewhat different set of
hospitals, so this might affect the numbers slightly.
Finally, section 405 of Public Law 106-113 provided that certain
SCHs may elect to receive payment on the basis of their costs per
case during their cost reporting period that began during 1996. To
be eligible, a SCH must have received payment for cost reporting
periods beginning during 1999 on the basis of its hospital-specific
rate. For FY 2001, eligible SCHs that elect rebasing receive a
hospital-specific rate comprised of 75 percent of the higher of
their FY 1982 or FY 1987 hospital-specific rate, and 25 percent of
their 1996 hospital-specific rate. The impact of this provision is
modeled in column 6 as well.
There might also be interactive effects among the various
factors comprising the payment system that we are not able to
isolate. For these reasons, the values in column 6 may not equal the
sum of the changes in columns 4 and 5, plus the other impacts that
we are able to identify.
The overall payment change from FY 2000 to FY 2001 for all
hospitals is a 1.2 percent increase. This reflects the 2.0 percent
update for FY 2001 (3.1 percent for SCHs), the 1.0 percent lower
outlier payments in FY 2001 compared to FY 2000 (5.1 percent
compared to 6.1 percent); the change in the IME adjustment (6.5 in
FY 2000 to 6.2 in FY 2001); and the rebasing of certain SCHs to
their 1996 hospital-specific rate.
Hospitals in urban areas experience a 0.9 percent increase in
payments per case compared to FY 2000. The 0.4 percent negative
impact due to reclassification is offset by an identical negative
impact for FY 2000. Hospitals in rural areas, meanwhile, experience
a 2.8 percent payment increase. As discussed previously, this is
primarily due to the positive effect of the wage index and DRG
changes (1.2 percent increase).
Among urban census divisions, other than the Middle Atlantic and
East South Central regions (which experience no change and a 0.2
percent increase in payments, respectively), payments increased
between 0.9 and 1.6 percent between FY 2000 and FY 2001. The rural
census division experiencing the smallest increase in payments was
Puerto Rico (0.1 percent). The largest increases by rural hospitals
are in the Mountain and West North Central regions, both with 3.1
percent. Among other rural census divisions, the largest increases
are in the South Atlantic and the East North Central, both with 3.0.
Among special categories of rural hospitals, those hospitals
receiving payment under the hospital-specific methodology (SCHs,
MDHs, and SCH/RRCs) experience payment increases of 3.5 percent, 3.1
percent, and 2.1 percent, respectively. This outcome is primarily
related to the fact that, for hospitals receiving payments under the
hospital-specific methodology, there are no outlier payments.
Therefore, these hospitals do not experience negative payment
impacts from the decline in outlier payments from FY 2000 to FY 2001
(from 6.1 of total DRG plus outlier payments to 5.1 percent) as do
hospitals paid based on the national standardized amounts.
The largest negative payment impacts from FY 2000 to FY 2001 are
among hospitals that were reclassified for FY 2000 and are not
reclassified for FY 2001. Overall, these hospitals lose 2.8 percent.
The urban hospitals in this category lose 2.7 percent, while the
rural hospitals lose 2.9 percent. On the other hand, hospitals
reclassified for FY 2001 that were not reclassified for FY 2000
would experience the greatest payment increases: 6.1 percent
overall; 8.5 percent for 119 rural hospitals in this category and
4.2 percent for 41 urban hospitals.
Table II.--Impact Analysis of Changes for FY 2000 Operating Prospective Payment System
[Payments per case]
----------------------------------------------------------------------------------------------------------------
Average FY Average FY
(BY GEOGRAPHIC LOCATION) Number of 2000 payment 2001 payment All changes
hospitals per case per case
(1) (2) \1\ (3) \1\ (4)
----------------------------------------------------------------------------------------------------------------
ALL HOSPITALS 4,836 $6,816 $6,895 1.2
URBAN HOSPITALS............................. 2,710 7,391 7,457 0.9
LARGE URBAN AREAS........................... 1,545 7,927 7,973 0.6
OTHER URBAN AREAS........................... 1,165 6,694 6,786 1.4
RURAL HOSPITALS................................. 2,126 4,565 4,695 2.8
BED SIZE (URBAN):
0-99 BEDS................................... 687 4,970 5,041 1.4
100-199 BEDS................................ 928 6,235 6,300 1.0
200-299 BEDS................................ 543 7,022 7,076 0.8
300-499 BEDS................................ 410 7,884 7,943 0.8
500 OR MORE BEDS............................ 142 9,762 9,859 1.0
BED SIZE (RURAL):
0-49 BEDS................................... 1,208 3,787 3,925 3.6
50-99 BEDS.................................. 549 4,273 4,402 3.0
100-149 BEDS................................ 217 4,671 4,789 2.5
150-199 BEDS................................ 85 5,112 5,251 2.7
200 OR MORE BEDS............................ 67 5,719 5,847 2.2
URBAN BY CENSUS DIVISION:
NEW ENGLAND................................. 146 7,843 7,939 1.2
MIDDLE ATLANTIC............................. 412 8,311 8,314 0.0
[[Page 26417]]
SOUTH ATLANTIC.............................. 400 7,045 7,120 1.1
EAST NORTH CENTRAL.......................... 457 7,113 7,187 1.0
EAST SOUTH CENTRAL.......................... 156 6,648 6,660 0.2
WEST NORTH CENTRAL.......................... 185 7,128 7,235 1.5
WEST SOUTH CENTRAL.......................... 343 6,788 6,898 1.6
MOUNTAIN.................................... 132 7,047 7,138 1.3
PACIFIC..................................... 434 8,591 8,678 1.0
PUERTO RICO................................. 45 3,169 3,198 0.9
RURAL BY CENSUS DIVISION:
NEW ENGLAND................................. 52 5,462 5,604 2.6
MIDDLE ATLANTIC............................. 79 4,927 5,056 2.6
SOUTH ATLANTIC.............................. 276 4,698 4,840 3.0
EAST NORTH CENTRAL.......................... 280 4,615 4,751 3.0
EAST SOUTH CENTRAL.......................... 265 4,231 4,331 2.4
WEST NORTH CENTRAL.......................... 491 4,380 4,517 3.1
WEST SOUTH CENTRAL.......................... 337 4,062 4,170 2.7
MOUNTAIN.................................... 201 4,895 5,046 3.1
PACIFIC..................................... 140 5,612 5,769 2.8
PUERTO RICO................................. 5 2,455 2,457 0.1
-------------------------------------------------
(BY PAYMENT CATEGORIES)
-------------------------------------------------
URBAN HOSPITALS: 2,786 7,352 7,419 0.9
LARGE URBAN................................. 1,617 7,852 7,898 0.6
OTHER URBAN................................. 1,169 6,681 6,776 1.4
RURAL HOSPITALS............................. 2,050 4,538 4,665 2.8
TEACHING STATUS:
NON-TEACHING................................ 3,730 5,502 5,578 1.4
FEWER THAN 100 RESIDENTS.................... 870 7,175 7,256 1.1
100 OR MORE RESIDENTS....................... 236 10,914 11,001 0.8
DISPROPORTIONATE SHARE HOSPITALS (DSH):
NON-DSH..................................... 3,025 5,850 5,915 1.1
URBAN DSH:
100 BEDS OR MORE............................ 1,377 7,959 8,047 1.1
FEWER THAN 100 BEDS......................... 76 4,966 5,045 1.6
RURAL DSH:
SOLE COMMUNITY (SCH)........................ 153 4,198 4,397 4.7
REFERRAL CENTERS (RRC)...................... 54 5,384 5,465 1.5
OTHER RURAL DSH HOSPITALS:
100 BEDS OR MORE............................ 48 4,141 4,249 2.6
FEWER THAN 100 BEDS......................... 103 3,706 3,844 3.7
URBAN TEACHING AND DSH:
BOTH TEACHING AND DSH....................... 716 8,864 8,962 1.1
TEACHING AND NO DSH......................... 325 7,372 7,413 0.6
NO TEACHING AND DSH......................... 737 6,362 6,432 1.1
NO TEACHING AND NO DSH...................... 1,008 5,711 5,744 0.6
RURAL HOSPITAL TYPES:
NONSPECIAL STATUS HOSPITALS................. 830 3,968 4,092 3.1
RRC......................................... 150 5,269 5,380 2.1
SCH......................................... 660 4,534 4,692 3.5
MDH......................................... 352 3,786 3,903 3.1
SCH AND RRC................................. 58 5,533 5,651 2.1
TYPE OF OWNERSHIP:
VOLUNTARY................................... 2,820 6,987 7,062 1.1
PROPRIETARY................................. 768 6,276 6,335 0.9
GOVERNMENT.................................. 1,214 6,307 6,427 1.9
UNKNOWN..................................... 34 11,179 11,236 0.5
MEDICARE UTILIZATION AS A PERCENT OF INPATIENT
DAYS:
0-25........................................ 379 9,010 9,136 1.4
25-50....................................... 1,830 7,891 7,972 1.0
50-65....................................... 1,893 5,958 6,036 1.3
OVER 65..................................... 699 5,297 5,358 1.2
UNKNOWN..................................... 35 11,178 11,236 0.5
HOSPITALS RECLASSIFIED BY THE MEDICARE
GEOGRAPHIC REVIEW BOARD:
RECLASSIFICATION STATUS DURING FY 2000 AND FY
2001:
RECLASSIFIED DURING BOTH FY 2000 AND FY 2001 381 5,848 5,921 1.2
URBAN....................................... 52 8,046 8,033 -0.2
RURAL....................................... 329 5,272 5,367 1.8
[[Page 26418]]
RECLASSIFIED DURING FY 2001 ONLY............ 160 5,900 6,259 6.1
URBAN....................................... 41 7,600 7,917 4.2
RURAL....................................... 119 4,604 4,994 8.5
RECLASSIFIED DURING FY 2000 ONLY............ 118 5,940 5,774 -2.8
URBAN....................................... 31 7,428 7,226 -2.7
RURAL....................................... 87 4,584 4,449 -2.9
FY 2000 RECLASSIFICATIONS:
ALL RECLASSIFIED HOSPITALS.................. 541 5,861 6,005 2.4
STANDARDIZED AMOUNT ONLY.................... 66 4,864 4,892 0.6
WAGE INDEX ONLY............................. 386 5,889 5,930 0.7
BOTH........................................ 46 6,494 6,424 -1.1
NONRECLASSIFIED............................. 4,312 6,944 7,030 1.2
ALL URBAN RECLASSIFIED...................... 93 7,865 7,986 1.5
STANDARDIZED AMOUNT ONLY.................... 16 5,230 5,246 0.3
WAGE INDEX ONLY............................. 59 8,321 8,508 2.2
BOTH........................................ 18 8,036 7,962 -0.9
NONRECLASSIFIED............................. 2,592 7,384 7,447 0.9
ALL RURAL RECLASSIFIED...................... 448 5,145 5,296 2.9
STANDARDIZED AMOUNT ONLY.................... 53 4,728 4,856 2.7
WAGE INDEX ONLY............................. 372 5,177 5,327 2.9
BOTH........................................ 23 5,267 5,460 3.7
NONRECLASSIFIED............................. 1,677 4,121 4,234 2.7
OTHER RECLASSIFIED HOSPITALS (SECTION 26 4,765 4,808 0.9
1886(d)(8)(B)).............................
----------------------------------------------------------------------------------------------------------------
\1\ These payment amounts per case do not reflect any estimates of annual case-mix increase.
Table II presents the projected impact of the proposed changes
for FY 2001 for urban and rural hospitals and for the different
categories of hospitals shown in Table I. It compares the estimated
payments per case for FY 2000 with the average estimated per case
payments for FY 2001, as calculated under our models. Thus, this
table presents, in terms of the average dollar amounts paid per
discharge, the combined effects of the changes presented in Table I.
The percentage changes shown in the last column of Table II equal
the percentage changes in average payments from column 6 of Table I.
VIII. Impact of Organ, Tissue and Eye Procurement Condition of
Participation on CAHs
In this proposed rule, we propose to add a CoP for organ, tissue
and eye procurement for CAHs. We do not anticipate that this
condition would have a substantial economic impact on CAHs. However,
we believe it is desirable to inform the public of our projections
of its likely effects. There are several provisions in this proposed
condition that would impact CAHs to a greater or lesser degree.
Specifically, CAHs would be required to have written protocols; have
agreements with an OPO, a tissue bank, and an eye bank; refer all
deaths that occur in the CAH to the OPO or a third party designated
by the OPO; ensure that CAH employees who initiate a request for
donation to the family of a potential donor have been trained as a
designated requestor; and work cooperatively with the OPO, tissue
bank, and eye bank in educating CAH staff, reviewing death records,
and maintaining potential donors. It is important to note that
because of the inherent flexibility of this condition, the extent of
its economic impact is dependent upon decisions that will be made
either by the CAH or by the CAH in conjunction with the OPO or the
tissue and eye banks. Thus, the impact on individual CAHs will vary
and is subject in large part to their decision making. The impact
will also vary based on whether a CAH currently has an organ
donation protocol and its level of compliance with existing law and
regulations. For example, if a CAH was a Medicare hospital in
compliance with the hospital CoP for organ, tissue, and eye
procurement prior to converting to a CAH, there will be no
additional impact.
The first requirement in the proposed CoP is that CAHs have and
implement written protocols that reflect the various other
requirements of the proposed CoP. Currently, under section 1138 of
the Act, CAHs must have written protocols for organ donation. Most
CAHs will need to rewrite their existing protocols to conform with
this regulation; however, this is clearly not a requirement that
imposes a significant economic burden.
In addition, a CAH must have an agreement with its designated
OPO and with at least one tissue bank and at least one eye bank.
CAHs are required under section 1138 of the Act to refer all
potential donors to an OPO. Also, the OPO regulation at 42 CFR
486.306 requires, as a qualification for designation as an OPO, that
the OPO have a working relationship with at least 75 percent of the
hospitals in its service area that participate in the Medicare and
Medicaid programs and that have an operating room and the equipment
and personnel for retrieving organs. Therefore, some CAHs may
already have an agreement with their designated OPO. Although CAHs
may need to modify those existing agreements, the need to make
modifications would not impose a significant economic burden.
Although there is no statutory or regulatory requirement for a CAH
to have agreements with tissue and eye banks, we must assume some
CAHs have agreements with tissue and eye banks, since hospitals are
the source for virtually all tissues and eyes.
The CoP would require CAHs to notify the OPO about every death
that occurs in the CAH. The average Medicare hospital has
approximately 165 beds and 200 deaths per year. However, by statute
and regulation, CAHs may use no more than 15 beds for acute care
services. Assuming that the number of deaths in a hospital is
related to the number of acute care beds, there should be
approximately 18 deaths per year in the average CAH. Thus, the
economic impact for a CAH of referring all deaths would be small.
Under the proposed CoP, a CAH may agree to have the OPO
determine medical suitability for tissue and eye donation or may
have alternative arrangements with a tissue bank and an eye bank.
These alternative arrangements could include the CAH's direct
notification of the tissue and eye bank of potential tissue and eye
donors or direct notification of all deaths. Again, the impact is
small, and the regulation permits the CAH to decide how this process
will take place. We recognize that many communities already have a
one-phone-call system in place. In addition, some OPOs are also
tissue banks or eye banks or both. A CAH that chose to use the OPO's
tissue and eye bank services in these localities would need to make
only one telephone call on every death.
This proposed CoP requires that the individual who initiates a
request for
[[Page 26419]]
donation to the family of a potential donor must be an OPO
representative or a designated requestor. A designated requestor is
an individual who has taken a course offered or approved by the OPO
in the methodology for approaching families of potential donors and
requesting donation. The CAH would need to arrange for designated
requestor training. Most OPOs have trained designated requestors as
part of the hospital CoP for organ, tissue, and eye procurement.
Even if the CAH wants to have a sufficient number of designated
requestors to ensure that all shifts are covered, this provision of
the regulation would not have a significant economic impact on CAHs.
In addition, the CAH may be able to choose to have donation requests
initiated by the OPO, the tissue bank, or the eye bank staff rather
than CAH staff, in which case there is no economic impact.
The regulation requires a CAH to work cooperatively with the
OPO, a tissue bank, and an eye bank in educating CAH staff. We do
not believe education of CAH staff will demand a significant amount
of staff time. In addition, most OPOs already give educational
presentations for the staff in their hospitals.
The regulation requires a CAH to work cooperatively with the
OPO, a tissue bank, and an eye bank in reviewing death records. Most
OPOs currently conduct extensive CAH death record reviews. The CAH's
assistance is required only to provide lists of CAH deaths and
facilitate access to records.
Finally, the regulation requires a CAH to work cooperatively
with the OPO, a tissue bank, and an eye bank in maintaining
potential donors while necessary testing and placement of potential
donated organs and tissues take place. It is possible that because
of the proposed CoP, some CAHs may have their first organ donors.
Therefore, we considered the impact on a CAH of maintaining a brain
dead potential donor on a ventilator until the organs can be placed.
CAHs with full ventilator capability should have no trouble
maintaining a potential donor until the organs are placed. However,
some CAHs have ventilator capability only so that a patient can be
maintained until he or she is transferred to a larger facility for
treatment. These CAHs would have the equipment and staffing to
maintain a potential donor until transfer to another facility
occurs. Some CAHs do not have ventilator capability and would be
unable to maintain a potential donor. However, CAHs without
ventilator capability would still be obligated to notify the OPO, or
a third party designated by the OPO, of all individuals whose death
is imminent or who have died in the CAH because there is a potential
to obtain a tissue or an eye donation. We do not believe there will
be a significant impact on CAHs no matter what their situation--full
ventilator capability, ventilator capability only for patients who
are to be transferred to a larger facility, or no ventilator
capability.
We are sensitive to the possible burden this proposed CoP may
place on CAHs. Therefore, we are particularly interested in comments
and information concerning the previously mentioned requirements.
IX. Impact of Proposed Changes in the Capital Prospective Payment
System
A. General Considerations
We now have cost report data for the 7th year of the capital
prospective payment system (cost reports beginning in FY 1998)
available through the December 1999 update of the HCRIS. We also
have updated information on the projected aggregate amount of
obligated capital approved by the fiscal intermediaries. However,
our impact analysis of payment changes for capital-related costs is
still limited by the lack of hospital-specific data on several
items. These are the hospital's projected new capital costs for each
year, its projected old capital costs for each year, and the actual
amounts of obligated capital that will be put in use for patient
care and recognized as Medicare old capital costs in each year. The
lack of this information affects our impact analysis in the
following ways:
Major investment in hospital capital assets (for
example, in building and major fixed equipment) occurs at irregular
intervals. As a result, there can be significant variation in the
growth rates of Medicare capital-related costs per case among
hospitals. We do not have the necessary hospital-specific budget
data to project the hospital capital growth rate for individual
hospitals.
Our policy of recognizing certain obligated capital as
old capital makes it difficult to project future capital-related
costs for individual hospitals. Under Sec. 412.302(c), a hospital is
required to notify its intermediary that it has obligated capital by
the later of October 1, 1992, or 90 days after the beginning of the
hospital's first cost reporting period under the capital prospective
payment system. The intermediary must then notify the hospital of
its determination whether the criteria for recognition of obligated
capital have been met by the later of the end of the hospital's
first cost reporting period subject to the capital prospective
payment system or 9 months after the receipt of the hospital's
notification. The amount that is recognized as old capital is
limited to the lesser of the actual allowable costs when the asset
is put in use for patient care or the estimated costs of the capital
expenditure at the time it was obligated. We have substantial
information regarding fiscal intermediary determinations of
projected aggregate obligated capital amounts. However, we still do
not know when these projects will actually be put into use for
patient care, the actual amount that will be recognized as obligated
capital when the project is put into use, or the Medicare share of
the recognized costs. Therefore, we do not know actual obligated
capital commitments for purposes of the FY 2001 capital cost
projections. In Appendix B of this proposed rule, we discuss the
assumptions and computations that we employ to generate the amount
of obligated capital commitments for use in the FY 2001 capital cost
projections.
In Table III of this section, we present the redistributive
effects that are expected to occur between ``hold-harmless''
hospitals and ``fully prospective'' hospitals in FY 2001. In
addition, we have integrated sufficient hospital-specific
information into our actuarial model to project the impact of the
proposed FY 2001 capital payment policies by the standard
prospective payment system hospital groupings. While we now have
actual information on the effects of the transition payment
methodology and interim payments under the capital prospective
payment system and cost report data for most hospitals, we still
need to randomly generate numbers for the change in old capital
costs, new capital costs for each year, and obligated amounts that
will be put in use for patient care services and recognized as old
capital each year. We continue to be unable to predict accurately FY
2001 capital costs for individual hospitals, but with the most
recent data on hospitals' experience under the capital prospective
payment system, there is adequate information to estimate the
aggregate impact on most hospital groupings.
B. Projected Impact Based on the Proposed FY 2001 Actuarial Model
1. Assumptions
In this impact analysis, we model dynamically the impact of the
capital prospective payment system from FY 2000 to FY 2001 using a
capital cost model. The FY 2001 model, as described in Appendix B of
this proposed rule, integrates actual data from individual hospitals
with randomly generated capital cost amounts. We have capital cost
data from cost reports beginning in FY 1989 through FY 1998 as
reported on the December 1999 update of HCRIS, interim payment data
for hospitals already receiving capital prospective payments through
PRICER, and data reported by the intermediaries that include the
hospital-specific rate determinations that have been made through
January 1, 2000 in the provider-specific file. We used these data to
determine the proposed FY 2001 capital rates. However, we do not
have individual hospital data on old capital changes, new capital
formation, and actual obligated capital costs. We have data on costs
for capital in use in FY 1998, and we age that capital by a formula
described in Appendix B. Therefore, we need to randomly generate
only new capital acquisitions for any year after FY 1998. All
Federal rate payment parameters are assigned to the applicable
hospital.
For purposes of this impact analysis, the proposed FY 2001
actuarial model includes the following assumptions:
Medicare inpatient capital costs per discharge will
change at the following rates during these periods:
Average Percentage Change in Capital Costs per Discharge
------------------------------------------------------------------------
Percentage
Fiscal year change
------------------------------------------------------------------------
1999....................................................... 3.16
2000....................................................... 2.34
2001....................................................... 1.99
------------------------------------------------------------------------
We estimate that the Medicare case-mix index will
increase by 0.5 percent in FY 2000 and in FY 2001.
[[Page 26420]]
The Federal capital rate and the hospital-specific rate
were updated in FY 1996 by an analytical framework that considers
changes in the prices associated with capital-related costs and
adjustments to account for forecast error, changes in the case-mix
index, allowable changes in intensity, and other factors. The
proposed FY 2001 update is 0.9 percent (see section IV. of the
Addendum to this proposed rule).
2. Results
We have used the actuarial model to estimate the change in
payment for capital-related costs from FY 2000 to FY 2001. Table III
shows the effect of the capital prospective payment system on low
capital cost hospitals and high capital cost hospitals. We consider
a hospital to be a low capital cost hospital if, based on a
comparison of its initial hospital-specific rate and the applicable
Federal rate, it will be paid under the fully prospective payment
methodology. A high capital cost hospital is a hospital that, based
on its initial hospital-specific rate and the applicable Federal
rate, will be paid under the hold-harmless payment methodology.
Based on our actuarial model, the breakdown of hospitals is as
follows:
Capital Transition Payment Methodology for FY 2001
----------------------------------------------------------------------------------------------------------------
Percent of
Type of hospital Percent of Percent of Percent of capital
hospitals discharges capital costs payments
----------------------------------------------------------------------------------------------------------------
Low Cost Hospital............................... 67 62 56 61
High Cost Hospital.............................. 33 38 44 39
----------------------------------------------------------------------------------------------------------------
A low capital cost hospital may request to have its hospital-
specific rate redetermined based on old capital costs in the current
year, through the later of the hospital's cost reporting period
beginning in FY 1994 or the first cost reporting period beginning
after obligated capital comes into use (within the limits
established in Sec. 412.302(e) for putting obligated capital into
use for patient care). If the redetermined hospital-specific rate is
greater than the adjusted Federal rate, these hospitals will be paid
under the hold-harmless payment methodology. Regardless of whether
the hospital became a hold-harmless payment hospital as a result of
a redetermination, we continue to show these hospitals as low
capital cost hospitals in Table III.
Assuming no behavioral changes in capital expenditures, Table
III displays the percentage change in payments from FY 2000 to FY
2001 using the above described actuarial model. With the proposed
Federal rate, we estimate aggregate Medicare capital payments will
increase by 5.89 percent in FY 2001. This increase is noticeably
higher than last year's (3.34 percent) due to the combination of the
increase in the number of hospital admissions, the increase in case-
mix, and the increase in the Federal blend percentage from 90
percent to 100 percent and a decrease in the hospital-specific rate
percentage from 10 percent to 0 percent for fully prospective
payment hospitals.
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We project that low capital cost hospitals paid under the fully
prospective payment methodology will experience an average increase
in payments per case of 6.67 percent, and high capital cost
hospitals will experience an average increase of 1.07 percent. These
results are due to the change in the blended percentages to the
payment system to 100 percent adjusted Federal rate and 0 percent
hospital-specific rate.
For hospitals paid under the fully prospective payment
methodology, the Federal rate payment percentage will increase from
90 percent to 100 percent and the hospital-specific rate payment
percentage will decrease from 10 to 0 percent in FY 2001. The
Federal rate payment percentage for hospitals paid under the hold-
harmless payment methodology is based on the hospital's ratio of new
capital costs to total capital costs. The average Federal rate
payment percentage for high cost hospitals receiving a hold-harmless
payment for old capital will increase from 74.15 percent to 81.77
percent. We estimate the percentage of hold-harmless hospitals paid
based on 100
[[Page 26421]]
percent of the Federal rate will increase from 87.78 percent to
88.92 percent. We estimate that the few remaining high cost hold-
harmless hospitals (176) will experience an increase in payments of
1.14 percent from FY 2000 to FY 2001. This increase reflects our
estimate that exception payments per discharge will increase 70.81
percent from FY 2000 to FY 2001 for high cost hold-harmless
hospitals. While we estimate that this group's regular hold-harmless
payments for old capital will decline by 26.87 percent due to the
retirement of old capital, we estimate that its high overall capital
costs will cause an increase in these hospitals' exceptions payments
from $56.83 per discharge in FY 2000 to $97.07 per discharge in FY
2001. This is primarily due to the estimated decrease in outlier
payments, which will cause an estimated increase in exceptions
payments to cover unmet capital costs.
We expect that the average hospital-specific rate payment per
discharge will decrease from $32.44 in FY 2000 to $0.00 in FY 2001.
This decrease is due to the decrease in the hospital-specific rate
payment percentage from 10 percent in FY 2000 to 0 percent in FY
2001 for fully prospective payment hospitals.
We are proposing no changes in our exceptions policies for FY
2001. As a result, the minimum payment levels would be--
90 percent for sole community hospitals;
80 percent for urban hospitals with 100 or more beds
and a disproportionate share patient percentage of 20.2 percent or
more; or
70 percent for all other hospitals.
We estimate that exceptions payments will increase from 1.62
percent of total capital payments in FY 2000 to 2.02 percent of
payments in FY 2001. The projected distribution of the exception
payments is shown in the chart below:
Estimated FY 2001 Exceptions Payments
------------------------------------------------------------------------
Percent of
Type of hospital Number of exceptions
hospitals payments
------------------------------------------------------------------------
Low Capital Cost........................ 186 46
High Capital Cost....................... 191 54
-------------------------------
Total............................... 377 100
------------------------------------------------------------------------
C. Cross-Sectional Comparison of Capital Prospective Payment
Methodologies
Table IV presents a cross-sectional summary of hospital
groupings by capital prospective payment methodology. This
distribution is generated by our actuarial model.
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BILLING CODE 4120-01-C
As we explain in Appendix B of this proposed rule, we were not
able to use 61 of the 4,836 hospitals in our database due to
insufficient (missing or unusable) data. Consequently, the payment
methodology distribution is based on 4,775 hospitals. These data
should be fully representative of the payment methodologies that
will be applicable to hospitals.
The cross-sectional distribution of hospital by payment
methodology is presented by: (1) Geographic location; (2) region;
and (3) payment classification. This provides an indication of the
percentage of hospitals within a particular hospital grouping that
will be paid under the fully prospective payment methodology and the
hold-harmless payment methodology.
The percentage of hospitals paid fully Federal (100 percent of
the Federal rate) as hold-harmless hospitals is expected to increase
to 32.9 percent in FY 2001.
Table IV indicates that 63.1 percent of hospitals will be paid
under the fully prospective payment methodology. (This figure,
unlike the figure of 67 percent for low cost capital hospitals in
the chart on ``Capital Transition Payment Methodology for FY 2001,''
in section VII.B.2. of this impact analysis takes into account the
effects of redeterminations. In other words, this figure does not
include low cost hospitals that, following a hospital-specific rate
redetermination, are now paid under the hold-harmless methodology.)
As expected, a relatively higher percentage of rural and
governmental hospitals (74.0 percent and 76.7 percent, respectively
by payment classification) are being paid under the fully
prospective payment methodology. This is a reflection of their lower
than average capital costs per case. In contrast, only 35.3 percent
of proprietary hospitals are being paid under the fully prospective
methodology. This is a reflection of their higher than average
capital costs per case. (We found at the time of the August 30, 1991
final rule (56 FR 43430) that 62.7 percent of proprietary hospitals
had a capital cost per case above the national average cost per
case.)
D. Cross-Sectional Analysis of Changes in Aggregate Payments
We used our FY 2001 actuarial model to estimate the potential
impact of our proposed changes for FY 2001 on total capital payments
per case, using a universe of 4,775 hospitals. The individual
hospital payment parameters are taken from the best available data,
including: the January 1, 2000 update to the provider-specific file,
cost report data, and audit information supplied by intermediaries.
In Table V we present the results of the cross-sectional analysis
using the results of our actuarial model and the aggregate impact of
the proposed FY 2001 payment policies. Columns 3 and 4 show
estimates of payments per case under our model for FY 2000 and FY
2001. Column 5 shows the total percentage change in payments from FY
2000 to FY 2001. Column 6 presents the percentage change in payments
that can be attributed to Federal rate changes alone.
Federal rate changes represented in Column 6 include the 1.60
percent increase in the Federal rate, a 0.5 percent increase in case
mix, changes in the adjustments to the Federal rate (for example,
the effect of the new hospital wage index on the geographic
adjustment factor), and reclassifications by the MGCRB. Column 5
includes the effects of the Federal rate changes represented in
Column 6. Column 5 also reflects the effects of all other changes,
including the change from 90 percent to 100 percent in the portion
of the Federal rate for fully prospective hospitals, the hospital-
specific rate update, changes in the proportion of new to total
capital for hold-harmless hospitals, changes in old capital (for
example, obligated capital put in use), hospital-specific rate
redeterminations, and exceptions. The comparisons are provided by:
(1) Geographic location, (2) region, and (3) payment classification.
The simulation results show that, on average, capital payments
per case can be expected to increase 4.2 percent in FY 2001. The
results show that the effect of the Federal rate change alone is to
increase payments by 0.9 percent. In addition to the increase
attributable to the Federal rate change, a 3.3 percent increase is
attributable to the effects of all other changes.
Our comparison by geographic location shows an overall increase
in payments to hospitals in all areas. This comparison also shows
that urban and rural hospitals will experience slightly different
rates of increase in capital payments per case (3.9 percent and 5.9
percent, respectively). This difference is due to the lower rate of
increase for urban hospitals relative to rural hospitals (0.6
percent and 2.7 percent, respectively) from the Federal rate changes
alone. Urban hospitals will gain approximately the same as rural
hospitals (3.3 percent versus 3.2 percent, respectively) from the
effects of all other changes.
[[Page 26424]]
All regions are estimated to receive increases in total capital
payments per case, partly due to the increased share of payments
that are based on the Federal rate (from 90 to 100 percent). Changes
by region vary from a minimum of 2.6 percent increase (Middle
Atlantic urban region) to a maximum of 7.5 percent increase (East
North Central rural region).
By type of ownership, government hospitals are projected to have
the largest rate of increase of total payment changes (5.6 percent,
a 1.4 percent increase due to the Federal rate changes, and a 4.2
percent increase from the effects of all other changes). Payments to
voluntary hospitals will increase 4.0 percent (a 0.9 percent
increase due to Federal rate changes, and a 3.1 percent increase
from the effects of all other changes) and payments to proprietary
hospitals will increase 3.6 percent (a 0.4 percent increase due to
Federal rate changes, and a 3.2 percent increase from the effects of
all other changes).
Section 1886(d)(10) of the Act established the MGCRB. Hospitals
may apply for reclassification for purposes of the standardized
amount, wage index, or both and for purposes of DSH for FYs 1999
through 2001. Although the Federal capital rate is not affected, a
hospital's geographic classification for purposes of the operating
standardized amount does affect a hospital's capital payments as a
result of the large urban adjustment factor and the disproportionate
share adjustment for urban hospitals with 100 or more beds.
Reclassification for wage index purposes affects the geographic
adjustment factor, since that factor is constructed from the
hospital wage index.
To present the effects of the hospitals being reclassified for
FY 2001 compared to the effects of reclassification for FY 2000, we
show the average payment percentage increase for hospitals
reclassified in each fiscal year and in total. For FY 2001
reclassifications, we indicate those hospitals reclassified for
standardized amount purposes only, for wage index purposes only, and
for both purposes. The reclassified groups are compared to all other
nonreclassified hospitals. These categories are further identified
by urban and rural designation.
Hospitals reclassified for FY 2001 as a whole are projected to
experience a 5.9 percent increase in payments (a 2.4 percent
increase attributable to Federal rate changes and a 3.5 percent
increase attributable to the effects of all other changes). Payments
to nonreclassified hospitals will increase slightly less (4.2
percent) than reclassified hospitals (5.9 percent) overall. Payments
to nonreclassified hospitals will increase less than reclassified
hospitals from the Federal rate changes (0.9 percent compared to 2.4
percent), but they will gain about the same from the effects of all
other changes (3.3 percent compared to 3.5 percent).
[[Page 26425]]
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BILLING CODE 4120-01-C
Appendix B: Technical Appendix on the Capital Cost Model and Required
Adjustments
Under section 1886(g)(1)(A) of the Act, we set capital
prospective payment rates for FY 1992 through FY 1995 so that
aggregate prospective payments for capital costs were projected to
be 10 percent lower than the amount that would have been payable on
a reasonable cost basis for capital-related costs in that year. To
implement this requirement, we developed the capital acquisition
model to determine the budget neutrality adjustment factor. Even
though the budget neutrality requirement expired effective with FY
1996, we must continue to determine the recalibration and geographic
reclassification budget neutrality adjustment factor and the
reduction in the Federal and hospital-specific rates for exceptions
payments. To determine these factors, we must continue to project
capital costs and payments.
We used the capital acquisition model from the start of
prospective payments for capital costs through FY 1997. We now have
7 years of cost reports under the capital prospective payment
system. For FY 1998, we developed a new capital cost model to
replace the capital acquisition model. This revised model makes use
of the data from these cost reports.
The following cost reports are used in the capital cost model
for this proposed rule: The December 31, 1999 update of the cost
reports for PPS-IX (cost reporting periods beginning in FY 1992),
PPS-X (cost reporting periods beginning in FY 1993), PPS-XI (cost
reporting periods beginning in FY 1994), PPS-XII (cost reporting
periods beginning in FY 1995), PPS-XIII (cost reporting periods
beginning in FY 1996), PPS-XIV (cost reporting periods beginning in
FY 1997), and PPS-XV (cost reporting periods beginning in FY 1998).
In addition, to model payments, we use the January 1, 2000 update of
the provider-specific file, and the March 1994 update of the
intermediary audit file.
Since hospitals under alternative payment system waivers (that
is, hospitals in Maryland) are currently excluded from the capital
prospective payment system, we excluded these hospitals from our
model.
We developed FY 1992 through FY 2000 hospital-specific rates
using the provider-specific file and the intermediary audit file.
[[Page 26427]]
(We used the cumulative provider-specific file, which includes all
updates to each hospital's records, and chose the latest record for
each fiscal year.) We checked the consistency between the provider-
specific file and the intermediary audit file. We ensured that
increases in the hospital-specific rates were at least as large as
the published updates (increases) for the hospital-specific rates
each year. We were able to match hospitals to the files as shown in
the following table:
------------------------------------------------------------------------
Number of
Source hospitals
------------------------------------------------------------------------
Provider-Specific File Only.................................. 129
Provider-Specific and Audit File............................. 4,707
----------
Total.................................................... 4,836
------------------------------------------------------------------------
Eighty-two of the 4,836 hospitals had unusable or missing data,
or had no cost reports available. For 20 of the 82 hospitals, we
were unable to determine a hospital-specific rate from the available
cost reports. However, there was adequate cost information to
determine that these hospitals were paid under the hold-harmless
methodology. Since the hospital-specific rate is not used to
determine payments for hospitals paid under the hold-harmless
methodology, there was sufficient cost report information available
to include these 20 hospitals in the analysis. We were able to
estimate hospital-specific amounts for one additional hospital from
the PPS-IX cost reports. Hence we were able to use 21 of the 82
hospitals. We used 4,775 hospitals for the analysis. Sixty-one
hospitals could not be used in the analysis because of insufficient
information. These hospitals account for less than 0.7 percent of
admissions. Therefore, any effects from the elimination of their
cost report data should be minimal.
We analyzed changes in capital-related costs (depreciation,
interest, rent, leases, insurance, and taxes) reported in the cost
reports. We found a wide variance among hospitals in the growth of
these costs. For hospitals with more than 100 beds, the distribution
and mean of these cost increases were different for large changes in
bed-size (greater than 20 percent). We also analyzed
changes in the growth in old capital and new capital for cost
reports that provided this information. For old capital, we limited
the analysis to decreases in old capital. We did this since the
opportunity for most hospitals to treat ``obligated'' capital put
into service as old capital has expired. Old capital costs should
decrease as assets become fully depreciated and as interest costs
decrease as the loan is amortized.
The new capital cost model separates the hospitals into three
mutually exclusive groups. Hold-harmless hospitals with data on old
capital were placed in the first group. Of the remaining hospitals,
those hospitals with fewer than 100 beds comprise the second group.
The third group consists of all hospitals that did not fit into
either of the first two groups. Each of these groups displayed
unique patterns of growth in capital costs. We found that the gamma
distribution is useful in explaining and describing the patterns of
increase in capital costs. A gamma distribution is a statistical
distribution that can be used to describe patterns of growth rates,
with the greatest proportion of rates being at the low end. We use
the gamma distribution to estimate individual hospital rates of
increase as follows:
(1) For hold-harmless hospitals, old capital cost changes were
fitted to a truncated gamma distribution, that is, a gamma
distribution covering only the distribution of cost decreases. New
capital costs changes were fitted to the entire gamma distribution,
allowing for both decreases and increases.
(2) For hospitals with fewer than 100 beds (small), total
capital cost changes were fitted to the gamma distribution, allowing
for both decreases and increases.
(3) Other (large) hospitals were further separated into three
groups:
Bed-size decreases over 20 percent (decrease).
Bed-size increases over 20 percent (increase).
Other (no change).
Capital cost changes for large hospitals were fitted to gamma
distributions for each bed-size change group, allowing for both
decreases and increases in capital costs. We analyzed the
probability distribution of increases and decreases in bed size for
large hospitals. We found the probability somewhat dependent on the
prior year change in bed size and factored this dependence into the
analysis. Probabilities of bed-size change were determined. Separate
sets of probability factors were calculated to reflect the
dependence on prior year change in bed size (increase, decrease, and
no change).
The gamma distributions were fitted to changes in aggregate
capital costs for the entire hospital. We checked the relationship
between aggregate costs and Medicare per discharge costs. For large
hospitals, there was a small variance, but the variance was larger
for small hospitals. Since costs are used only for the hold-harmless
methodology and to determine exceptions, we decided to use the gamma
distributions fitted to aggregate cost increases for estimating
distributions of cost per discharge increases.
Capital costs per discharge calculated from the cost reports
were increased by random numbers drawn from the gamma distribution
to project costs in future years. Old and new capital were projected
separately for hold-harmless hospitals. Aggregate capital per
discharge costs were projected for all other hospitals. Because the
distribution of increases in capital costs varies with changes in
bed size for large hospitals, we first projected changes in bed size
for large hospitals before drawing random numbers from the gamma
distribution. Bed-size changes were drawn from the uniform
distribution with the probabilities dependent on the previous year
bed-size change. The gamma distribution has a shape parameter and a
scaling parameter. (We used different parameters for each hospital
group, and for old and new capital.)
We used discharge counts from the cost reports to calculate
capital cost per discharge. To estimate total capital costs for FY
1999 (the MedPAR data year) and later, we use the number of
discharges from the MedPAR data. Some hospitals had considerably
more discharges in FY 1999 than in the years for which we calculated
cost per discharge from the cost report data. Consequently, a
hospital with few cost report discharges would have a high capital
cost per discharge, since fixed costs would be allocated over only a
few discharges. If discharges increase substantially, the cost per
discharge would decrease because fixed costs would be allocated over
more discharges. If the projection of capital cost per discharge is
not adjusted for increases in discharges, the projection of
exceptions would be overstated. We address this situation by
recalculating the cost per discharge with the MedPAR discharges if
the MedPAR discharges exceed the cost report discharges by more than
20 percent. We do not adjust for increases of less than 20 percent
because we have not received all of the FY 1999 discharges, and we
have removed some discharges from the analysis because they are
statistical outliers. This adjustment reduces our estimate of
exceptions payments, and consequently, the reduction to the Federal
rate for exceptions is smaller. We will continue to monitor our
modeling of exceptions payments and make adjustments as needed.
The average national capital cost per discharge generated by
this model is the combined average of many randomly generated
increases. This average must equal the projected average national
capital cost per discharge, which we projected separately (outside
this model). We adjusted the shape parameter of the gamma
distributions so that the modeled average capital cost per discharge
matches our projected capital cost per discharge. The shape
parameter for old capital was not adjusted since we are modeling the
aging of ``existing'' assets. This model provides a distribution of
capital costs among hospitals that is consistent with our aggregate
capital projections.
Once each hospital's capital-related costs are generated, the
model projects capital payments. We use the actual payment
parameters (for example, the case-mix index and the geographic
adjustment factor) that are applicable to the specific hospital.
To project capital payments, the model first assigns the
applicable payment methodology (fully prospective or hold-harmless)
to the hospital as determined from the provider-specific file and
the cost reports. The model simulates Federal rate payments using
the assigned payment parameters and hospital-specific estimated
outlier payments. The case-mix index for a hospital is derived from
the FY 1999 MedPAR file using the FY 2001 DRG relative weights
included in section VI. of the Addendum to this proposed rule. The
case-mix index is increased each year after FY 1999 based on
analysis of past experiences in case-mix increases. Based on
analysis of recent case-mix increases, we estimate that case-mix
will increase 0.5 percent in FY 2000. We project that case-mix will
increase 0.5 percent in FY 2001. (Since we are using FY 1999 cases
for our analysis, the FY 1999 increase in case-mix has no effect on
projected capital payments.)
[[Page 26428]]
Changes in geographic classification and revisions to the
hospital wage data used to establish the hospital wage index affect
the geographic adjustment factor. Changes in the DRG classification
system and the relative weights affect the case-mix index.
Section 412.308(c)(4)(ii) requires that the estimated aggregate
payments for the fiscal year, based on the Federal rate after any
changes resulting from DRG reclassifications and recalibration and
the geographic adjustment factor, equal the estimated aggregate
payments based on the Federal rate that would have been made without
such changes. For FY 2000, the budget neutrality adjustment factors
were 1.00142 for the national rate and 1.00134 for the Puerto Rico
rate.
Since we implemented a separate geographic adjustment factor for
Puerto Rico, we applied separate budget neutrality adjustments for
the national geographic adjustment factor and the Puerto Rico
geographic adjustment factor. We applied the same budget neutrality
factor for DRG reclassifications and recalibration nationally and
for Puerto Rico. Separate adjustments were unnecessary for FY 1998
and earlier since the geographic adjustment factor for Puerto Rico
was implemented in FY 1998.
To determine the factors for FY 2001, we first determined the
portions of the Federal national and Puerto Rico rates that would be
paid for each hospital in FY 2001 based on its applicable payment
methodology. Using our model, we then compared, separately for the
national rate and the Puerto Rico rate, estimated aggregate Federal
rate payments based on the FY 2000 DRG relative weights and the FY
2000 geographic adjustment factor to estimated aggregate Federal
rate payments based on the FY 2000 relative weights and the FY 2001
geographic adjustment factor. In making the comparison, we held the
FY 2001 Federal rate portion constant and set the other budget
neutrality adjustment factor and the exceptions reduction factor to
1.00. To achieve budget neutrality for the changes in the national
geographic adjustment factor, we applied an incremental budget
neutrality adjustment of 0.99846 for FY 2001 to the previous
cumulative FY 2000 adjustment of 1.00142, yielding a cumulative
adjustment of 0.99988 through FY 2001. For the Puerto Rico
geographic adjustment factor, we applied an incremental budget
neutrality adjustment of 1.00312 for FY 2001 to the previous
cumulative FY 2000 adjustment of 1.00134, yielding a cumulative
adjustment of 1.00446 through FY 2001. We then compared estimated
aggregate Federal rate payments based on the FY 2000 DRG relative
weights and the FY 2001 geographic adjustment factors to estimated
aggregate Federal rate payments based on the FY 2001 DRG relative
weights and the FY 2001 geographic adjustment factors. The
incremental adjustment for DRG classifications and changes in
relative weights would be 1.00019 nationally and for Puerto Rico.
The cumulative adjustments for DRG classifications and changes in
relative weights and for changes in the geographic adjustment
factors through FY 2001 would be 1.00007 nationally and 1.00465 for
Puerto Rico. The following table summarizes the adjustment factors
for each fiscal year:
Budget Neutrality Adjustment for DRG Reclassifications and Recalibration and the Geographic Adjustment Factors
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Puerto Rico
-------------------------------------------------------------------------------------------------------------------
Incremental adjustment Incremental adjustment
--------------------------------------------- ---------------------------------------------
Fiscal year DRG DRG
Geographic reclassifications Cumulative Geographic reclassifications Cumulative
adjustment and Combined adjustment and Combined
factor recalibration factor recalibration
--------------------------------------------------------------------------------------------------------------------------------------------------------
1992................................ ........... ................. ........... 1.00000 ........... ................. ........... ...........
1993................................ ........... ................. 0.99800 0.99800 ........... ................. ........... ...........
1994................................ ........... ................. 1.00531 1.00330 ........... ................. ........... ...........
1995................................ ........... ................. 0.99980 1.00310 ........... ................. ........... ...........
1996................................ ........... ................. 0.99940 1.00250 ........... ................. ........... ...........
1997................................ ........... ................. 0.99873 1.00123 ........... ................. ........... ...........
1998................................ ........... ................. 0.99892 1.00015 ........... ................. ........... 1.00000
1999................................ 0.99944 1.00335 1.00279 1.00294 0.99898 1.00335 1.00233 1.00233
2000................................ 0.99857 0.99991 0.99848 1.00142 0.99910 0.99991 0.99901 1.00134
2001................................ 0.99846 1.00019 0.99865 1.00007 1.00312 1.00019 1.00331 1.00465
--------------------------------------------------------------------------------------------------------------------------------------------------------
The methodology used to determine the recalibration and
geographic (DRG/GAF) budget neutrality adjustment factor is similar
to that used in establishing budget neutrality adjustments under the
prospective payment system for operating costs. One difference is
that, under the operating prospective payment system, the budget
neutrality adjustments for the effect of geographic
reclassifications are determined separately from the effects of
other changes in the hospital wage index and the DRG relative
weights. Under the capital prospective payment system, there is a
single DRG/GAF budget neutrality adjustment factor (the national
rate and the Puerto Rico rate are determined separately) for changes
in the geographic adjustment factor (including geographic
reclassification) and the DRG relative weights. In addition, there
is no adjustment for the effects that geographic reclassification
has on the other payment parameters, such as the payments for
serving low-income patients or the large urban add-on payments.
In addition to computing the DRG/GAF budget neutrality
adjustment factor, we used the model to simulate total payments
under the prospective payment system.
Additional payments under the exceptions process are accounted
for through a reduction in the Federal and hospital-specific rates.
Therefore, we used the model to calculate the exceptions reduction
factor. This exceptions reduction factor ensures that aggregate
payments under the capital prospective payment system, including
exceptions payments, are projected to equal the aggregate payments
that would have been made under the capital prospective payment
system without an exceptions process. Since changes in the level of
the payment rates change the level of payments under the exceptions
process, the exceptions reduction factor must be determined through
iteration.
In the August 30, 1991 final rule (56 FR 43517), we indicated
that we would publish each year the estimated payment factors
generated by the model to determine payments for the next 5 years.
The table below provides the actual factors for FYs 1992 through
2000, the proposed factors for FY 2001, and the estimated factors
that would be applicable through FY 2005. We caution that these are
estimates for FYs 2001 and later, and are subject to revisions
resulting from continued methodological refinements, receipt of
additional data, and changes in payment policy. We note that in
making these projections, we have assumed that the cumulative
national DRG/GAF budget neutrality adjustment factor will remain at
1.00007 (1.00465 for Puerto Rico) for FY 2001 and later because we
do not have sufficient information to estimate the change that will
occur in the factor for years after FY 2001.
The projections are as follows:
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[[Page 26434]]
Appendix D: Recommendation of Update Factors for Operating Cost Rates
of Payment for Inpatient Hospital Services
I. Background
Several provisions of the Act address the setting of update
factors for inpatient services furnished in FY 2001 by hospitals
subject to the prospective payment system and by hospitals or units
excluded from the prospective payment system. Section
1886(b)(3)(B)(i)(XVI) of the Act sets the FY 2001 percentage
increase in the operating cost standardized amounts equal to the
rate of increase in the hospital market basket minus 1.1 percent for
prospective payment hospitals in all areas. Section
1886(b)(3)(B)(iv) of the Act sets the FY 2001 percentage increase in
the hospital-specific rates applicable to sole community and
Medicare-dependent, small rural hospitals equal to the rate set
forth in section 1886(b)(3)(B)(i) of the Act. For Medicare-
dependent, small rural hospitals, the percentage increase is the
same update factor as all other hospitals subject to the prospective
payment system, or the rate of increase in the market basket minus
1.1 percentage points. Section 406 of Public Law 106-113 amended
section 1886(b)(3)(B)(i) of the Act to provide that, for sole
community hospitals, the rate of increase in the hospital-specific
rates for FY 2001 only is equal to the market basket percentage
increase. Prior to FY 2001, sole community hospitals were subject to
the same percentage increase to their hospital-specific rates as all
other hospitals subject to the prospective payment system set forth
in section 1886(b)(3)(B)(i) of the Act.
Under section 1886(b)(3)(B)(ii) of the Act, the FY 2001
percentage increase in the rate-of-increase limits for hospitals and
units excluded from the prospective payment system ranges from the
percentage increase in the excluded hospital market basket less a
percentage between 0 and 2.5 percentage points, depending on the
hospital's or unit's costs in relation to its limit for the most
recent cost reporting period for which information is available, or
0 percentage point if costs do not exceed two-thirds of the limit.
In accordance with section 1886(d)(3)(A) of the Act, we are
proposing to update the standardized amounts, the hospital-specific
rates, and the rate-of-increase limits for hospitals and units
excluded from the prospective payment system as provided in section
1886(b)(3)(B) of the Act. Based on the first quarter 2000 forecast
of the FY 2001 market basket increase of 3.1 percent for hospitals
and units subject to the prospective payment system, the proposed
update to the standardized amounts is 2.0 percent (that is, the
market basket rate of increase minus 1.1 percent percentage points)
for hospitals in both large urban and other areas. The proposed
update to the hospital-specific rate applicable to Medicare-
dependent, small rural hospitals is also 2.0 percent. The proposed
update to the hospital-specific rate applicable to sole community
hospitals is 3.1 percent. The proposed update for hospitals and
units excluded from the prospective payment system would range from
the percentage increase in the excluded hospital market basket
(currently estimated at 3.1 percent) minus a percentage between 0
and 2.5 percentage points, or 0 percentage point, resulting in an
increase in the rate-of-increase limit between 0.6 and 3.1 percent,
or 0 percent.
Section 1886(e)(4) of the Act requires that the Secretary,
taking into consideration the recommendations of the Medicare
Payment Advisory Commission (MedPAC), recommend update factors for
each fiscal year that take into account the amounts necessary for
the efficient and effective delivery of medically appropriate and
necessary care of high quality. Under section 1886(e)(5) of the Act,
we are required to publish the update factors recommended under
section 1886(e)(4) of the Act. Accordingly, this appendix provides
the recommendations of appropriate update factors and the analysis
underlying our recommendations.
In its March 1, 2000 report, MedPAC did not make a specific
update recommendation for FY 2001 payments for Medicare acute
inpatient hospitals. However, at its April 13, 2000 public meeting,
MedPAC announced that it was recommending a combined update between
3.5 percent and 4.0 percent for operating and capital-related
payments for FY 2001. This recommendation is higher than the current
law amount as prescribed by Public Law 105-33 and proposed in this
rule. Because of the timing of the announcement and our need for
ample time to perform a proper analysis of the recommendation, we
will address the comparison of HCFA's update recommendation and
MedPAC's update recommendation in the FY 2001 final rule in August
2000 when we will have had the opportunity to review the data
analyses that substantiate MedPAC's recommendation.
We describe the basis for our FY 2001 update recommendation
(Table 1) in section II. of this Appendix.
II. Secretary's Recommendations
Under section 1886(e)(4) of the Act, we are recommending that an
appropriate update factor for the standardized amounts is 2.0
percentage points for hospitals located in large urban and other
areas. We are also recommending an update of 2.0 percentage points
to the hospital-specific rate for Medicare-dependent, small rural
hospitals. In addition, we are recommending an update of 3.1
percentage points to the hospital-specific rate for sole community
hospitals. We believe these recommended update factors would ensure
that Medicare acts as a prudent purchaser and provide incentives to
hospitals for increased efficiency, thereby contributing to the
solvency of the Medicare Part A Trust Fund.
We recommend that hospitals excluded from the prospective
payment system receive an update of between 0.6 and 3.1 percentage
points, or 0 percentage points. The update for excluded hospitals
and units is equal to the increase in the excluded hospital
operating market basket less a percentage between 0 and 2.5
percentage points, or 0 percentage points, depending on the
hospital's or unit's costs in relation to its rate-of-increase limit
for the most recent cost reporting period for which information is
available. The market basket rate of increase for excluded hospitals
and units is currently forecast at 3.1 percent.
Our update recommendation of 2.0 percent (market basket increase
minus 1.1 percent) for prospective payment system operating costs
standardized amounts is supported by the following analyses that
measure changes in hospital productivity, scientific and
technological advances, practice pattern changes, and changes in
case-mix:
A. Productivity
Service level productivity is defined as the ratio of total
service output to full-time equivalent employees (FTEs). While we
recognize that productivity is a function of many variables (for
example, labor, nonlabor material, and capital inputs), we use a
labor productivity measure since this update framework applies to
operating payment. To recognize that we are apportioning the short-
run output changes to the labor input and not considering the
nonlabor inputs, we weight our productivity measure for operating
costs by the share of direct labor services in the market basket to
determine the expected effect on cost per case.
Our recommendation for the service productivity component is
based on historical trends in productivity and total output for both
the hospital industry and the general economy, and projected levels
of future hospital service output. MedPAC's predecessor, the
Prospective Payment Assessment Commission (ProPAC), estimated
cumulative service productivity growth to be 4.9 percent from 1985
through 1989, or 1.2 percent annually. At the same time, ProPAC
estimated total output growth at 3.4 percent annually, implying a
ratio of service productivity growth to output growth of 0.35.
Since it is not possible at this time to develop a productivity
measure specific to Medicare patients, we examined productivity
(output per hour) and output (gross domestic product) for the
economy. Depending on the exact time period, annual changes in
productivity range from 0.3 to 0.35 percent of the change in output
(that is, a 1.0 percent increase in output would be correlated with
a 0.3 to 0.35 percent change in output per hour).
Under our framework, the recommended update is based in part on
expected productivity--that is, projected service output during the
year, multiplied by the historical ratio of service productivity to
total service output, multiplied by the share of labor in total
operating inputs, as calculated in the hospital market basket. This
method estimates an expected labor productivity improvement in the
same proportion to expected total service growth that has occurred
in the past and assumes that, at a minimum, growth in FTEs changes
proportionally to the growth in total service output. Thus, the
recommendation allows for unit productivity to be smaller than the
historical averages in years that output growth is relatively low
and larger in years that output growth is higher than the historical
averages. Based on the above estimates from both the hospital
industry and the economy, we have chosen to employ the
[[Page 26435]]
range of ratios of productivity change to output change of 0.30 to
0.35.
The expected change in total hospital service output is the
product of projected growth in total admissions (adjusted for
outpatient usage), projected real case-mix growth, expected quality-
enhancing intensity growth, and net of expected decline in intensity
due to reduction of cost-ineffective practice. Case-mix growth and
intensity numbers for Medicare are used as proxies for those of the
total hospital, since case-mix increases (used in the intensity
measure as well) are unavailable for non-Medicare patients. Thus,
expected output growth is simply the sum of the expected change in
intensity (0.0 percent), projected admissions change (1.6 percent
for FY 2001), and projected real case-mix growth (0.5 percent), or
2.1 percent. The share of direct labor services in the market basket
(consisting of wages, salaries, and employee benefits) is 61.4
percent.
Multiplying the expected change in total hospital service output
(2.1 percent) by the ratio of historical service productivity change
to total service growth of 0.30 to 0.35 and by the direct labor
share percentage 61.4, provides our productivity standard of -0.5 to
-0.4 percent.
B. Intensity
We base our intensity standard on the combined effect of three
separate factors: changes in the use of quality enhancing services,
changes in the use of services due to shifts in within-DRG severity,
and changes in the use of services due to reductions of cost-
ineffective practices. For FY 2001, we recommend an adjustment of
0.0 percent. The basis of this recommendation is discussed below.
We have no empirical evidence that accurately gauges the level
of quality-enhancing technology changes. A study published in the
Winter 1992 issue of the Health Care Financing Review,
``Contributions of case mix and intensity change to hospital cost
increases'' (pp. 151-163), suggests that one-third of the intensity
change is attributable to high-cost technology. The balance was
unexplained but the authors speculated that it is attributable to
fixed costs in service delivery.
Typically, a specific new technology increases cost in some uses
and decreases cost in other uses. Concurrently, health status is
improved in some situations while in other situations it may be
unaffected or even worsened using the same technology. It is
difficult to separate out the relative significance of each of the
cost-increasing effects for individual technologies and new
technologies.
Other things being equal, per-discharge fixed costs tend to
fluctuate in inverse proportion to changes in volume. Fixed costs
exist whether patients are treated or not. If volume is declining,
per-discharge fixed costs will rise, but the reverse is true if
volume is increasing.
Following methods developed by HCFA's Office of the Actuary for
deriving hospital output estimates from total hospital charges, we
have developed Medicare-specific intensity measures based on a 5-
year average using FYs 1995 through 1999 MedPAR billing data. Case-
mix constant intensity is calculated as the change in total Medicare
charges per discharge adjusted for changes in the average charge per
unit of service as measured by the CPI for hospital and related
services and changes in real case-mix. Thus, in order to measure
changes in intensity, one must measure changes in real case-mix.
For FYs 1995 through 1999, observed case-mix index change ranged
from a low of -0.3 percent to a high of 1.7 percent, with a 5-year
average change of 0.6 percent. Based on evidence from past studies
of case-mix change, we estimate that real case-mix change fluctuates
between 1.0 and 1.4 percent and the observed values generally fall
in this range, although some years the figures fall outside this
range. The average percentage change in charge per discharge was 3.6
percent and the average annual change in the CPI for hospital and
related services was 4.1 percent. Dividing the change in charge per
discharge by the quantity of the real case-mix index change and the
CPI for hospital and related services yields an average annual
change in intensity of -1.9 percent. Assuming the technology/fixed
cost ratio still holds (.33), technology would account for a -0.6
percent annual decline while fixed costs would account for a -1.3
percent annual decline. The decline in fixed costs per discharge
makes intuitive sense as volume, measured by total discharges, has
increased during the period. In the past, we have not recommended a
negative intensity adjustment. Although we are not recommending a
negative adjustment for FY 2001, we are reflecting the possible
range that such a negative adjustment could span, based on our
analysis. Accordingly, for FY 2001, we are recommending an intensity
adjustment between 0 percent and -0.6 percent.
C. Change in Case-Mix
Our analysis takes into account projected changes in case-mix,
adjusted for changes attributable to improved coding practices. For
our FY 2001 update recommendation, we are projecting a 0.5 percent
increase in the case-mix index. We define real case-mix as actual
changes in the mix (and resources requirements) of Medicare patients
as opposed to changes in coding behavior that results in assignment
of cases to higher weighted DRGS, but do not reflect greater
resource requirements. Unlike in past years, where we differentiated
between ``real'' case-mix increase and increases attributable to
changes in coding behavior, we do not feel changes in coding
behavior will impact the overall case-mix in FY 2001. As such for FY
2001, we estimate that real case-mix is equal to projected change in
case-mix. Thus, we are recommending a 0.0 adjustment for case-mix.
D. Effect of FY 1999 DRG Reclassification and Recalibration
We estimate that DRG reclassification and recalibration for FY
1999 resulted in a 0.0 percent change in the case-mix index when
compared with the case-mix index that would have resulted if we had
not made the reclassification and recalibration changes to the
GROUPER.
E. Forecast Error Correction
We make a forecast error correction if the actual market basket
changes differ from the forecasted market basket by 0.25 percentage
points or more. There is a 2-year lag between the forecast and the
measurement of forecast error. Our update framework for FY 2001 does
not reflect a forecast error correction because, for FY 1999, there
was less than a 0.25 percentage point difference between the actual
market basket and the forecasted market basket.
As we explained in section I. of this Appendix, a comparison of
our update recommendation to MedPAC's recommendation is unavailable
for this proposed rule. MedPAC did not announce its recommendation
for a combined update of between 3.5 percent and 4.0 percent for
operating and capital-related payments for FY 2001 until its April
13, 2000 public meeting. This recommendation is higher than the
current law amount as prescribed by Public Law 105-33 and proposed
in this rule. Because of the timing of the announcement and our need
for ample time to perform a proper analysis of the recommendation,
we will address the comparison of HCFA's update recommendation and
MedPAC's update recommendation in the FY 2001 final rule in August
2000 when we will have had the opportunity to review the data
analyses that substantiate MedPAC's recommendation. The following is
a summary of the update range supported by our analyses:
[[Page 26436]]
Table 1.--HHS' FY 2001 Update Recommendation
------------------------------------------------------------------------
Market basket MB
------------------------------------------------------------------------
Policy Adjustments Factors:
Productivity.......................... -0.5 to -0.4
Intensity............................. 0.0 to -0.6
=============================
Subtotal.......................... -0.5 to -1.0
=============================
Case-Mix Adjustment Factors:
Projected Case-Mix Change............. -0.5
Real Across DRG Change................ 0.5
-----------------------------
Subtotal.......................... 0.0
Effect of 1999 Reclassification and 0.0
Recalibration.
Forecast Error Correction................. 0.0
Total Recommended Update.................. MB -0.5 to MB -1.0
------------------------------------------------------------------------
Consistent with current law, we are recommending an update of
market basket increase minus 1.1 percentage points (or 2.0 percent).
We note that this approximates the lower bound of the range
suggested by our framework when accounting for a negative intensity
change.
For FY 2001, we believe that a 2.0 update factor appropriately
reflects current trends in health care delivery, including the
recent decreases in the use of hospital inpatient services and the
corresponding increase in the use of hospital outpatient and
postacute care services. We also recommend that the hospital-
specific rates applicable to Medicare-dependent, small rural
hospitals be increased by the same update, 2.0 percentage points.
Furthermore, we recommend that the hospital-specific rates
applicable to sole community hospitals be increased by an update of
3.1 percentage points.
[FR Doc. 00-10874 Filed 5-4-00; 8:45 am]
BILLING CODE 4120-01-P