[Federal Register Volume 69, Number 194 (Thursday, October 7, 2004)]
[Rules and Regulations]
[Pages 60242-60272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22389]
[[Page 60241]]
-----------------------------------------------------------------------
Part III
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Part 403, et al.
Medicare Program; Changes to the Hospital Inpatient Prospective Payment
Systems and Fiscal Year 2005 Rates; Correction of Final Rule
Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 /
Rules and Regulations
[[Page 60242]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 403, 412, 413, 418, 460, 480, 482, 483, 485, and 489
[CMS-1428-CN2]
RIN 0938-AM80
Medicare Program; Changes to the Hospital Inpatient Prospective
Payment Systems and Fiscal Year 2005 Rates; Corrections
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Correction of final rule.
-----------------------------------------------------------------------
SUMMARY: This document corrects technical errors in the final rule that
appeared in the August 11, 2004 Federal Register entitled ``Medicare
Program; Changes to the Hospital Inpatient Prospective Payment Systems
and Fiscal Year 2005 Rates.''
DATES: Effective October 1, 2004.
FOR FURTHER INFORMATION CONTACT: James Hart, (410) 786-4548.
SUPPLEMENTARY INFORMATION:
I. Background
In FR Doc. 04-17943 (69 FR 48916, August 11, 2004), the final rule
entitled ``Medicare Program; Changes to the Hospital Inpatient
Prospective Payment Systems and Fiscal Year 2005 Rates'' (hereinafter
referred to as the FY 2005 final rule) there were a number of technical
errors that are identified and corrected in section III of this
correction notice. The provisions in this correction notice are
effective as if they had been included in the FY 2005 final rule.
Accordingly, the corrections are effective on October 1, 2004.
II. Summary of the Corrections to the FY 2005 Final Rule
A. Corrections to the FY 2005 Rule Contained in This Notice
This correction notice makes a number of changes to the FY 2005
final rule. Because of the number of corrections and the length of some
of these corrections, we are providing a summary of the major
corrections contained within this notice.
On page 49022, in the summary of a public comment concerning the
application for new technology add-on payments for the Intramedullary
Skeletal Kinetic Distractor (ISKD), we did not accurately describe the
issues raised by the applicant. Accordingly, in this correction notice,
we are revising the summary of this comment to reflect more accurately
the comment submitted. (See section III, item 11 of this notice.)
On page 49061, we inadvertently omitted a comment and response with
respect to geographic reclassifications under section 508 of Public Law
108-173. However, we note that the comment was considered before
finalization of our policy. (See item 13 in section III of this
notice.)
On pages 49070 through 49075, we discuss our postacute care
transfer payment policy. In this discussion, we inadvertently omitted
several comments and responses from this section. However, we note that
we did consider these comments before we finalized our policy. Several
comments were related to the proposal to include DRG 430 in the policy
under the proposed alternate criteria (which we did not adopt in the
final rule). Many others raised arguments that CMS has responded to in
the past, but which these commenters raised again in response to the FY
2005 proposed rule (69 FR 28196). In addition, we inadvertently omitted
from the final rule a summation of and our response to a comment
relating to the postacute care transfer policy that was outside the
scope of the proposed rule.
In the interests of clarity and convenience, we are reprinting the
discussion of comments on this section in its entirety, including all
comments that were inadvertently omitted from the final rule, as well
as appropriate responses to those comments. (See items 14 and 15 in
section III of this notice.)
On page 49105, we inadvertently omitted portions of our policy
discussion with respect to our decision to make an exception for
hospitals that failed to reclassify as an urban group under 42 CFR
412.234. On page 49107, we also inadvertently omitted part of our
policy discussion with respect to the special circumstances of sole
community hospitals in low population density States. In addition, on
page 49249, there were technical and typographical errors in two
sections (Sec. 412.230 and Sec. 412.232) of the regulations text
regarding criteria for hospitals seeking redesignation. We note that
one of the errors was a result of not revising the timeframe in Sec.
412.230(d)(3)(iii)(B) in conjunction with adding a new provision in
Sec. 412.230(d)(3)(iii)(C). (See items 18, 19, 21, and 43 in section
III of this notice.)
On page 49090, we inadvertently duplicated a comment and response
that were appropriately included on page 49155 of the FY 2005 final
rule. Also on pages 49130 through 49132, we inadvertently omitted
clarifications to the preamble discussion of our policy regarding the
treatment of hospitals that are members of the same affiliated group as
of July 1, 2003, under section 1886(h)(7)(A)(iii) of the Act for the
purposes of payment adjustments for indirect medical education (IME)
and graduate medical education (GME) costs. In addition, on page 49132,
we inadvertently omitted clarifications to the preamble discussion of
our policies regarding the criteria for determining hospitals that will
receive increases to their FTE resident caps under section
1886(h)(7)(B) of the Act. In section III of this notice we correct
these errors (see section III items 16, 25, and 26 of this notice).
On pages 49221, 49224, and 49271, we made technical errors in our
preamble discussion and regulatory text regarding the grandfathering of
certain critical access hospitals (CAHs) due to the new metropolitan
statistical areas (MSA) definitions for the geographic classification
of hospitals. As a result, we are making corrections to two dates and
removing an erroneous paragraph of regulations text. (See items 39, 42,
and 47 of section III of this notice.)
On page 49240, we made a technical error in the regulations text of
Sec. 412.22(e)(1) regarding hospitals-within-hospitals. In this
paragraph, we erroneously stated the timeframe for which the provision
is applicable. (See item 41 section III of this notice.)
On page 49250, in the regulatory text changes for Sec.
412.312(e)(3), we incorrectly cited the cross-reference to the
offsetting amounts established for extraordinary circumstances
exception payments under the capital-related costs under IPPS. As we
had indicated in the preamble to the final rule (69 FR 49185 and
49186), the correct cross-reference in both cases in the regulatory
text should have been Sec. 412.348(e). (See section III. item 44 of
this notice.)
On page 49290, we incorrectly stated the FY 2005 special capital
rate for Puerto Rico as $199.02. Consistent with the capital rate for
Puerto Rico that was stated in Table 1D in the Addendum of the final
rule (69 FR 49294), the rate in the narrative of the Addendum should
have been $199.01. (See section III. item 50 of this notice.)
On pages 49738 through 49754, in Table 11-FY 2005 LTC-DRGs,
Relative Weights, Geometric Average Length of Stay, and \5/6\ of the
Geometric Average Length of Stay, there were inadvertent typographical
in the published table with respect to the geometric average length of
stay and the \5/6\ geometric average length of stay (columns 4 and 5 of
the table) for a number of the long-term care diagnostic-related groups
[[Page 60243]]
(LTC-DRGs). There were no errors in the other columns of the published
table. However, for clarity and ease of reference, we are reprinting
the table in its entirety. (See item 56 in section III of this notice.)
We are also correcting typographic, formatting, or other errors
that appear on other pages of the FY 2005 final rule, as cited in
section III. of this notice.
B. Additional Corrections to the FY 2005 Final Rule
We made technical errors in the tables related to the wage indexes,
geographic reclassifications, and IPPS payment rates. In section IV. of
this notice, we discuss these errors in detail. However, we are posting
the corrected tables on the CMS Web site and will issue a separate
Federal Register document that contains corrected tables and addendum
language and a revised impact analysis.
III. Correction of Errors
In FR Doc. 04-17943 (69 FR 48916), make the following corrections:
A. Corrections to Errors in the Preamble
1. On page 48928, second column, lines 39 through 43, the sentence
``The proposed restructured DRG 103 included any principal diagnosis in
MDC 5, plus one of the following surgical procedure codes:'' is
corrected to read ``The proposed restructured DRG 103 is procedure-
driven and not based on any specific principal diagnosis. Assignment to
DRG 103 will be based on one of the following surgical procedure
codes:''
2. On page 48938, second column, at the end of line 42 and before
line 43, add the following sentence: ``We are also assigning code 84.59
and codes 84.60 through 84.69 to the following DRGs as discussed above
and shown in Table 6B: MDC 1, DRGs 531-532; MDC 21, DRGs 442-443; MDC
24, DRG 486.''
3. On page 48952, first column, lines 10 through 26, these lines
are deleted and the following new text in their place:
``The logic for DRG 315 is modified as follows:
O.R. Procedures
This list remains the same as V21.0 of the GROUPER
OR
Principal diagnosis of renal failure from DRG 315
AND
Non-Operating Room Procedure
86.07, Insertion of totally implantable vascular access device
[VAD]
OR
Principal Diagnosis
250.41, Diabetes with renal manifestations, type 1, [insulin
dependent type] [IDDM] [juvenile type], not stated as uncontrolled
250.43, Diabetes with renal manifestations, type 1, [insulin
dependent type] [IDDM] [juvenile type], uncontrolled
AND
Non-Operating Room Procedures
52.84, Autotransplantation of cells of islets of Langerhans
52.85, Allotransplantation of cells of islets of Langerhans''.
4. On page 48975, second column, line 56, the term ``diotrecogin''
is corrected to read ``drotrecogin''.
5. On page 48976, first column, line 3, the term ``diotrecogin'' is
corrected to read ``drotrecogin''.
6. On page 49002, second column,
a. Lines 2 through 5, the sentence ``The comment regarding the DRG
assignment of the treatment for AIP is addressed in section II.B.16.i.
of this final rule.'' is deleted.
b. Line 45, the cross-reference ``section II.B.16.c.'' is corrected
to read ``section II.B.16.d.''; and
c. Line 48, the cross-reference ``section II.B.16.i.'' is corrected
to read ``section II.B.16.j.''.
7. On page 49003, second column, lines 42, the term ``begins'' is
corrected to read ``begin''.
8. On page 49008,
a. First column,
(1) Line 6, the date ``July 2, 2003'' is corrected to read ``July
2, 2002''.
(2) After line 63 insert the following paragraph ``We are
finalizing that proposal in this final rule.''
b. Second column, lines 5 and 6, the paragraph ``We are finalizing
that proposal in this final rule'' is deleted.
9. On page 49009, third column, lines 61 through 64, the phrase
``(Craniotomy with implantation of chemotherapeutic agent or acute
complex central nervous system principle diagnosis) to which Gliadel
cases will be assigned.'' is corrected to read ``(Craniotomy with
Implantation of Chemotherapeutic Agent or Acute Complex Central Nervous
System Principal Diagnosis) to which cases involving GLIADEL[supreg]
will be assigned.''
10. On page 49018, second column, line 63, the phrase ``stated that
that based'' is corrected to read ``stated that based''.
11. On page 49022, first column, lines 22 through 55, the paragraph
beginning with the phrase ``Comment: The applicant noted that it'' is
corrected to read:
``Comment: The applicant stated that it was inappropriate to use
the date of FDA approval (May 2, 2001) as the date the device was
commercially available, which the applicant believes should be February
2002. The commenter stated that the `delay between FDA approval and
commercial availability was due to a halt in the production while
certain changes on the ISKD were validated.' It also noted that the
company `conducted a comprehensive review of its sales database' and
has determined that the first commercial sales of the device were made
in February 2002, and as such, the costs of the device were not
included in the FY 2001 MedPAR. The applicant reiterated the reasons
the device met the cost and substantial clinical improvement criteria.
The applicant also stated that if CMS had asked for market data in the
application, it would have provided that information to us sooner, and
would have had the opportunity to present its argument that the device
did, in fact, have a delay between FDA approval and coming to the
market and respectfully requested that we reconsider the application,
taking these points into consideration.''
12. On page 49028, second column, line 35, the term ``OMB'' is
corrected to read ``Census''.
13. On page 49061, second column, after line 25 and before line 26
insert the following 2 paragraphs:
``Comment: One commenter requested that we clarify whether
hospitals that were approved for reclassification under the section 508
of Public Law 108-173 provision for urban groups could also reclassify
under the policy, which we proposed in our discussion of the
standardized amount reclassification provisions, under which certain
hospitals that previously were part of failed urban group
reclassification applications for FYs 2004 and 2005 would be assigned
to the MSAs to which they had applied in their applications for FYs
2004 and 2005. The commenter stated that the proposal should be
construed to provide all section 508 hospitals with such an assignment
and that to do so would allow theses hospitals to extend their section
508 reclassifications for a 6-month period, from April 1, 2007 through
September 1, 2007. Finally, the commenter recommended that, in
effecting the extension, `the section 508 reclassifications should be
deemed to take precedence over the assignment of the wage index by CMS
so any dilution of the target wage index would not occur until the 6-
month extension begins'.
``Response: In the proposed rule, we proposed to exercise the
Secretary's authority to provide for `exceptions and adjustments' to
payments under the
[[Page 60244]]
IPPS. Specifically, we proposed to assign a different wage index to a
group of hospitals that were unable to reclassify because of a
reclassification criterion that is no longer appropriate due to a
statutory change. Several hospitals, including those described above,
notified us that they have met the requirements that we announced in
the proposed rule. We acknowledge that we had not contemplated a
situation such as the one described by the commenter. Even in light of
this circumstance, we do not intend to modify our proposal because the
intent of the proposal was to assign a different wage index to a group
of hospitals that `were unable to reclassify' (69 FR 28288) (emphasis
added). The hospitals described by the commenter were approved for
reclassification under section 508 of Public Law 108-173. Finally,
section 508(a)(3) of Public Law 108-173 provides: `Such
reclassification shall apply with respect to discharges occurring
during the 3-year period beginning with April 1, 2004.' Because the
section 508 reclassifications have been implemented in accordance with
Congressional intent, we are clarifying in this final rule that the
assignment of a different wage index, as proposed, is applicable only
to those applicants that were unable to reclassify because of a
reclassification criterion that is no longer appropriate.''.
14. On page 49072, third column, line 33, the phrase ``postacute
transfer policy'' is corrected to read ``postacute care transfer
policy''.
15. On pages 49073 through 49075 the text beginning on page 49073,
first column, first full paragraph and ending on page 49075, first
column, fourth full paragraph, is revised to read as follows:
``Comment: Several commenters objected to the proposed alternate
criteria for DRGs to be included in the postacute care transfer policy.
Some commenters believed that the proposed criteria were inappropriate
because they appeared contrived to ensure that cases in the former DRG
483, which had a very high DRG weight and resulted in significant
Medicare payments, would not be paid at the higher rate associated with
those cases. One commenter stated that if CMS' creation of the two new
DRGs for tracheostomies with and without surgical procedures does not
create less variation in length of stay and cost per case, there is no
need to split DRG 483 and no need to expand the transfer policy
criteria. The commenters argued that if the split of DRG 483 into more
specific DRGs will better account for variations in the original DRG,
then the historical logic behind the transfer policy in these cases is
no longer valid. Some commenters also believed that the alternate
criteria did not meet the objective of the provision, which is to
ensure that the postacute care transfer policy only subjects high-
volume DRGs to this payment method.
``Some commenters objected to the method by which we proposed the
change in the criteria for DRGs to qualify to be included in the
postacute transfer policy. They argued that CMS should have proposed
the criteria and accepted comment on the alternate criteria and made
appropriate changes based on those comments before applying them to any
additional DRGs. The commenters were concerned that CMS had seemingly
arbitrarily created the alternate set of criteria and applied them to
new DRGs in the same rule. Many commenters also noted that CMS did not
provide enough evidence or substantial analysis to warrant such a
change in policy prior to proposing the alternate criteria and
proposing to apply them. Commenters argued that no analysis has been
done to determine the impacts of last year's changes to the criteria
for the postacute care transfer policy and that to alter the criteria
again the following year, without any analysis of last year's changes,
would be premature.
``Several commenters took issue with changes to the DRG system
having impacts on the postacute care transfer policy. One commenter
stated that, from a clinical perspective, many of the tracheostomy
patients can be `weaned' from the ventilator, and the highest success
rate occurs when the patients are moved `in an expedient fashion' to
postacute care settings where `weaning protocols can be applied.' Other
commenters asked CMS to recognize that `there is no other institute to
transfer these [tracheostomy] patients to' and that `acute hospitals
are the only settings in which they can be cared for.' One commenter
stated that the different case weights of the new DRGs may have
significant financial impacts on providers and that we should
reconsider the assignment of these new DRGs in the policy until
sufficient data are available to determine if they would meet the
existing criteria for inclusion in the policy.
``Some commenters recognized the need to develop an `alternative
method for historic, qualifying transfer DRGs that are eliminated and
remapped into another existing DRG and/or split into two new DRGs due
to annual coding changes or DRG service refinements' to be included in
the postacute care transfer policy. However, they still objected to the
use of the proposed alternate criteria when the first set of criteria
are not met and recommended, as a compromise, that CMS adopt the use of
the alternate criteria only when: (1) Cases in an existing DRG are
remapped or split into two new DRGs, as is the situation with DRG 483;
(2) these cases would remain subject to the postacute care transfer
policy during a `transitional year'; (3) the existing criteria would
apply at the end of this `transitional year'; and (4) the individual
codes or sets of ICD-9-CM diagnosis or procedure codes that are
remapped would not automatically qualify the new DRGs for inclusion in
the postacute care transfer policy unless such mapping would result in
all cases within the new DRG(s) qualifying under the existing criteria.
This approach would exclude the criterion that the DRG(s) meet these
criteria for both of the two most recent fiscal years, as the new
DRG(s) would not have been in existence, and could not have met the
criteria in those years.
``Response: We disagree with some of the points raised by these
commenters. In the proposed rule (69 FR 28273), we clearly indicated
that the alternate criteria to be included in the postacute care
transfer policy still required relatively high volumes of postacute
care transfer cases, as well as very high proportions of short-stay
transfer cases. We specifically chose a very high threshold for the
percent of these postacute care transfer cases that are short-stay
cases in order to avoid including inappropriate DRGs within the
postacute care transfer policy. In many areas of Medicare program
policy, we employ a threshold of one standard deviation or less in
order to qualify for inclusion to or exclusion from certain provisions.
In this instance, we deliberately chose a much higher threshold in
order to ensure that only those DRGs with the highest rate of short-
stay postacute care transfers would be included in the policy.
``However, in light of these and other comments, we are not
adopting the proposed alternate criteria in this final rule. We note
that the postacute care transfer policy was not considered at the time
the decision was made to split DRG 483. We do not intend to change our
rationale for reorganizing DRGs into more coherent groups or to
compromise the clinical cohesiveness of the DRG system in order to
ensure cases are included in or excluded from the postacute care
transfer policy or other CMS policies. We have discussed the reasons
for splitting DRG 483 in section II.B.9. of the proposed rule and in
this final rule. However, we do note that, while these cases will
continue to be
[[Page 60245]]
included in the postacute care transfer policy and subject to per diem
payments, we anticipate that fewer cases will actually receive these
reduced payments as the new DRGs better reflect the resources required
to treat these patients. As a result, hospitals will have less
incentive to discharge these patients to postacute care.
``We also note that, if acute care settings are the only
appropriate place that tracheostomy patients can receive proper care,
as reported by one commenter, then DRG 483 into which these claims fall
would not have a high percentage of short-stay transfers (they
currently account for 42 percent of all transfer cases in this DRG),
and it would not have been included in the postacute care transfer
policy. This commenter's statement is also contrary to another
commenter's statement that we summarized, which stated that the
appropriate place for these patients to be weaned from ventilators is
at postacute care facilities. Lastly, since the postacute care transfer
policy was implemented in FY 1999, we have accumulated 5 years' worth
of data containing these cases. These data show that these cases are
appropriate candidates for the postacute care transfer policy.
``Comment: Other commenters continued to argue that the postacute
care transfer policy goes against the premise of the DRG system that is
intended to pay the average of the costs of all cases in a DRG, short
lengths of stay and longer lengths of stay. The commenters asserted
that to reduce the payment for the shorter stay cases without providing
a mechanism to recover the costs associated with the longer stay cases
(other than outlier payments) is unfair to hospitals. One commenter
quoted the Medicare Guide, which has acknowledged `division of a
prospective payment amount, on a per diem or other basis, undercuts the
principles and objectives of the prospective payment system.'
Commenters also continued to argue that the premise behind the transfer
policy is biased, based on an assumption of gaming by providers, and
that it punishes providers for providing the appropriate level of care
at the right time and place. Commenters argued that the policy creates
an administrative burden on claims processing that has caused payment
delays and `inappropriate denials of hospital bills.' They also noted a
geographic bias against regions that have access to greater capital,
resources, and postacute care facilities, and that traditionally have
had shorter lengths of stay for their patients than other regions of
the country.
``Commenters also argued that the policy should be repealed in its
entirety, rather than expanded, because it creates a perverse incentive
for hospitals to keep patients longer and to deny them appropriate care
in postacute care facilities when it is needed. Many commenters also
argued that CMS has failed to provide analysis showing the continued
need for the postacute care transfer policy, much less the need to
expand it, especially considering that the majority of postacute care
facilities are now paid for in their own prospective payment systems.
Commenters continued to argue that `CMS has presented no evidence that
hospitals are discharging patients before they are ready.'
``Response: We have addressed many of these concerns in previous
rules and continue to find them unconvincing. We again note that the
requirement to treat certain qualified discharges to postacute care as
transfers was added by section 4407 of the Balanced Budget Act of 1997.
That law initially required CMS to identify DRGs with high volumes of
transfer cases to postacute care settings. Since then, we have found
that the policy is quite appropriate and analysis of the use of
postacute care has consistently demonstrated that the frequency of use
of postacute care facilities continues to rise. Although many of the
postacute care facilities are now paid under their own prospective
payment systems, we continue to find that is inappropriate for Medicare
to make two full payments for the treatment of these patients.
Furthermore, we do not believe it is appropriate to reimburse acute
care hospitals at the full DRG amount when many patients who are
transferred to postacute care early do not receive the full care and
build up the same costs at the acute care facility. Therefore, because
the majority of patients comprising short-stay transfers receive the
majority of their care at postacute care facilities, we continue to
believe that full payment to those postacute care facilities and
reduced payment to acute facilities for these cases are merited.
``Comment: Commenters argued that because no analysis had been done
to see if the postacute care transfer policy led to unnecessarily
extended hospital stays in order to avoid the adjustment, no further
expansion of the policy should occur until a full impact analysis is
performed. Commenters asked specifically that the analysis include a
focus on payments, quality of service, and behavioral changes.
``Response: Many studies have been done to analyze the postacute
care transfer policy by MedPAC, the Office of Inspector General, and
others. These studies all support the need for the policy and generally
support expansion of the policy to additional DRGs where appropriate.
The OIG reports specifically address hospital compliance with the
original 10 DRG policy. These reports frequently cite examples of
hospitals that try to avoid the policy requirements by miscoding
transfers as regular discharges. Because medical review is not
frequently done in these audits, the reports do not usually examine
whether hospitals are keeping patients too long to avoid the reduced
payments. We have strongly warned hospitals that keeping patients in
acute care merely to avoid application of the postacute care transfer
policy is inappropriate. Further, we note that the reference to
hospitals gaming the system is the opposite of the gaming that we
normally reference with the policy, but leads to the same result:
inappropriate payments. The commenters' reference to such practices
further demonstrates that we have grounds to believe gaming still
occurs and, therefore the postacute care transfer policy should be
continued and further expansions as indicated by our analysis, should
be considered.
``Comment: Some commenters suggested that in place of the proposed
alternate criteria, we should adopt a policy of keeping cases within
the scope of the postacute care transfer policy permanently once they
initially qualify for inclusion in the policy. These commenters noted
that removing DRGs from the postacute care transfer policy makes the
payment system less stable and results in inconsistent incentives over
time. They also argued that ``a drop in the number of transfers to
postacute settings is to be expected after the transfer policy is
applied to a DRG, but the frequency of transfers may well rise again if
the DRG is removed from the policy.'' Other commenters expressed
concern about our changing of the policy criteria in 2 consecutive
years. These commenters argued that such frequent changes in policy
give the appearance that the policy has been contrived to achieve
certain desired results and make the regulatory process unpredictable
and unfair. They further imply that these ``band-aid fixes'' to the 20-
year old Medicare system do not bode well for the confidence of outside
organizations in regards to the program.
``Response: We did consider grandfathering cases already included
in the policy because this approach is, on the surface, the simplest
method of ensuring these cases continue to be paid
[[Page 60246]]
appropriately. However, we determined that in order to adopt this
approach, we would also need to determine an appropriate timeframe for
the grandfathering period. We did not believe that we could adequately
predict or project what timeframe would be appropriate, not only in the
case of the splitting of DRG 483 into DRGs 541 and 542, but also for
future situations where this kind of split may occur. Therefore, we
tried to develop appropriate, alternative criteria based on actual case
data that could be monitored and applied from year to year.
``However, due to the large number of comments received and the
strong arguments they have raised in favor of a more straightforward
approach, we have decided not to adopt the alternate criteria proposed
in the May 18, 2004 proposed rule. Instead, in this final rule, we are
adopting the policy of simply grandfathering, for a period of 2 years,
any cases that were previously included within a DRG that has split,
when the split DRG qualified for inclusion in the postacute care
transfer policy for both of the previous 2 years. Under this policy,
the cases that were previously assigned to DRG 483, and that will now
fall into DRGs 541 and 542, will continue to be subject to the
postacute care transfer policy for the next 2 years. We will monitor
the frequency with which these cases are transferred to postacute care
settings and the percentage of these cases that are short-stay transfer
cases. Because we are not adopting the proposed alternate criteria for
DRG inclusion in the postacute care transfer policy at this time, DRG
430 (Psychoses) does not meet the criteria for inclusion and will not
be subject to the postacute care transfer policy for FY 2005.
``We appreciate the recommendation to address situations such as
the splitting of DRGs by simply including all cases within the
postacute care transfer policy permanently once they have initially
qualified. While we are not adopting this policy at this time, we will
actively consider it for adoption at a later date. Meanwhile, we
believe that grandfathering the cases formerly included in DRG 483 for
2 years is an appropriate interim measure that ensures a consistent
payment approach to these cases while affording us sufficient time to
undertake a thorough review of this issue. In the meantime, we welcome
comments on how to treat the cases formerly included in a split DRG
after the grandfathering period. We note that, if we were to adopt the
policy recommended by the commenter, cases in DRGs 263 and 264 would
again become subject to the policy. As noted above, these DRGs are
already very close to meeting the criteria required to be re-included
in the policy. However, we will monitor cases until next year or until
such time that another change to this policy is warranted.
``Comment: Several commenters disagreed with our proposal to add
DRG 430 to the list of DRGs subject to the postacute care transfer
policy. They argued that DRG 430 has been in existence since the start
of the postacute care transfer policy and CMS has never previously
considered it appropriate to include this DRG in the policy. Only now
that CMS has proposed to add alternative criteria does it qualify for
inclusion in the policy. Furthermore, they argued that it is unfair for
CMS to remove the potential for $25 million in payments at a time when
hospitals are already having staff shortages and difficulty keeping
nurses and accessing capital to treat patients.
``Response: We note that the number of transfer cases in this DRG
was already near the 14,000 threshold (12,202 transfer cases in our
analysis in the proposed rule using the FY 2003 MedPAR) necessary to
meet the existing criteria. The percentage of short-stay transfer cases
in DRG 430 easily meets the criteria for both the existing criterion
(10 percent) and the proposed alternative criterion (2 standard
deviations above the mean across all DRGs, or 37 percent in FY 2005).
Therefore, we do not believe the addition of this DRG under the
proposed alternative criteria was unjustified. However, as we discuss
in this final rule, we are modifying our proposal in a way that this
DRG will not be added to the postacute care transfer policy.
``The table below displays the 30 DRGs that we are including in the
postacute care transfer policy, effective for discharges occurring on
or after October 1, 2004. This table includes the effects of dropping
DRG 483, which we are deleting from the DRG list, and adding the two
new DRGs 541 and 542 that will now incorporate the cases formerly
assigned to DRG 483. As discussed above, these cases are being
grandfathered into the policy for 2 years. The other DRGs meet the
criteria specified above during both of the 2 most recent years for
which data were available prior to the publication of this final rule
(FYs 2002 and 2003), as well as their paired-DRG if one of the DRGs
meeting the criteria includes a CC/no-CC split.
------------------------------------------------------------------------
DRG DRG title
------------------------------------------------------------------------
12.............................................. Degenerative Nervous
System Disorders.
14.............................................. Intracranial
Hemorrhage and Stroke
with Infarction.
24.............................................. Seizure and Headache
Age > 17 With CC.
25.............................................. Seizure and Headache
Age > 17 Without CC.
88.............................................. Chronic Obstructive
Pulmonary Disease.
89.............................................. Simple Pneumonia and
Pleurisy Age > 17
With CC.
90.............................................. Simple Pneumonia and
Pleurisy Age > 17
Without CC.
113............................................. Amputation for
Circulatory System
Disorders Except
Upper Limb and Toe.
121............................................. Circulatory Disorders
With AMI and Major
Complication,
Discharged Alive.
122............................................. Circulatory Disorders
With AMI Without
Major Complications
Discharged Alive.
127............................................. Heart Failure & Shock.
130............................................. Peripheral Vascular
Disorders With CC.
131............................................. Peripheral Vascular
Disorders Without CC.
209............................................. Major Joint and Limb
Reattachment
Procedures of Lower
Extremity.
210............................................. Hip and Femur
Procedures Except
Major Joint Age > 17
With CC.
211............................................. Hip and Femur
Procedures Except
Major Joint Age > 17
Without CC.
236............................................. Fractures of Hip and
Pelvis.
239............................................. Pathological Fractures
and Musculoskeletal
and Connective Tissue
Malignancy.
277............................................. Cellulitis Age > 17
With CC.
278............................................. Cellulitis Age > 17
Without CC.
294............................................. Diabetes Age > 35.
296............................................. Nutritional and
Miscellaneous
Metabolic Disorders
Age > 17 With CC.
297............................................. Nutritional and
Miscellaneous
Metabolic Disorders
Age > 17 Without CC.
[[Page 60247]]
320............................................. Kidney and Urinary
Tract Infections Age
> 17 With CC.
321............................................. Kidney and Urinary
Tract Infections Age
> 17 Without CC.
395............................................. Red Blood Cell
Disorders Age > 17.
429............................................. Organic Disturbances
and Mental
Retardation.
468............................................. Extensive O.R.
Procedure Unrelated
to Principal
Diagnosis.
541 (formerly 483).............................. Tracheostomy with
Mechanical
Ventilation 96+ Hours
or Principal
Diagnosis Except
Face, Mouth and Neck
Diagnoses With Major
O.R. Procedure.
542 (formerly 483).............................. Tracheostomy with
Mechanical
Ventilation 96+ Hours
or Principal
Diagnosis Except
Face, Mouth and Neck
Diagnoses Without
Major O.R. Procedure.
------------------------------------------------------------------------
``Section 1886(d)(5)(J)(i) of the Act recognizes that, in some
cases, a substantial portion of the costs of care is incurred in the
early days of the inpatient stay. Similar to the policy for transfers
between two acute care hospitals, the transferring hospital in a
postacute care transfer receives twice the per diem rate for the first
day of treatment and the per diem rate for each following day of the
stay before the transfer, up to the full DRG payment. However, three of
the DRGs subject to the postacute care transfer policy exhibit a
disproportionate share of costs very early in the hospital stay in
postacute care transfer situations. For these DRGs, hospitals receive
50 percent of the full DRG payment plus the single per diem (rather
than double the per diem) for the first day of the stay and 50 percent
of the per diem for the remaining days of the stay, up to the full DRG
payment.
``In previous years, we determined that DRGs 209 and 211 met this
cost threshold and qualified to receive this special payment
methodology. Because DRG 210 is paired with DRG 211, we include payment
for cases in that DRG for the same reason we include paired DRGs in the
postacute care transfer policy (to eliminate any incentive to code
incorrectly in order to receive higher payment for those cases). The FY
2003 MedPAR data show that DRGs 209 and 211 continue to have charges on
the first day of the stay that are higher than 50 percent of the
average charges in the DRGs. Therefore, we proposed to continue the
special payment methodology for DRGs 209, 210, and 211 for FY 2005 (69
FR 28274).
``We received no comments on this proposal. Therefore, we will
continue the special payment methodology for these DRGs in FY 2005.
Out-of-Scope Comments
``Comment: One commenter requested that we require physicians and
postacute care facilities to notify the original treating hospital that
a patient has been treated within 3 days at another facility. The
commenter indicated that this step would reduce the burden on hospitals
in relation to the postacute transfer policy.
``Response: While we appreciate the commenter's concern to reduce
the burdens on hospitals, we are reluctant to impose this burden on
other entities, especially since these other entities are not affected
by the payment decisions that are involved.
``Comment: One commenter asked that CMS clarify if the services
included within the scope of the postacute care transfer policy include
activities of daily living, or if the intent of the regulation is only
for skilled services as provided by a SNF (such as physical therapy and
wound care).
``Response: This comment was outside the scope of the proposed
rule. Nevertheless, as stated above, the regulation defines a qualified
discharge for purposes of the postacute care transfer policy as
including a discharge to `[h]ome 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).' We have specified the appropriate time
period during which we will consider a discharge to home health
services to constitute a transfer as within 3 days of the date of
discharge from the hospital. We also believe that, because the service
is required to be related to the condition or diagnosis for which the
individual received inpatient hospital services, the treatment received
from a home health agency that would fall within the purview of the
postacute care transfer policy would be specialized, skilled services
(for example, physical therapy is a standard of care following hip
replacement surgery). However, because some patients are discharged to
home after receiving inpatient care, and because some patients live in
nursing homes that provide assisted living services, these claims would
still be considered transfers if the nursing facility's provider number
indicates that the services provided are skilled in nature (that is, an
SNF rather than a nursing home).''
16. On page 49090, first column, lines 4 through 45, the lines are
deleted.
17. On page 49103, third column, lines 46 through 58, the two
sentences ``In light of its concerns, the commenter recommends that CMS
establish a separate exception for major rural teaching hospitals by
revising Sec. 412.230 to add two provisions. The commenter believes
that adoption of the suggested rules would allow a major teaching
hospital to reclassify to an MSA where a substantial number of its
competing hospitals are located within the same census region, thus
affording them the flexibility to reclassify to an appropriate MSA.''
are corrected to read ``In light of its concerns, the commenter
recommends that CMS establish a separate exception for major rural
teaching hospitals by revising Sec. 412.230 to eliminate the proximity
requirement for rural, major teaching hospitals who seek
reclassification to a large urban area within their census region that
includes 5 or more major teaching hospitals. The commenter also
recommended elimination of the wage comparability test of Sec.
412.230(e)(1)(iii) for rural hospitals that were major teaching
hospitals as of September 30, 2004.''.
18. On page 49104,
a. First column,
(1) Line 48, the phrase ``proximity criteria because'' is corrected
to read ``proximity criteria in Sec. 412.230(b) because'';
(2) Line 55, after the parenthetical phrase ``(Sec.
412.230(a)(3))'', insert the following phrase ``and will generally be
reclassified to the urban area closest to the hospital''; and
(3) Lines 55 through 58, the sentence ``In addition, rural referral
centers (and SCHs) may also reclassify to any MSA to which they qualify
under Sec. 412.230(b).'' is corrected to read ``In the alternative,
RRCs (and SCHs) also have the opportunity to meet the proximity
criteria of Sec. 412.230(b) and seek reclassification to an area for
which they met the proximity rules.''.
b. Second column,
[[Page 60248]]
(1) Line 4, preceding the sentence that begins ``Therefore we are
not'' insert the following sentence:
``We note that under Sec. 412.230(e)(3), RRCs are already exempt
from the criterion in Sec. 412.230(e)(1)(iii) regarding the average
hourly wage.''.
(2) Lines 27 through 33, the sentence ``In keeping with the
proposal to define labor market areas as MSAs, including those in New
England, the criteria and conditions for redesignation set forth in
Sec. 412.230 will be applicable to New England hospitals seeking to
reclassify.'' is corrected to read ``In keeping with our policy of
defining labor market areas as MSAs, including those in New England,
the criteria and conditions for redesignation set forth in Sec.
412.230 will be applicable to individual New England hospitals seeking
to reclassify and the conditions for reclassification as a group set
forth in Sec. 412.234 will be applicable to New England hospitals
seeking to reclassify as a group.''.
(3) Lines 56 through 58, the phrase ``we believe it would be
appropriate to make an adjustment to the hospital's wage index by
assigning,'' is corrected to read ``we proposed to make an adjustment
to certain hospitals' wage indexes by assigning,''.
c. Third column,
(1) Line 10, the phrase ``failed to reclassify'' is corrected to
read ``applied but failed to reclassify'';
(2) Line 15, the phrase ``any hospital whose'' is corrected to read
``we proposed that any hospital whose'';
(3) Line 27, the phrase ``wish to'' is corrected to read ``wished
to''; and
(4) Lines 35 through 48, the text beginning with the phrase ``We
further stated that the notification should only contain:'' and ending
with the phrase ``and FY 2005.'' is corrected by deleting that text;
and
(5) Lines 60 through 68, the two sentences ``We proposed to
exercise the Secretary's authority to provide for `exceptions and
adjustments' to payments under the IPPS. To assign a different wage
index to a group of hospitals that were unable to reclassify because of
a reclassification criterion that is no longer appropriate due to a
statutory change.'' is corrected to read ``We proposed to exercise the
Secretary's authority to provide for `exceptions and adjustments' to
payments under the IPPS to assign a different wage index to a group of
hospitals that applied but were unable to reclassify solely because of
a reclassification criterion that is no longer appropriate due to a
statutory change.''
19. On page 49105,
a. First column,
(1) After line 12 and before line 13, insert the following
paragraph:
``By providing relief only to hospitals that applied but failed to
reclassify as a group under Sec. 412.234 for FYs 2004 and 2005, we are
applying meaningful limits to the scope of the exception. We are
limiting our relief only to hospitals who previously demonstrated the
intent to reclassify and met all of the criteria for group
reclassification but not for the standardized amount reclassification
criterion under Sec. 412.234(c). Moreover, hospitals that submitted a
group application specified their preferences regarding the MSA or MSAs
to which they sought to be reclassified and in this final rule we are
allowing hospitals that qualify under this exception to reclassify only
to the MSA or MSAs specified in the previously submitted group
application. By limiting the exception in this way, hospitals that had
no intent to reclassify in the past will be prevented from submitting
an application for reclassification now based on the reconfiguration of
the MSAs. We note that we did not receive any comments regarding our
decision to limit the scope of the exception to hospitals that had
previously submitted a group application for reclassification.''; and
(2) Lines 15 through 18, the phrase ``hospitals that were unable to
reclassify as a group solely because they failed to meet the
standardized amount criterion in either FY 2004 or FY 2005.'' is
corrected to read ``hospitals with failed applications for either FY
2004 or FY 2005.'';
(3) After line 68, add the following three sentences: ``We believe
these criteria are reasonable because the hospitals that failed to
reclassify are required to compete in their counties with a high number
of hospitals that were successful in reclassifying and who may be able
to pay significantly higher wages because of their higher indexes. In
addition, these hospitals applied for reclassification for FY 2004 or
FY 2005 but failed to receive it solely on the basis of a criterion
that no longer exists due to changes in the statute. (Since
reclassification lasts for a 3-year period, we have allowed hospitals
that sought group reclassification for either FY 2004 or FY 2005, and
who also meet all of the other criteria above, to receive this special
exception.)''.
b. Third column, lines 1 through 8, the phrase ``that are, under
the new MSA designations and the same CMSA under the former MSA
designations qualify as meeting the proximity requirement for
reclassification to the urban area to which they seek redesignation.''
' is corrected to read ``that are in the same Combined Statistical Area
(CSA) (under the MSA definitions announced by the OMB on June 6, 2003);
or in the same Consolidated Metropolitan Statistical Area (CMSA) under
the standards published by the OMB on March 30, 1990) as the urban area
to which they seek redesignation qualify as meeting the proximity
requirement for reclassification to the urban area to which they seek
redesignation.'' '.
20. On page 49106, second column,
(a) Line 57, the phrase ``adjacency and'' is deleted;
(b) Lines 58 and 59, the phrase ``Sec. 412.230(a)(2) therefore, ``
is corrected to read ``Sec. 412.230(a)(2). Therefore, ``; and
(c) Line 62, after the phrase ``to reclassify.'' insert the
following sentence: ``However, RRCs and SCHs, if they wish to, can --in
the alternative-- seek reclassification to an area for which they can
demonstrate close proximity under Sec. 412.230(b).''.
21. On page 49107, third column, line 66, after the phrase ``is
warranted.'' insert the following 2 sentences: ``In addition, given
that many of the hospitals in the low population density States were
already reclassified in accordance with section 508 of Pub. L. 108-173,
we believe it is reasonable to ensure that the SCHs that were not
reclassified are not put at a significant disadvantage. Hospitals that
were not in the low-population density States identified in the section
508 notice will not suffer the same competitive disadvantage vis-
[agrave]-vis other hospitals in their State.''
22. On page 49108, first column,
a. Line 30, the phrase ``hospitals in the area.'' is corrected to
read ``hospitals in the area (not including the hospital itself).'';
and
b. Line 37, the phrase ``hospitals in the area.'' is corrected to
read ``hospitals in the area (not including the hospital itself).''.
23. On page 49115, first column, line 4, the phrase ``with less
than 250 beds'' is corrected to read ``has less than 250 beds''.
24. On page 49116, third column,
a. Line 2, the phrase ``that lent financial support to the
subject'' is corrected to read ``to lend financial support to the
distressed''.
b. Lines 3 through 20, the four sentences ``A formal merger between
the two hospitals has been opposed by the state's Attorney General. The
subject hospital's residency programs have not grown to the level
maintained prior to the petition for closure and the hospital was
training residents well below its FTE resident cap during the reference
[[Page 60249]]
cost reporting period. As such, the hospital believes that its FTE
resident caps will be reduced pursuant to section 422. The commenter
requests that the hospital be exempt from FTE resident cap reductions
and that this exemption extend to the Medicare GME affiliated group of
which the hospital is a part of to preserve the group's future ability
to build their teaching programs.'' are corrected to read ``A formal
merger between the two hospitals was desired by the hospitals, but has
been opposed by the State's Attorney General. The distressed hospital's
residency programs have not grown to the level that was maintained
prior to the petition for closure and, thus, the number of FTE
residents the hospital was training is well below its FTE resident cap
during the reference cost reporting period. As such, the hospital
believes that its FTE resident caps will be reduced in accordance with
section 1886(h)(7)(A) of the Act. The commenter requested that the
hospital be exempt from the FTE resident cap reductions and that this
exemption extend to the Medicare GME affiliated group of which the
hospital is a part in order to preserve the group's future ability to
build its teaching programs.''.
25. On page 49130,
a. First column, entire columns (lines 1 through 64) the text
beginning with the phrase ``regarding affiliated groups (63 FR 26338)''
and ending with the phrase ``basis, a hospital had trained fewer'' is
corrected to read ``regarding affiliated groups at Sec. Sec. 413.86(b)
and (g)(4)(iv), (also described at 63 FR 26338, May 12, 1998), we note
that a single hospital could have several Medicare GME affiliation
agreements with several different `affiliated groups.' However, for
purposes of applying the provision at section 1886(h)(7)(A)(iii) of
Act, we will use a broader definition of the affiliated group.
Specifically, for purposes of comparing aggregate FTE resident caps to
aggregate FTE counts, we will include every hospital that has an
affiliation agreement (as of July 1, 2003) in common with any other
hospital (the commonly affiliated group). Then, for direct GME and IME
respectively, the fiscal intermediaries will identify the `1996' FTE
resident caps (subject to permanent adjustments for new programs, if
applicable), and the unweighted allopathic and osteopathic FTE resident
counts for each hospital that is part of that commonly affiliated group
for each affiliated hospital's cost report that includes July 1, 2003.
(Note that since the 1996 cap and FTE count information from the cost
report that includes July 1, 2003 is being used for purposes of section
1886(h)(7)(iii) of the Act, the caps as amended in accordance with the
July 1, 2003 affiliation agreement are irrelevant for this portion of
the analysis). In many cases, the hospitals in the commonly affiliated
group will not all have the same fiscal year end (FYE). Therefore, for
example, for a hospital with a FYE of June 30, the fiscal intermediary
will identify the FTE resident cap (that is, the `1996' cap, subject to
permanent adjustments for new programs, if applicable) and the
unweighted allopathic and osteopathic FTE resident count from the
hospital's FYE June 30, 2004 cost report. For a hospital with a FYE of
December 31, the fiscal intermediary will identify, for IME and direct
GME, respectively, the FTE resident cap (that is, the `1996' cap,
subject to permanent adjustments for new programs, if applicable) and
the unweighted allopathic and osteopathic FTE resident count from the
hospital's FYE December 31, 2003 cost report. Next, the fiscal
intermediary will add the FTE resident caps for all the hospitals in
the commonly affiliated group to determine the aggregate FTE resident
cap, and will add the FTE resident counts from all those hospitals'
cost reports that include July 1, 2003, to determine the aggregate FTE
resident count for the commonly affiliated group. If the aggregate FTE
resident count for the commonly affiliated group is equal to or exceeds
the aggregate FTE resident cap, then no reductions would be made under
section 1886(h)(7)(A)(i) of the Act to the FTE resident caps of any of
the hospitals in the commonly affiliated group. Each hospital's FTE
resident cap would not be reduced effective July 1, 2005, even if, on a
hospital-specific basis, a hospital trained fewer'';
b. Second column, the entire column (lines 1 through 63), the text
beginning with the phrase ``residents in its cost report that
includes'' and ending with the figure ``3.04.'' is corrected to read
``residents in its cost reporting period that includes July 1, 2003,
than its adjusted `affiliated' cap. However, if the aggregate FTE
resident count for the commonly affiliated group is below its aggregate
FTE resident cap, there would be a reduction in FTE resident cap(s)
that is equal to 75 percent of the difference between the aggregate FTE
resident cap and the aggregate FTE resident count for the commonly
affiliated group. In these cases, for each hospital in the commonly
affiliated group, the fiscal intermediary will determine the following
information for the cost report that includes July 1, 2003:
(1) The individual hospital's `1996' FTE resident cap (subject to
permanent adjustments for new programs, if applicable)--for IME from
worksheet E, Part A of the Medicare cost report, the sum of lines 3.04
and 3.05; for direct GME from worksheet E-3, Part IV of the Medicare
cost report, the sum of lines 3.01 and 3.02.
(2) The individual hospital's `affiliated' FTE resident cap--for
IME, line 3.07 of worksheet E, Part A; for direct GME, line 3.04 of
worksheet E-3 Part IV.
(3) The individual hospital's total number of allopathic and
osteopathic FTE residents--for IME, line 3.08; for direct GME, line
3.05.
(4) For IME and GME, respectively, the difference between the
aggregate 1996 FTE resident cap and the aggregate FTE resident count
for all of the commonly affiliated hospitals--for IME, [Sigma] line
3.08 minus [Sigma] (lines 3.04 + 3.05); for direct GME, [Sigma] line
3.05 minus [Sigma] (lines 3.01 + 3.02). Note, if the aggregate FTE
resident count is greater than or equal to the aggregate 1996 FTE
resident cap, stop here; there will be no reduction under section
1886(h)(7)(A)(i) of the Act to the FTE resident cap of any individual
hospital within the commonly affiliated group. Alternatively, if the
aggregate FTE resident count is less than the aggregate 1996 FTE
resident cap, the aggregate reduction under section 1886(h)(7)(A)(i) of
the Act to the FTE resident caps for hospitals in the commonly
affiliated group will be based on this calculation; reductions to
individual hospitals are calculated as indicated below.
(5) For IME, for those hospitals whose FTE resident count from line
3.08 is greater than or equal to the `affiliated' FTE resident cap on
line 3.07, indicate 'zero.' For direct GME, for those hospitals whose
FTE resident count from line 3.05 is greater than or equal to the
``affiliated'' FTE resident cap on line 3.04, indicate `zero.' For IME,
for those hospitals whose FTE resident count from line 3.08 is less
than the `affiliated' FTE resident cap on line 3.07, calculate the
difference between the hospital's `affiliated' FTE resident cap and the
hospital's FTE resident count--line 3.08 minus line 3.07. For direct
GME, for those hospitals whose FTE resident count from line 3.05 is
less than the `affiliated' FTE resident cap on line 3.04, calculate the
difference between the hospital's `affiliated' FTE resident cap and the
hospital's FTE resident count--line 3.05 minus line 3.04.
c. Third column, the entire column (lines 1 through 63), the text
beginning with the phrase ``(6) For IME and direct GME'' and ending
with the phrase ``table below.'' is corrected to read as follows:
[[Page 60250]]
``(6) For IME and direct GME, respectively, determine the total
amount by which the aggregate `affiliated' FTE resident count for the
commonly affiliated group is below the aggregate FTE resident cap for
the group by adding together the amounts determined for each hospital
under step 5.
``(7) For IME and direct GME, respectively, calculate a pro rata
cap reduction for each hospital by dividing the hospital-specific
amount calculated in step 5 by the total for all of the commonly
affiliated hospitals calculated in step 6, and multiply by the total
amount calculated in step 4 (that is, (step 5/step 6) x step 4)).
``(8) For IME and direct GME, respectively, determine the reduction
to the FTE resident cap for each hospital under section
1886(h)(7)(A)(i) of the Act by multiplying the pro rata cap reduction
from step 7 by 0.75.
``(9) For IME and direct GME, respectively, determine the FTE
resident cap for each hospital by subtracting the reduction to the FTE
resident cap calculated in step 8 from the `1996' FTE resident cap in
step 1. This is the hospital's FTE resident cap effective July 1, 2005.
``The following is an example of how the reductions to the FTE
resident caps will be determined where the aggregate FTE resident
counts for hospitals in a commonly affiliated group as of July 1, 2003
are below the hospitals' aggregate FTE resident caps for the hospitals'
cost reporting periods that include July 1, 2003. (This example
illustrates reductions to the IME caps only, but the methodology is the
same for reductions to the direct GME caps):
``Hospitals A, B, and C are affiliated for the academic year
beginning July 1, 2003. Hospital C is also affiliated with Hospitals D
and E for the academic year beginning July 1, 2003. Thus, the commonly
affiliated group for purposes of determining possible FTE cap
reductions under section 1886(h)(7)(A)(iii) of the Act consists of
Hospitals A, B, C, D, and E. Hospital A's and B's cost report that
includes July 1, 2003 is their FYE June 30, 2004. Hospital C's and D's
cost report that includes July 1, 2003 is their FYE December 31, 2003,
and Hospital E's cost report that includes July 1, 2003 is its FYE
September 30, 2003. Using steps 1 through 9 above, the reductions to
the FTE resident caps of those hospitals in the affiliated group that
trained a number of FTE residents in their cost reporting period that
includes July 1, 2003, that is below their `affiliated' FTE resident
caps are determined in the table below.''
26. On page 49131,
a. First column,
(1) Lines 1 and 2, the phrase ``trained residents'' is corrected to
read ``trained a number of residents'';
(2) Lines 16 through 18, the phrase ``minimizes the reductions to
Hospital D's and E's `1996' FTE resident caps through the calculation
of a pro rata'' is corrected to read ``partially offsets the reduction
to Hospital D's and E's FTE resident caps through the application of a
pro rata'';
(3) Line 22, the phrase ``the actual cap reduction'' is corrected
to read `` the cap reduction'';
(4) Lines 33 through 44, the sentence ``We note that the total
final FTE resident cap effective July 1, 2005 is 410 FTEs ( the total
under step 9), which, mathematically, is the same as subtracting 400
(the total FTEs trained in the group) from 440 (the aggregate ``1996''
FTE residents caps) multiplying by 75 percent, and subtracting the
result from the original aggregate cap of 440 (that is, [440-(0.75
(440-400))] = 410).'' is corrected to read ``We note that the aggregate
total final FTE resident cap for the hospitals in the commonly
affiliated group, effective July 1, 2005, is 410 (the total under step
9), which, mathematically, is the same as subtracting 400 (the
aggregate total FTE residents trained in the group) from 440 (the
aggregate ``1996'' FTE resident caps), multiplying by 75 percent, and
subtracting the result from the original aggregate FTE resident cap of
440 (440-(0.75(440-400))] = 410).''; and
(5) Lines 44 through 49 and second column, lines 1 through 11,
delete the paragraph that begins ``We also note that the reductions
to''.
b. Second column, lines 12 through 49 and third column lines 1
through 12, the paragraph that begins with the phrase ``We believe''
and ends with the phrase ``of the Act.'' is corrected to read ``We
believe this final policy concerning the application of sections
1886(h)(7)(A)(i) and (iii) of the Act to hospitals that are affiliated
`as of July 1, 2003' addresses the commenters' concerns in that it
protects hospitals from any reduction in their FTE resident caps if the
aggregate FTE resident counts for the commonly affiliated group equal
or exceed the aggregate FTE resident caps, and, in some cases, can
limit the reductions in FTE resident caps. We believe this final policy
also addresses the commenters' concerns that hospitals in an affiliated
group as of July 1, 2003, should be allowed to modify their affiliation
agreements as late as June 30, 2004, in order to reflect the resident
rotations that actually occurred among the affiliated hospitals, and
that the policy should be applied using a contemporaneous comparison of
FTE resident counts and affiliated caps. Under our final policy, we
will use the hospitals' affiliated FTE resident caps as reported on the
cost report, which allows for modifications to the July 1, 2003,
affiliation agreement by June 30, 2004, and a comparison of
contemporaneous FTE resident caps and counts. The commenters also
requested that we provide an extra opportunity for hospitals that were
affiliated ``as of July 1, 2003'' to modify their affiliation
agreements after publication of the final rule, if the final policy is
significantly different from the proposed policy. We do not believe it
is appropriate to allow hospitals to modify their affiliation
agreements after publication of the final rule. The only reason we
allow hospitals to modify their agreements by June 30 of an academic
year is to allow adjustment to the FTE counts of each hospital in the
affiliation to reflect the realities of the cross-training that
occurred within that academic year. Thus, the decision as to whether or
not an affiliation agreement should be modified should be based solely
on whether the FTE counts first reflected in the affiliation agreement
on July 1 of a year differ from the actual FTEs that trained at each
hospital during the year. We expect that if affiliated hospitals
experienced changes in resident rotations during the academic year that
were not reflected in their affiliation agreement, they would have
modified their affiliation agreement by the conclusion of the academic
year as is permitted under our current policy. We do not believe it is
appropriate to allow an additional opportunity for hospitals to modify
their affiliation agreements for other purposes.''.
c. Third column,
(1) Lines 15 through 17, the phrase ``located in an other than
large urban area is part of an affiliated group as of July 1, 2003 with
a rural hospital that has'' is corrected to read ``located in an `other
than large' urban area is part of an affiliated group as of July 1,
2003, that includes a rural hospital that has'';
(2) Lines 18 through 26, the sentence ``The commenter stated that
while the rural hospital is exempt from reductions to its FTE resident
caps, the urban hospital could be `penalized' because of the slots
acquired under the affiliation agreement with the rural hospital, if
the urban hospital did not fill all of those slots in its reference
cost reporting period.'' is corrected to read ``The commenter stated
that, while the rural hospital is exempt from reductions to its FTE
resident caps, the urban hospital could be `penalized' if, in its
reference cost reporting period, the urban hospital
[[Page 60251]]
did not fill all of the slots it acquired under the affiliation
agreement with the rural hospital.'';
(3) Line 18, the phrase ``that CMS carve out'' is corrected to read
``that CMS `carve out.'''; and
(4) Line 34, the phrase ``of unused residency slots'' is corrected
to read ``of ``unused'' residency slots''.
(5) Lines 39 through 41, the phrase ``we cannot exempt other
hospitals outright from possible reductions to their FTE resident
caps.'' is corrected to read ``section 1886(h)(7)(A) of the Act does
not provide for exemptions from possible reductions to FTE resident
caps.'';
(6) Line 44, the phrase ``part of an affiliated group'' is
corrected to read ``part of a commonly affiliated group''; and
(7) Line 50, the phrase ```1996''' FTE resident caps'' is corrected
to read ``FTE resident caps''.
27. On page 49132,
a. First column
(1) Lines 3 through 11, the sentence ``But if the aggregate FTE
resident counts are below the aggregate ``affiliated'' FTE resident
caps, then (except for rural hospitals with less than 250 beds), a
hospital in the affiliated group that trained less FTE residents than
its individual ``affiliated'' FTE resident cap would have its ``1996''
FTE resident cap reduced'' is corrected to read ``However, if the
group's aggregate FTE resident count is below its aggregate FTE
resident cap, then (except for rural hospitals with less than 250
beds), a hospital in the affiliated group that trained fewer FTE
residents than its individual ``affiliated'' FTE resident cap would
have its FTE resident cap reduced under section 1886(h)(7)(A)(i) of the
Act.'';
(2) Lines 15 through 21, the phrase ``the hospital(s) with which it
was affiliated as of July 1, 2003, the aggregate FTE resident counts
were below the aggregate `affiliated' FTE resident caps and the urban
hospital was also training fewer residents than its `affiliated' cap.''
is corrected to read ``the hospital(s) that are part of its commonly
affiliated group as of July 1, 2003, the aggregate FTE resident counts
were below the aggregate FTE resident caps and the urban hospital was
also training fewer residents than its `affiliated' cap.''; and
(3) Lines 21 through 38, the two sentences ``However, since the
rural hospital's FTE resident caps are protected from reductions under
section 1886(h)(7)(A)(i)(II) of the Act, the urban hospital could
continue to affiliate with the rural hospital on and after July 1,
2005, and, to the extent that the rural hospital has FTE slots
available to ``lend'' to the urban hospital, the urban hospital could
receive a temporary increase to its FTE resident caps via the
affiliation agreement with the rural hospital. Therefore, although this
urban hospital may lose slots under section 1886(h)(7)(A)(i) of the
Act, it may be able to receive additional slots temporarily by
affiliating with the rural hospital.'' are corrected to read ``Since
the rural hospital's FTE resident caps are protected from reductions
under section 1886(h)(7)(A)(i)(II) of the Act, its FTE resident cap
would not be reduced regardless of the comparison between its FTE
resident counts and caps. Thus, the urban hospital could continue to
affiliate with the rural hospital on and after July 1, 2005, and, to
the extent that the rural hospital has FTE slots available within its
FTE resident cap to ``lend'' to the urban hospital, the urban hospital
could receive a temporary increase to its FTE resident caps via an
affiliation agreement with the rural hospital. Therefore, although this
urban hospital's FTE resident cap may be subject to reduction under
section 1886(h)(7)(A)(i) of the Act, the hospital may be able to
receive a temporary adjustment to its FTE resident cap by affiliating
with the rural hospital in subsequent academic years.''
(4) Lines 43 through 69 and the second column lines 1 through 30,
the text beginning with the phrase ``Comment: One commenter noted
that'' and ending with the phrase ``the reference affiliated resident
FTE cap.'' is corrected to read:
``Comment: One commenter noted that in the May 18, 2004 proposed
rule (69 FR 28297), a hospital's reference resident level would be
compared to the hospital's reference FTE resident cap as adjusted by
applicable Medicare GME affiliation agreements. The commenter asked for
clarification regarding the treatment of a hospital that, absent an
affiliation agreement, has an FTE resident cap of zero, but the
hospital received a temporary increase to its FTE resident cap by
participating in a Medicare GME affiliated group. The commenter stated
that in its reference period, the hospital's resident level was below
its FTE cap as adjusted by the affiliation agreement and asked if, as a
result, CMS would reduce its FTE resident cap below zero.''
``Response: An FTE resident cap would not be reduced below zero.
That is, if the hospital's cap without any adjustment under an
affiliation agreement is zero, the hospital's FTE resident cap would
not be reduced to a negative number if its reference resident level is
below the affiliated resident FTE cap for the reference period.''.
28. On page 49139, first column, lines 15 and 16, the phrase ``As
we have stated in this final rule, each application by a hospital'' is
corrected to read ``Each application by a hospital''.
29. On page 49148, first column, lines 36 and 37, the phrase
``score of 4 (expanding geriatrics program, Medicare physician scarcity
area, residents'' is corrected to read ``score of 5 (expanding
geriatrics program, which is also a primary care program, Medicare
physician scarcity area, residents''.
30. On page 49149, first column, line 12, the citation ``Sec.
413.75(b)'' is corrected to read ``existing Sec. 413.86(b)''.
31. On page 49158, second column,
a. Line 47, the phrase ``a criterion'' is corrected to read ``a
`bright line ` criterion''.
b. Line 56, at the end of the sentence add the following sentence
``The commenter stated that contrary to the authority provided to CMS
in section 422 of Pub. L. 108-173, the agency's proposal would result
in the redistribution of these resident positions in `some wholesale
manner'.''
32. On page 49159, second column, lines 55 through 61, the sentence
``The Congress did, however, recognize the unique status of reductions
in FTE resident counts attributable to a hospital's participation in a
demonstration project or the VRRP in the statute at section
1886(h)(7)(B)(vi) of the Act.'' is deleted.
33. On page 49165, last bulleted item, last line, the phrase ``in
its existing programs.'' is corrected to read `` in its existing
programs or the 2004 fill rate information of all of the programs at
the hospital.''
34. On page 49168, fourth boxed paragraph C11, last line, the
phrase ``defined under 413.75(b)'' is corrected to read ``defined under
existing Sec. 413.86(b).''
35. On page 49172,
a. Second column, lines 26 through 38, the phrase ``effective
October 1, 2004, if a hospital can document that a particular resident
matches simultaneously for a first year of training in a clinical base
year, and for a second year of training in the specialty program in
which the resident intends to seek board certification, the resident's
initial residency period would be based on the specific specialty
program for the subsequent year(s) of training in which the resident
matches and not on the clinical base year program.'' is corrected to
read ``effective for portions of cost reporting periods beginning on or
after October 1, 2004, if a hospital can document that a particular
resident
[[Page 60252]]
matches simultaneously for a first year of training in a clinical base
year, and for a second year of training in a different specialty
program, the resident's initial residency period would be based on the
specific specialty program for the subsequent year(s) of training in
which the resident matches and not on the clinical base year program.''
b. Third column, line 44, the phrase ``we are able to'' is
corrected to read ``under current policy, we have been able to''.
c. Third column, line 65, ``effective October 1, 2004'' is
corrected to read, ``effective for portions of cost reporting periods
beginning on or after October 1, 2004.''
36. On page 49178, third column, lines 48 and 49, the phrase ``to
financial intermediaries'' is corrected to read ``to fiscal
intermediaries''.
37. On page 49180,
a. First column, line 3, the phrase ``we are also proposing'' is
corrected to read ``we also proposed''.
b. Third column, lines 18 and 19, the phrase ``because we are
proposing to'' is corrected to read ``because we proposed to''.
38. On page 49219,
a. Second column, line 62, the citation ``Sec. 485.649'' is
corrected to read ``Sec. 485.647'';
b. Third column, line 1, the phrase ``to clarify that. Payment to
the CAH for'' is corrected to read ``to clarify that payment to the CAH
for''.
39. On page 49221, third column, line 53, the date ``December 31,
2005'' is corrected to read ``September 30, 2006''.
40. On page 49222, first column, line 22, the phrase ``Sec.
489.24(d) to Sec. 489.24(d)'' is corrected to read ``Sec. 489.24(d)
to Sec. 489.24(e)''.
Corrections to the Regulations Text
Sec. 412.22 [Corrected]
0
41. On page 49240, third column, in Sec. 412.22 paragraph (e)(1)
introductory text is corrected to read:
* * * * *
(1) Except as specified in paragraph (f) of this section, for cost
reporting periods beginning on or after October 1, 1997--
* * * * *
Sec. 412.103 [Corrected]
0
42. On page 49244, third column, line 2, in Sec. 412.103(a)(4), the
date ``January 1, 2004'' is corrected to read ``October 1, 2006''.
Sec. 412.230 [Corrected]
0
43. On page 49249,
0
a. First column, 1. In the amendatory instruction 21 for Sec. 412.230,
the instruction, ``I. Revising redesignated paragraphs (d)(3)(i),
(d)(3)(ii), and adding (d)(3)(iii(C).'' is corrected to read ``I.
Revising redesignated paragraphs (d)(3)(i), (d)(3)(ii), revising
paragraph (d)(3)(iii) (B) and adding paragraph (d)(3)(iii)(C).''; and
0
2. In Sec. 412.230(a)(1)(ii), lines 3 and 4, the phrase ``from a rural
area to another urban area'' is corrected to read ``from an urban area
to another urban area''.
0
b. Second column,
1. Section 412.230(d)(3)(ii) is corrected by adding the following
paragraph (d)(3)(ii)(B):
* * * * *
(B) With respect to redesignations for Federal fiscal years 2002
through 2005, the hospitals 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 area in which the hospital is
located.
* * * * *
0
2. In Sec. 412.230(d)(3)(iii) (C), the phrase ``108 percent'' is
corrected to read ``at least 108 percent''.
Sec. 412.232 [Corrected]
0
3. In Sec. 412.232(a)(1)(i), the year ``2005'' is corrected to read
``2006'';
0
4. In Sec. 412.232(a)(1)(ii), the phrase ``fiscal years 2005'' is
corrected to read ``fiscal year 2006''; and
0
5. In Sec. 412.232(a)(4)(ii), the year ``2005'' is corrected to read
``2006''.
Sec. 412.312 [Corrected]
0
44. On page 49250, second column, in Sec. 412.312(e)(3), the cross-
reference ``Sec. 412.348(c)'' is corrected to read ``Sec.
412.348(e)'' in two places.
Sec. 413.77 [Corrected]
0
45. On page 49258, first column, Sec. 413.77(f) is corrected to read
as follows:
* * * * *
(f) Residency match. Effective for portions of cost reporting
periods beginning on or after October 1, 2004, with respect to a
resident who matches simultaneously for a first year of training in a
primary care specialty, and for an additional year(s) of training in a
nonprimary care specialty, the per resident amount that is used to
determine direct GME payment with respect to that resident is the
nonprimary care per resident amount for the first year of training in
the primary care specialty and for the duration of the resident's
training in the nonprimary care specialty.
* * * * *
Sec. 413.79 [Corrected]
0
46. On page 49259, second column, Sec. 413.79(a)(10) is corrected to
read as follows:
* * * * *
(a) * * *
(10) Effective for cost reporting periods beginning on or after
October 1, 2004, if a hospital can document that a resident
simultaneously matched for one year of training in a particular
specialty program, and for a subsequent year(s) of training in a
different specialty program, the resident's initial residency period
will be determined based on the period of board eligibility associated
with the program for which the resident matched for the subsequent
year(s) of training.
* * * * *
Sec. 485.610 [Corrected]
0
47. On page 49271,
0
a. Second column, Sec. 485.610 is corrected by deleting paragraph
(b)(3).
0
b. Third column,
0
1. In Sec. 485.610(c), in the last line, the phrase ``after October 1,
2006'' is corrected to read ``after January 1, 2006''; and
Sec. 485.620 [Corrected]
0
2. In Sec. 485.620(a), the cross-reference ``Sec. 485.646'' is
corrected to read ``Sec. 485.647''.
Corrections to the Addendum
48. On page 49277,
a. First column,
(1) Lines 17 and 18, the phrase ``hearings and investigations,
significant charge increases by hospitals, charges'' is corrected to
read ``hearings and investigations concerning significant charge
increases by hospitals, charges''; and
(2) Second full paragraph, lines 61 through 65, the sentence,
``This problem has now been resolved and along with the reasons stated
above recommended that revert to a methodology using costs when
calculating the annual outlier threshold.'' is corrected to read
``Because this problem has now been resolved, and for the reasons
stated above, the commenter recommended that we revert to a methodology
using costs when calculating the annual outlier threshold.''
b. Third column, line 69, the phrase ``data in updating charges,
themselves.'' is corrected by removing the comma to read ``data in
updating charges themselves.''
49. On page 49278, third column,
a. Line 35 the figure ``3.5'' is corrected to read ``3.6''; and
b. Line 36, the figure ``1.6'' is corrected to read ``1.5''.
[[Page 60253]]
50. On page 49290, second column, line 22 the figure ``$199.02'' is
corrected to read ``$199.01''.
51. On pages 49612 through 49622, in Table 6A--New Diagnosis Codes
the table is corrected by revising column 4 for listed entries to read
as follows:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR07OC04.000
[[Page 60254]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.001
[[Page 60255]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.002
[[Page 60256]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.003
[[Page 60257]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.004
[[Page 60258]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.005
[[Page 60259]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.006
[[Page 60260]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.007
[[Page 60261]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.008
[[Page 60262]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.009
[[Page 60263]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.010
[[Page 60264]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.011
[[Page 60265]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.012
[[Page 60266]]
52. On page 49628, in Table 6C.--Invalid Diagnosis Codes, the table
is corrected by adding the following footnote at the end of the table:
109 Assigned to the Secondary Diagnosis list that
defines a Major Complication.
53. On page 49631, in Table 6E.--Revised Diagnosis Code Titles,
fourth entry, the MDC (column 4) is revised to read as follows:
----------------------------------------------------------------------------------------------------------------
Diagnosis code Description CC MDC DRG
----------------------------------------------------------------------------------------------------------------
250.63.............................. Diabetes with Y PRE 512,513
neurological 1 18,19.
manifestations, type I
[juvenile type],
uncontrolled.
----------------------------------------------------------------------------------------------------------------
54. On page 49640, in Table 6E.--Revised Diagnosis Code Titles, the
table is corrected by adding the two footnotes at the end of the table
to read as follows:
1 Classified as a Major Problem.
2 Classified as a Major Related Condition.
55. On page 49641, in Table 6F.--Revised Procedure Code Titles,
second and third entry, the MDC (column 4) is revised to read as
follows:
----------------------------------------------------------------------------------------------------------------
Procedure code Description OR MDC DRG
----------------------------------------------------------------------------------------------------------------
01.22............................. Removal of Y 1 1, 2, 3.
intracranial 17 406, 407, 539, 540.
neurostimulator
lead(s).
02.93............................. Implantation or Y 1 1, 2, 3.
replacement of 17 406, 407, 539, 540.
intracranial 21 442, 443.
neurostimulator 24 486.
lead(s).
----------------------------------------------------------------------------------------------------------------
56. On pages 49738 through 49754, Table 11.--FY 2005 LTC-DRGs,
Relative Weights, Geometric Average Length Of Stay, and \5/6\ths of the
Geometric Average Length of Stay, the table is corrected to read as
follows:
[[Page 60267]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.013
[[Page 60268]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.014
[[Page 60269]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.015
[[Page 60270]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.016
[[Page 60271]]
[GRAPHIC] [TIFF OMITTED] TR07OC04.017
BILLING CODE 4120-01-C
IV. Correction of Errors in Wage Index, Geographic Reclassification,
and IPPS Payment Rate Tables and Related Addendum Language
We are correcting technical errors in the tables and addendum
language of the FY 2005 final rule relating to the wage indexes,
geographic reclassifications, IPPS payment rates. CMS and the fiscal
intermediaries made errors in handling the data used to calculate
certain average hourly wages, wage indexes, and capital geographic
adjustment factors published in Tables 2, 3A1,
3A2, 3B1, 3B2, 4A1,
4A2, 4B1, 4B2, 4C1,
4C2, 4G, 4H. This mishandling of data also caused technical
errors in the average hourly wage data comparison used to formulate the
list of counties qualifying for the out-migration adjustment published
in Table 4J.
In addition, there were technical errors in hospital geographic
reclassification data displayed in Tables 9A1 and
9A2. We also inadvertently omitted information and made
typographical errors in several of the entries published in Table 9B.
We have corrected the errors in the wage tables and geographic
reclassification tables. These corrected tables are posted and
available on the CMS Web site at: http://www.cms.hhs.gov/providers/hipps/ippswage.asp. These corrected tables are effective for discharges
occurring on or after October 1, 2004. We note that the corrected
tables, addendum language and revised impact analysis, will be included
in a forthcoming correction notice to be published in the Federal
Register.
As a result of the revisions to the wage index tables, the FY 2005
hospital inpatient PPS operating and capital payment rates, published
in Table 1A, 1B, 1C, and 1D also have been revised. The revised rates
are posted and available on the CMS Web site at: http://www.cms.hhs.gov/providers/hipps/. The corrections to the hospital
inpatient PPS operating and capital payment rates are effective for
discharges occurring on or after October 1, 2004. We note that the
corrected payment rate tables will also be published in the Federal
Register.
V. Waiver of Proposed Rulemaking and Delay in Effective Date
We ordinarily publish a notice of proposed rulemaking in the
Federal Register to provide a period for public comment before the
provisions of a rule take effect in accordance with section 553(b) of
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). We also
ordinarily provide a 30-day delay in the effective date of the
provisions of a
[[Page 60272]]
notice in accordance with section 553(d) of the APA (5 U.S.C. 553(d)).
However, we can waive both the notice and comment procedure and the 30-
day delay in effective date if the Secretary finds, for good cause,
that a notice and comment process is impracticable, unnecessary or
contrary to the public interest, and incorporates a statement of the
finding and the reasons therefore in the notice.
The policies and payment methodology expressed in the FY 2005 final
rule have previously been subjected to notice and comment procedures.
This correction notice merely provides technical corrections to the FY
2005 final rule that was promulgated through notice and comment
rulemaking, and does not make substantive changes to the policies or
payment methodology that were expressed in the final rule. For example,
this notice corrects typographical errors, inserts comments and
responses that were inadvertently omitted from the final rule, makes
clarifications to the preamble and regulations text, and revises
inaccurate tabular data. Therefore, we find it unnecessary to undertake
further notice and comment procedures with respect to this correction
notice. We also believe it is in the public interest to waive notice
and comment procedures and the 30-day delay in effective date for this
notice. This correction notice is intended to ensure that the FY 2005
final rule accurately reflects the policies expressed in the final
rule, and that the corrected information is made available to the
public prior to October 1, 2004, the date on which the final rule
becomes effective.
For the reasons stated above, we find that both notice and comment
and the 30-day delay in effective date for this correction notice are
unnecessary and impracticable, and that it is in the public interest to
make this notice effective in conjunction with the final rule to which
the corrections apply (and would be contrary to the public interest to
do otherwise). Therefore, we find there is good cause to waive notice
and comment procedures and the 30-day delay in effective date for this
correction notice.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: September 30, 2004.
Ann C. Agnew,
Executive Secretary to the Department.
[FR Doc. 04-22389 Filed 9-30-04; 4:44 pm]
BILLING CODE 4120-01-P