Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2008, 26230-26279 [07-2241]

Download as PDF 26230 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 412 [CMS–1551–P] RIN 0938–AO63 Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2008 Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Proposed rule. cprice-sewell on PROD1PC64 with PROPOSALS3 AGENCY: SUMMARY: This proposed rule would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for Federal fiscal year (FY) 2008 (for discharges occurring on or after October 1, 2007 and on or before September 30, 2008) as required under section 1886(j)(3)(C) of the Social Security Act (the Act). Section 1886(j)(5) of the Act requires the Secretary to publish in the Federal Register on or before the August 1 that precedes the start of each fiscal year, the classification and weighting factors for the IRF prospective payment system’s (PPS) case-mix groups and a description of the methodology and data used in computing the prospective payment rates for that fiscal year. We are proposing to revise existing policies regarding the PPS within the authority granted under section 1886(j) of the Act. DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on July 2, 2007. ADDRESSES: In commenting, please refer to file code CMS–1551–P. Because of staff and resource limitations, we cannot accept comments by facsimile (Fax) transmission. You may submit comments in one of four ways (no duplicates, please): 1. Electronically. You may submit electronic comments on specific issues in this regulation to https:// www.cms.hhs.gov/eRulemaking. Click on the link ‘‘Submit electronic comments on CMS regulations with an open comment period.’’ (Attachments should be in Microsoft Word, WordPerfect, or Excel; however, we prefer Microsoft Word.) 2. By regular mail. You may mail written comments (one original and two copies) to the following address only: Centers for Medicare & Medicaid Services, Department of Health and VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 Human Services, Attention: CMS–1551– P, P.O. Box 8012, Baltimore, MD 21244– 8012. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments (one original and two copies) to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1551–P, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD 21244–8012. 4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) before the close of the comment period to one of the following addresses. If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786– 7195 in advance to schedule your arrival with one of our staff members. Room 445–G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD 21244–1850. (Because access to the interior of the HHH Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Pete Diaz, (410) 786–1235, for information regarding the 75 percent rule. Susanne Seagrave, (410) 786–0044, for information regarding the payment policies. Zinnia Ng, (410) 786–4587, for information regarding the wage index and prospective payment rate calculation. SUPPLEMENTARY INFORMATION: Submitting Comments: We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. You can assist us by referencing the file code CMS–1551–P and the specific ‘‘issue identifier’’ that precedes the section on which you choose to comment. Inspection of Public Comments: All comments received before the close of the comment period are available for PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: https://www.cms.hhs.gov/ eRulemaking. Click on the link ‘‘Electronic Comments on CMS Regulations’’ on that Web site to view public comments. Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1–800–743–3951. Table of Contents I. Background A. Historical Overview of the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) for Fiscal Years (FYs) 2002 through 2007 B. Requirements for Updating the IRF PPS Rates C. Operational Overview of the Current IRF PPS D. Brief Summary of Proposed Revisions to the IRF PPS for FY 2008 II. 75 Percent Rule Policy III. Classification System for the Inpatient Rehabilitation Facility Prospective Payment System IV. Proposed FY 2008 IRF PPS Federal Prospective Payment Rates A. Proposed FY 2008 IRF Market Basket Increase Factor and Labor-Related Share B. Proposed Area Wage Adjustment C. Description of the Proposed IRF Standard Payment Conversion Factor and Proposed Payment Rates for FY 2008 D. Example of the Methodology for Adjusting the Proposed Federal Prospective Payment Rates V. Update to Payments for High-Cost Outliers Under the IRF PPS A. Proposed Update to the Outlier Threshold Amount for FY 2008 B. Update to the IRF Cost-to-Charge Ratio Ceilings VI. Clarification to the Regulations Text for Special Payment Provisions for Patients That Are Transferred VII. Provisions of a Proposed Regulation VIII. Collection of Information Requirement IX. Response to Public Comments X. Regulatory Impact Analysis A. Overall Impact B. Anticipated Effects of the Proposed Rule C. Anticipated Effects of the 75 Percent Rule Policy D. Alternatives Considered E. Accounting Statement F. Conclusion Regulation Text Addendum E:\FR\FM\08MYP3.SGM 08MYP3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules cprice-sewell on PROD1PC64 with PROPOSALS3 Acronyms Because of the many terms to which we refer by acronym in this proposed rule, we are listing the acronyms used and their corresponding terms in alphabetical order below. ASCA—Administrative Simplification Compliance Act of 2002, Pub. L. 107–105 BBA—Balanced Budget Act of 1997, Pub. L. 105–33 BBRA—Medicare, Medicaid, and SCHIP [State Children’s Health Insurance Program] Balanced Budget Refinement Act of 1999, Pub. L. 106–113 BIPA—Medicare, Medicaid, and SCHIP [State Children’s Health Insurance Program] Benefits Improvement and Protection Act of 2000, Pub. L. 106–554 CBSA—Core-Based Statistical Area CCR—Cost-to-Charge Ratio CFR—Code of Federal Regulations CMG—Case-Mix Group DRA—Deficit Reduction Act of 2005, Pub. L. 109–171 DSH—Disproportionate Share Hospital ECI—Employment Cost Indexes FI—Fiscal Intermediary FR—Federal Register FY—Federal Fiscal Year GDP—Gross Domestic Product HHH—Hubert H. Humphrey Building HIPAA—Health Insurance Portability and Accountability Act, Pub. L. 104–191 IFMC—Iowa Foundation for Medical Care IPPS—Inpatient Prospective Payment System IRF—Inpatient Rehabilitation Facility IRF–PAI—Inpatient Rehabilitation FacilityPatient Assessment Instrument IRF PPS—Inpatient Rehabilitation Facility Prospective Payment System IRVEN—Inpatient Rehabilitation Validation and Entry LIP—Low-Income Percentage MEDPAR—Medicare Provider Analysis and Review MMA—Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108–173) MSA—Metropolitan Statistical Area NAICS—North American Industrial Classification System OMB—Office of Management and Budget PAI—Patient Assessment Instrument PPS—Prospective Payment System RAND—RAND Corporation RFA—Regulatory Flexibility Act, Pub. L. 96– 354 RIA—Regulation Impact Analysis RIC—Rehabilitation Impairment Category RPL—Rehabilitation, Psychiatric, and LongTerm Care Hospital Market Basket SCHIP—State Children’s Health Insurance Program SIC—Standard Industrial Code TEFRA—Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248 I. Background [If you choose to comment on issues in this section, please include the caption ‘‘Background’’ at the beginning of your comments.] VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 A. Historical Overview of the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) for Fiscal Years (FYs) 2002 through 2007 Section 4421 of the Balanced Budget Act of 1997 (BBA, Pub. L. 105–33), as amended by section 125 of the Medicare, Medicaid, and SCHIP [State Children’s Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106–113), and by section 305 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106–554), provides for the implementation of a per discharge prospective payment system (PPS), through section 1886(j) of the Social Security Act (the Act), for inpatient rehabilitation hospitals and inpatient rehabilitation units of a hospital (hereinafter referred to as IRFs). Payments under the IRF PPS encompass inpatient operating and capital costs of furnishing covered rehabilitation services (that is, routine, ancillary, and capital costs) but not costs of approved educational activities, bad debts, and other services or items outside the scope of the IRF PPS. Although a complete discussion of the IRF PPS provisions appears in the August 7, 2001 final rule (66 FR 41316) as revised in the FY 2006 IRF PPS final rule (70 FR 47880), we are providing below a general description of the IRF PPS for fiscal years (FYs) 2002 through 2005. Under the IRF PPS from FY 2002 through FY 2005, as described in the August 7, 2001 final rule, the Federal prospective payment rates were computed across 100 distinct case-mix groups (CMGs). We constructed 95 CMGs using rehabilitation impairment categories (RICs), functional status (both motor and cognitive), and age (in some cases, cognitive status and age may not be a factor in defining a CMG). In addition, we constructed five special CMGs to account for very short stays and for patients who expire in the IRF. For each of the CMGs, we developed relative weighting factors to account for a patient’s clinical characteristics and expected resource needs. Thus, the weighting factors accounted for the relative difference in resource use across all CMGs. Within each CMG, we created tiers based on the estimated effects that certain comorbidities would have on resource use. We established the Federal PPS rates using a standardized payment conversion factor (formerly referred to as the budget neutral conversion factor). For a detailed discussion of the budget neutral conversion factor, please refer to PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 26231 our August 1, 2003 final rule (68 FR 45674, 45684 through 45685). In the FY 2006 IRF PPS final rule (70 FR 47880), we discussed in detail the methodology for determining the standard payment conversion factor. We applied the relative weighting factors to the standard payment conversion factor to compute the unadjusted Federal prospective payment rates. Under the IRF PPS from FYs 2002 through 2005, we then applied adjustments for geographic variations in wages (wage index), the percentage of low-income patients, and location in a rural area (if applicable) to the IRF’s unadjusted Federal prospective payment rates. In addition, we made adjustments to account for short-stay transfer cases, interrupted stays, and high cost outliers. For cost reporting periods that began on or after January 1, 2002 and before October 1, 2002, we determined the final prospective payment amounts using the transition methodology prescribed in section 1886(j)(1) of the Act. Under this provision, IRFs transitioning into the PPS were paid a blend of the Federal IRF PPS rate and the payment that the IRF would have received had the IRF PPS not been implemented. This provision also allowed IRFs to elect to bypass this blended payment and immediately be paid 100 percent of the Federal IRF PPS rate. The transition methodology expired as of cost reporting periods beginning on or after October 1, 2002 (FY 2003), and payments for all IRFs now consist of 100 percent of the Federal IRF PPS rate. We established a CMS Web site as a primary information resource for the IRF PPS. The Web site URL is https:// www.cms.hhs.gov/ InpatientRehabFacPPS/ and may be accessed to download or view publications, software, data specifications, educational materials, and other information pertinent to the IRF PPS. Section 1886(j) of the Act confers broad statutory authority to propose refinements to the IRF PPS. We finalized the refinements described in this section in the FY 2006 IRF PPS final rule (70 FR 47880). The provisions of the FY 2006 IRF PPS final rule became effective for discharges beginning on or after October 1, 2005. We published correcting amendments to the FY 2006 IRF PPS final rule in the Federal Register on September 30, 2005 (70 FR 57166). Any reference to the FY 2006 IRF PPS final rule in this proposed rule also includes the provisions effective in the correcting amendments. E:\FR\FM\08MYP3.SGM 08MYP3 cprice-sewell on PROD1PC64 with PROPOSALS3 26232 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules In the FY 2006 final rule (70 FR 47880 and 70 FR 57166), we finalized a number of refinements to the IRF PPS case-mix classification system (the CMGs and the corresponding relative weights) and the case-level and facilitylevel adjustments. These refinements were based on analyses by the RAND Corporation (RAND), a non-partisan economic and social policy research group, using calendar year 2002 and FY 2003 data. These were the first significant refinements to the IRF PPS since its implementation. In conducting the analysis, RAND used claims and clinical data for services furnished after the IRF PPS implementation. These newer data sets were more complete, and reflected improved coding of comorbidities and patient severity by IRFs. The researchers were able to use new data sources for imputing missing values and more advanced statistical approaches to complete their analyses. The RAND reports supporting the refinements made to the IRF PPS are available on the CMS Web site at: https://www.cms.hhs.gov/ InpatientRehabFacPPS/ 09_Research.asp. The final key policy changes, effective for discharges occurring on or after October 1, 2005, are discussed in detail in the FY 2006 IRF PPS final rule (70 FR 47880 and 70 FR 57166). The following is a brief summary of the key policy changes: • Adopted the Office of Management and Budget’s (OMB’s) Core-Based Statistical Area (CBSA) market area definitions in a budget neutral manner. • Implemented a budget-neutral three-year hold harmless policy for IRFs that had been classified as rural in FY 2005, but became urban in FY 2006. • Implemented a payment adjustment to account for changes in coding that did not reflect real changes in case mix. We reduced the standard payment amount by 1.9 percent to account for such changes in coding following implementation of the IRF PPS. • Modified the CMGs, tier comorbidities, and relative weights in a budget-neutral manner. The five special CMGs remained the same as they had been before FY 2006 and continued to account for very short stays and for patients who expire in the IRF. • Implemented a teaching status adjustment in a budget neutral manner for IRFs, similar to the one adopted for inpatient psychiatric facilities. • Revised and rebased the market basket and labor-related share to reflect the operating and capital cost structures for rehabilitation, psychiatric, and longterm care (RPL) hospitals to update IRF payment rates. VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 • Updated the rural adjustment from 19.14 percent to 21.3 percent in a budget neutral manner. • Updated the low-income percentage (LIP) adjustment from an exponent of 0.484 to an exponent of 0.6229 in a budget neutral manner. • Updated the outlier threshold amount from $11,211 to $5,129. As noted above, a detailed discussion of the final key policy changes for FY 2006 appears in the FY 2006 IRF PPS final rule (70 FR 47880 and 70 FR 57166). In the FY 2007 final rule (71 FR 48354) we made the following revisions and updates: • Updated the relative weight and average length of stay tables based on reanalysis of the data by CMS and our contractor, the RAND Corporation. • Reduced the standard payment amount by 2.6 percent to account more fully for coding changes that do not reflect real changes in case mix. • Updated the IRF PPS payment rates by the FY 2007 estimates of the market basket and the labor-related share. • Updated the IRF PPS payment rates by the FY 2007 wage indexes. • Applied the second year of the hold harmless policy in a budget neutral manner. • Updated the outlier threshold from $5,129 to $5,534. • Updated the urban and rural national cost-to-charge ratio ceilings for the purposes of determining outlier payments under the IRF PPS and clarified the methodology described in the regulations text. • Revised the regulation text in § 412.23(b)(2)(i) and § 412.23(b)(2)(ii) to reflect the statutory changes in section 5005 of the Deficit Reduction Act of 2005 (DRA, Pub. L. 109–171). The regulation text change prolongs the overall duration of the phased transition to the full 75 percent threshold established in § 412.23(b)(2)(i) and § 412.23(b)(2)(ii), by extending the transition’s 60 percent phase for an additional 12 months. In addition to the above DRA requirements pertaining to the applicable compliance percentage requirements under § 412.23(b)(2), we also permitted a comorbidity that meets the criteria as specified in (b)(2)(i) to continue to be used before the 75 percent compliance threshold must be met. B. Requirements for Updating the IRF PPS Rates On August 7, 2001, we published a final rule titled ‘‘Medicare Program; Prospective Payment System for Inpatient Rehabilitation Facilities’’ in the Federal Register (66 FR 41316) that PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 established a PPS for IRFs as authorized under section 1886(j) of the Act and codified at subpart P of part 412 of the Medicare regulations. In the August 7, 2001 final rule, we set forth the per discharge Federal prospective payment rates for FY 2002, which provided payment for inpatient operating and capital costs of furnishing covered rehabilitation services (that is, routine, ancillary, and capital costs) but not costs of approved educational activities, bad debts, and other services or items that are outside the scope of the IRF PPS. The provisions of the August 7, 2001 final rule were effective for cost reporting periods beginning on or after January 1, 2002. On July 1, 2002, we published a correcting amendment to the August 7, 2001 final rule in the Federal Register (67 FR 44073). Any references to the August 7, 2001 final rule in this proposed rule include the provisions effective in the correcting amendment. Section 1886(j)(5) of the Act and § 412.628 of the regulations require the Secretary to publish in the Federal Register, on or before the August 1 that precedes the start of each new FY, the classifications and weighting factors for the IRF CMGs and a description of the methodology and data used in computing the prospective payment rates for the upcoming FY. On August 1, 2002, we published a notice in the Federal Register (67 FR at 49928) to update the IRF Federal prospective payment rates from FY 2002 to FY 2003 using the methodology as described in § 412.624. As stated in the August 1, 2002 notice, we used the same classifications and weighting factors for the IRF CMGs that were set forth in the August 7, 2001 final rule to update the IRF Federal prospective payment rates from FY 2002 to FY 2003. We continued to update the prospective payment rates in accordance with the methodology set forth in the August 7, 2001 final rule for each succeeding FY up to and including FY 2005. For FY 2006, however, we published a final rule that revised several IRF PPS policies (70 FR 47880). The provisions of the FY 2006 IRF PPS final rule became effective for discharges occurring on or after October 1, 2005. We published correcting amendments to the FY 2006 IRF PPS final rule in the Federal Register (70 FR 57166). Any reference to the FY 2006 IRF PPS final rule in this proposed rule includes the provisions effective in the correcting amendments. In the final rule for FY 2007, we updated the IRF Federal prospective payment rates. In addition, we updated the cost-to-charge ratio ceilings and the outlier threshold. We implemented a 2.6 E:\FR\FM\08MYP3.SGM 08MYP3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules cprice-sewell on PROD1PC64 with PROPOSALS3 percent reduction to the FY 2007 standard payment amount to account more fully for changes in coding practices that do not reflect real changes in case mix. We revised the tier comorbidities and the relative weights to ensure that IRF PPS payments reflect, as closely as possible, the costs of caring for patients in IRFs. The final FY 2007 Federal prospective payment rates were effective for discharges occurring on or after October 1, 2006 and on or before September 30, 2007. C. Operational Overview of the Current IRF PPS As described in the August 7, 2001 final rule, upon the admission and discharge of a Medicare Part A fee-forservice patient, the IRF is required to complete the appropriate sections of a patient assessment instrument, the Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI). All required data must be electronically encoded into the IRF-PAI software product. Generally, the software product includes patient grouping programming called the GROUPER software. The GROUPER software uses specific Patient Assessment Instrument (PAI) data elements to classify (or group) patients into distinct CMGs and account for the existence of any relevant comorbidities. The GROUPER software produces a five-digit CMG number. The first digit is an alpha-character that indicates the comorbidity tier. The last four digits represent the distinct CMG number. (Free downloads of the Inpatient Rehabilitation Validation and Entry (IRVEN) software product, including the GROUPER software, are available on the CMS Web site at https:// www.cms.hhs.gov/ InpatientRehabFacPPS/ 06_Software.asp). Once a patient is discharged, the IRF completes the Medicare claim (UB–92 or its equivalent) using the five-digit CMG number and sends it to the appropriate Medicare fiscal intermediary (FI). Claims submitted to Medicare must comply with both the Administrative Simplification Compliance Act (ASCA, Pub. L. 107– 105), and the Health Insurance Portability and Accountability Act of 1996 (HIPAA, Pub. L. 104–191). Section 3 of the ASCA amends section 1862(a) of the Act by adding paragraph (22) which requires the Medicare program, subject to section 1862(h) of the Act, to deny payment under Part A or Part B for any expenses for items or services ‘‘for which a claim is submitted other than in an electronic form specified by the Secretary.’’ Section 1862(h) of the Act, in turn, provides that the Secretary shall VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 waive such denial in two types of cases and may also waive such denial ‘‘in such unusual cases as the Secretary finds appropriate.’’ See also the final rule on Electronic Submission of Medicare Claims (70 FR 71008, November 25, 2005). Section 3 of the ASCA operates in the context of the administrative simplification provisions of HIPAA, which include, among others, the requirements for transaction standards and code sets codified as 45 CFR parts 160 and 162, subparts A and I through R (generally known as the Transactions Rule). The Transactions Rule requires covered entities, including covered providers, to conduct covered electronic transactions according to the applicable transaction standards. (See the program claim memoranda issued and published by CMS at: https:// www.cms.hhs.gov/ ElectronicBillingEDITrans/ and listed in the addenda to the Medicare Intermediary Manual, Part 3, section 3600. Instructions for the limited number of claims submitted to Medicare on paper are published by CMS at: https://www.cms.hhs.gov/manuals/ downloads/clm104c25.pdf. The Medicare FI processes the claim through its software system. This software system includes pricing programming called the PRICER software. The PRICER software uses the CMG number, along with other specific claim data elements and providerspecific data, to adjust the IRF’s prospective payment for interrupted stays, transfers, short stays, and deaths, and then applies the applicable adjustments to account for the IRF’s wage index, percentage of low-income patients, rural location, and outlier payments. For discharges occurring on or after October 1, 2005, the IRF PPS payment also reflects the new teaching status adjustment that became effective as of FY 2006, as discussed in the FY 2006 IRF PPS final rule (70 FR 47880). D. Brief Summary of Proposed Revisions to the IRF PPS for FY 2008 In this proposed rule, we are proposing to make the following revisions, updates, and clarifications: • Update the FY 2008 IRF PPS payment rates by the proposed market basket, as discussed in section IV.A. • Update the FY 2008 IRF PPS payment rates by the proposed wage index and the labor related share in a budget neutral manner, as discussed in section IV.A and B. • Update the pre-reclassified and prefloor wage indexes based on the applicable Office of Management and Budget (OMB) bulletins that add or delete Core-Based Statistical Areas PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 26233 (CBSAs) numbers and title changes, as discussed in section IV.B. • Implement the final year of the 3year hold harmless policy adopted in the FY 2006 IRF PPS final rule (70 FR 47880, 47923 through 47926) in a budget neutral manner, as discussed in section IV.B. • Update the outlier threshold amount for FY 2008 to $7,522, as discussed in section V.A. • Update the cost-to-charge ratio ceiling and the national average urban and rural cost-to-charge ratios for purposes of determining outlier payments under the IRF PPS, as discussed in section V.B. • Clarify the regulations text for the special payment provisions for patients that are transferred, as discussed in section VI. II. 75 Percent Rule Policy [If you choose to comment on issues in this section, please include the caption ‘‘75 Percent Rule Policy’’ at the beginning of your comments.] In order to be excluded from the acute care inpatient hospital PPS specified in § 412.1(a)(1) and instead be paid under the IRF PPS, a hospital or rehabilitation unit of an acute care hospital must meet the requirements for classification as an IRF stipulated in subpart B of part 412. As discussed in previous Federal Register publications (68 FR 26786 (May 16, 2003), 68 FR 53266 (September 9, 2003), 69 FR 25752 (May 7, 2004), 70 FR 36640 (June 24, 2005), and 71 FR 48354 (August 18, 2006)), § 412.23(b)(2) specifies one criterion which Medicare uses for classifying a hospital or unit of a hospital as an IRF. The criterion is that a minimum percentage of a facility’s total inpatient population must require intensive rehabilitative services for the treatment of at least one of 13 medical conditions listed in § 412.23(b)(2)(iii) in order for the facility to be classified as an IRF. In addition, for cost reporting periods beginning on or after July 1, 2004, and before July 1, 2008, a patient with a comorbidity as defined at § 412.602 may be included in the inpatient population that counts toward the required applicable percentage if certain requirements are met. The minimum percentage is known as the ‘‘compliance threshold.’’ Prior to the May 7, 2004 final rule (69 FR 25752), § 412.23(b)(2) stipulated that the compliance threshold was 75 percent. Therefore, the compliance threshold was commonly referred to as the ‘‘75 percent rule.’’ In addition, prior to the May 7, 2004 final rule the regulation only specified 10 medical conditions. However, in the May 7, 2004 final rule we revised § 412.23(b)(2), and E:\FR\FM\08MYP3.SGM 08MYP3 26234 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules cprice-sewell on PROD1PC64 with PROPOSALS3 that revision increased the number of medical conditions to 13, as well as temporarily lowered the compliance threshold while at the same time specified a transition period at the end of which IRFs would once again have to meet a compliance threshold of 75 percent. Also, the revised regulation specified that during the compliance threshold transition period a patient’s comorbidity may be used to determine if a provider met the compliance threshold provided certain applicable requirements were met. In § 412.602 a comorbidity is defined as a specific patient condition that is secondary to the patient’s principal diagnosis. A patient’s principal diagnosis is the primary reason for the patient being admitted to an IRF, and this diagnosis is used to determine if the patient had a medical condition that can be counted towards meeting the compliance threshold. As specified in the May 7, 2004 final rule, in order for an inpatient with a certain comorbidity to be included in the inpatient population that counts toward the applicable percentage the following criteria must be met: • The patient is admitted for inpatient rehabilitation for a condition that is not one of the conditions listed in § 412.23(b)(2)(iii). • The patient also has a comorbidity that falls in one of the conditions listed in § 412.23(b)(2)(iii). • The comorbidity has caused significant decline in functional ability in the individual such that, even in the absence of the admitting condition, the individual would require the intensive rehabilitation treatment that is unique to inpatient rehabilitation facilities paid under the IRF PPS and that cannot be appropriately performed in another care setting covered under this Title. In accordance with the May 7, 2004 final rule, IRFs would have to meet a VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 compliance threshold of 75 percent for cost reporting periods starting on or after July 1, 2007. However, Section 5005 of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109–171 modified the applicable time periods when the various compliance thresholds, as originally specified in the May 7, 2004 final rule, must be met.) The net effect of the DRA was extension of the compliance threshold transition period. Due to the DRA, the transition period was extended to include cost reporting periods starting on or after July 1, 2004, and before July 1, 2008. Therefore, in order to conform the regulations to the DRA, we revised § 412.23(b)(2) and stipulated that an IRF with a cost reporting period starting on or after July 1, 2008, instead of July 1, 2007, must meet the 75 percent compliance threshold. In addition, we also permitted a comorbidity that meets the criteria as specified in (b)(2)(i) to continue to be used to determine the compliance threshold for cost reporting periods beginning before July 1, 2008 instead of July 1, 2007. (For a complete description of all the changes made, see the FY 2007 IRF PPS final rule (71 FR 48354)). For cost reporting periods beginning on or after July 1, 2008, comorbidities will not be eligible for inclusion in the calculations used to determine if the provider meets the 75 percent compliance threshold specified in § 412.23(b)(2)(ii). As the 75 percent rule is only partially phased in at this time and there are limitations to the policy conclusions that can be drawn from currently available claim and patient assessment data, this rule maintains existing policy. However, in the May 7, 2004 final rule (69 FR 25762), we encouraged research evaluating the continued use of comorbidities in determining compliance with the 75 percent rule. Therefore, we are soliciting PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 comments supporting current policy or other options, including use of some or all of the existing comorbidities in calculating the compliance percentage for an additional fixed period of one or more years or to integrate the inclusion of some or all of the existing comorbidities on a permanent basis. In addition, we are soliciting comments that include clinical data based on scientifically sound research that provide evidence on these and other options. III. Classification System for the Inpatient Rehabilitation Facility Prospective Payment System [If you choose to comment on issues in this section, please include the caption ‘‘Classification System for the Inpatient Rehabilitation Facility Prospective Payment System’’ at the beginning of your comments.] For the FY 2008 IRF PPS, we will use the same case-mix classification system that we used for FY 2007, as set forth in the FY 2007 IRF PPS final rule (71 FR 48354). Table 1 below, ‘‘Relative Weights and Average Lengths of Stay for Case-Mix Groups’’, presents the CMGs, the comorbidity tiers, the corresponding relative weights, and the average length of stay value for each CMG and tier. The average length of stay for each CMG is used to determine when an IRF discharge meets the definition of a short-stay transfer, which results in a per diem case level adjustment. Because these data elements are not changing, Table 1 shown below is identical to Table 4 that was published in the FY 2007 IRF PPS final rule (71 FR 48354, 48364 through 48370). The methodology we used to construct the data elements in Table 1 is described in detail in the FY 2007 IRF PPS final rule (71 FR 48354). BILLING CODE 4120–07–P E:\FR\FM\08MYP3.SGM 08MYP3 VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00007 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 26235 EP08MY07.006</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules VerDate Aug<31>2005 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.007</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 26236 VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00009 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 26237 EP08MY07.008</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules VerDate Aug<31>2005 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00010 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.009</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 26238 VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 26239 EP08MY07.010</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules VerDate Aug<31>2005 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.011</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 26240 VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00013 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 26241 EP08MY07.012</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules BILLING CODE 4120–07–C IV. Proposed FY 2008 IRF PPS Federal Prospective Payment Rates caption ‘‘Proposed FY 2008 IRF PPS Federal Prospective Payment Rates’’ at the beginning of your comments.] Section 1886(j)(3)(C) of the Act requires the Secretary to establish an increase factor that reflects changes over [If you choose to comment on issues in this section, please include the VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 A. Proposed FY 2008 IRF PPS Market Basket Increase Factor and LaborRelated Share Frm 00014 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.013</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 26242 cprice-sewell on PROD1PC64 with PROPOSALS3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules time in the prices of an appropriate mix of goods and services included in the covered IRF services, which is referred to as a market basket index. In updating the FY 2008 payment rates outlined in this proposed rule, CMS applied an appropriate increase factor to the FY 2007 IRF PPS payment rates that is based on the rehabilitation, psychiatric, and long-term care hospital (RPL) market basket. In constructing the RPL market basket, we used the methodology set forth in the FY 2006 IRF PPS final rule (70 FR 47880, 47908 through 47915). As discussed in that final rule, the RPL market basket primarily uses the Bureau of Labor Statistics’ (BLS) data as price proxies, which are grouped in one of the three BLS categories: Producer Price Indexes (PPI), Consumer Price Indexes (CPI), and Employment Cost Indexes (ECI). We evaluated and selected these particular price proxies using the criteria of reliability, timeliness, availability, and relevance, and believe they continue to be the best measures of price changes for the cost categories. As discussed in the FY 2007 IRF PPS proposed rule, beginning April 2006 with the publication of March 2006 data, the BLS’’ ECI has used a different classification system, the North American Industrial Classification System (NAICS), instead of the Standard Industrial Codes (SIC). We have consistently used the ECI as the data source for our wages and salaries and other price proxies in the RPL market basket and did not make any changes. This proposed rule’s estimated FY 2008 IRF market basket increase factor and labor-related share will be updated for the final rule based on the most recent data available from the BLS. We will use the same methodology described in the FY 2006 IRF PPS final rule to compute the FY 2008 IRF market basket increase factor and labor-related share. For this proposed rule, the FY 2008 IRF market basket increase factor is 3.3 percent. This is based on Global Insight, Inc.’s forecast for the first quarter of 2007 (2007q1) with historical data through the fourth quarter of 2006 (2006q4). We propose to update the market basket with more recent data for the final rule to the extent it is available. However, we note that the President’s budget includes a proposal for a zero percent update in the IRF market basket for FY 2008, and that the provisions outlined in this proposed rule would need to reflect any legislation that the Congress enacts to adopt this proposal. In addition, we have used the methodology described in the FY 2006 IRF PPS final rule to update the labor- VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 related share for FY 2008. In FY 2004, we updated the 1992 market basket data to 1997 based on the methodology described in the August 1, 2003 final rule (68 FR 45688 through 45689). As discussed in the FY 2006 IRF PPS final rule (70 FR 47880, 47915 through 47917), we rebased and revised the market basket for FY 2006 using the 2002-based cost structures for IRFs, IPFs, and LTCHs to determine the FY 2006 labor-related share. For FY 2007, we used the same methodology discussed in the FY 2006 IRF PPS final rule (70 FR 47880, 47908 through 47917) to determine the FY 2007 IRF labor-related share. For FY 2008, we continue to use the same methodology discussed in the FY 2006 IRF PPS final rule. As shown in Table 2, the total FY 2008 RPL labor-related share is 75.846 percent in this proposed rule. We propose to update the labor-related share with more recent data for the final rule to the extent it is available. TABLE 2.—PROPOSED FY 2008 IRF LABOR-RELATED SHARE RELATIVE IMPORTANCE Proposed FY 2008 IRF labor-related relative importance Cost category Wages and salaries .............. Employee benefits ................ Professional fees .................. All other labor intensive services .................................... 52.640 14.149 2.907 Subtotal ......................... 71.843 Labor-related share of capital costs .................................. 4.003 Total ............................... 75.846 2.147 SOURCE: Global Insight, Inc, 1st Qtr, 2007; @USMACRO/CONTROL0307 @CISSIM/ TL0207.SIM Historical Data through 4th QTR, 2006 B. Proposed Area Wage Adjustment Section 1886(j)(6) of the Act requires the Secretary to adjust the proportion (as estimated by the Secretary from time to time) of rehabilitation facilities’ costs attributable to wages and wage-related costs by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the rehabilitation facility compared to the national average wage level for those facilities. The Secretary is required to update the wage index on the basis of information available to the Secretary on the wages and wage-related costs to furnish rehabilitation services. Any adjustments or updates made under PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 26243 section 1886(j)(6) of the Act for a FY are made in a budget neutral manner. In the FY 2007 IRF PPS final rule, we maintained the methodology described in the FY 2006 IRF PPS final rule to determine the wage index, labor market area definitions, and hold harmless policy consistent with the rationale outlined in that final rule (70 FR 47880, 47917 through 47933). In the FY 2006 IRF PPS final rule, we adopted a 3-year hold harmless policy specifically for rural IRFs whose labor market designations changed from rural to urban under the CBSA-based labor market area designations. This policy specifically applied to IRFs that had been previously designated rural and which, effective for discharges on or after October 1, 2005, would otherwise have become ineligible for the 19.14 percent rural adjustment. For FY 2008, the third and final year of the 3-year phase-out of the budget-neutral hold harmless policy, we will no longer apply an adjustment for IRFs that meet the criteria described in the FY 2006 final rule (70 FR 47880, 47923 through 47926). For FY 2008, we propose to maintain the policies and methodologies described in the FY 2007 IRF PPS final rule relating to the labor market area definitions, the wage index methodology for areas with wage data, and hold harmless policy consistent with the rationale outlined in the FY 2006 IRF PPS final rule (70 FR 47880, 47917 through 47933). Therefore, this proposed rule continues to use the CoreBased Statistical Area (CBSA) labor market area definitions and the prereclassification and pre-floor hospital wage index based on 2003 cost report data. In addition, the budget neutral hold harmless policy established in the FY 2006 final rule will expire for discharges occurring on or after October 1, 2007. In adopting the CBSA geographic designations in FY 2006, we provided a one-year transition with a blended wage index for all providers. For FY 2006, the wage index for each provider consisted of a blend of 50 percent of the FY 2006 MSA-based wage index and 50 percent of the FY 2006 CBSA-based wage index (both using FY 2001 hospital data). We referred to the blended wage index as the FY 2006 IRF PPS transition wage index. As discussed in the FY 2006 IRF PPS final rule (70 FR 47880, 47926), subsequent to the expiration of this oneyear transition on September 30, 2006, we used the full CBSA-based wage index values as published in the Addendum of the FY 2007 IRF PPS final rule (71 FR 48354) and in the Addendum of this proposed rule. E:\FR\FM\08MYP3.SGM 08MYP3 cprice-sewell on PROD1PC64 with PROPOSALS3 26244 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules When adopting OMB’s new labor market designations, we identified some geographic areas where there were no hospitals and, thus, no hospital wage index data on which to base the calculation of the IRF PPS wage index (70 FR 47880). In this proposed rule, we are proposing to revise our methodology to determine a proxy for rural areas without hospital wage data. Under the CBSA labor market areas, there are no rural hospitals in rural Massachusetts and rural Puerto Rico. Because there was no rural proxy for more recent rural data within those areas, we used the FY 2006 wage index value in both FY 2006 and FY 2007 for rural Massachusetts and rural Puerto Rico. Due to the use of the same wage index value (from FY 2006) for these areas for two fiscal years, we believe it is appropriate at this point to consider alternatives in our methodology to update the wage index for rural areas without rural hospital wage index data. We believe that the best imputed proxy would 1) use pre-floor, pre-reclassified hospital data, 2) be easy to evaluate, 3) use the most local data, and 4) be easily updateable from year-to-year. Since the implementation of the IRF PPS, we have used the pre-floor, pre-reclassified hospital wage data that is easy to evaluate and is updateable from year-toyear. In addition, the IRF PPS wage index is based on hospitals’ cost report data, which reflects local available data. Therefore, we believe the imputed proxy for a rural area without hospital wage data is consistent with our past methodology and other post-acute PPS wage index policy. Although our current methodology uses rural prefloor, pre-reclassified hospital wage data, this method is not updateable from year-to-year. Therefore, in cases where there is a rural area without rural hospital wage data, we propose using the average wage index from all contiguous CBSAs to represent a reasonable proxy for the rural area within a State. While this approach does not use rural data, it does use pre-floor, pre-reclassified hospital wage data, it is easy to evaluate, it is updateable from year-to-year, and it uses the most local data available. In determining an imputed rural wage index, we interpret the term ‘‘contiguous’’ to mean sharing a border. For example, in the case of Massachusetts, the entire rural area consists of Dukes and Nantucket counties. We have determined that the borders of Dukes and Nantucket counties are local and contiguous with Barnstable and Bristol counties. Under the proposed methodology, the wage VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 indexes for the counties of Barnstable (CBSA 12700: 1.2539) and Bristol (CBSA 39300: 1.0783) are averaged, resulting in an imputed rural wage index of 1.1661 for rural Massachusetts for FY 2008. While we believe that this policy could be readily applied to other rural areas that lack hospital wage data (possibly due to hospitals converting to a different provider type, such as a CAH, that does not submit the appropriate wage data), we may reexamine this policy should a similar situation arise in the future. However, we do not believe that this policy is appropriate for Puerto Rico. There are sufficient economic differences between hospitals in the United States and those in Puerto Rico (including the payment of hospitals in Puerto Rico using blended Federal/ Commonwealth-specific rates) that a separate and distinct policy for Puerto Rico is necessary. Consequently, any alternative methodology for imputing a wage index for rural Puerto Rico would need to take into account these economic differences and the payment rates hospitals receive in Puerto Rico. Our policy of imputing a rural wage index based on the wage index(es) of CBSAs contiguous to the rural area in question does not recognize the unique circumstances of Puerto Rico. While we have not yet identified an alternative methodology for imputing a wage index for rural Puerto Rico, we will continue to evaluate the feasibility of using existing hospital wage data and, possibly, wage data from other sources. By maintaining our current policy for Puerto Rico, we will maintain consistency with other post-acute care PPS wage index policies. Accordingly, we propose to continue using the most recent wage index previously available for Puerto Rico; that is, a wage index of 0.4047. We solicit comments on our proposal to maintain the current wage index policy for rural Puerto Rico. In the FY 2006 IRF PPS final rule (70 FR 47880, 47920), we notified the public that the Office of Management and Budget (OMB) published a bulletin that changed the titles to certain CBSAs after the publication of our FY 2006 IRF PPS proposed rule (70 FR 30186). Since the publication of the FY 2006 IRF PPS final rule, OMB published additional bulletins that updated the CBSAs. Specifically, OMB added or deleted certain CBSA numbers and revised certain titles. Accordingly, in this proposed rule, we are proposing to clarify that this and all subsequent IRF PPS rules and notices are considered to incorporate the CBSA changes published in the most recent OMB bulletin that applies to the hospital PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 wage data used to determine the current IRF PPS wage index. The OMB bulletins may be accessed online at https:// www.whitehouse.gov/omb/bulletins/ index.html. To calculate the wage-adjusted facility payment for the payment rates set forth in this proposed rule, we multiply the unadjusted Federal prospective payment by the proposed FY 2008 RPL labor-related share (75.846 percent) to determine the labor-related portion of the Federal prospective payments. We then multiply this labor-related portion by the applicable proposed IRF wage index shown in Table 1 for urban areas and Table 2 for rural areas in the Addendum. Adjustments or updates to the IRF wage index made under section 1886(j)(6) of the Act must be made in a budget neutral manner; therefore, we calculated a budget neutral wage adjustment factor as established in the August 1, 2003 final rule and codified at § 412.624(e)(1), and described in the steps below. We propose to use the following steps to ensure that the FY 2008 IRF standard payment conversion factor reflects the update to the proposed wage indexes (based on the FY 2003 pre-reclassified and pre-floor hospital wage data) and the proposed labor-related share in a budget neutral manner: Step 1 Determine the total amount of the estimated FY 2007 IRF PPS rates, using the FY 2007 standard payment conversion factor and the labor-related share and the wage indexes from FY 2007 (as published in the FY 2007 IRF PPS final rule). Step 2 Calculate the total amount of estimated IRF PPS payments, using the FY 2007 standard payment conversion factor and the proposed FY 2008 laborrelated share and proposed CBSA urban and rural wage indexes. Step 3 Divide the amount calculated in step 1 by the amount calculated in step 2, which equals the FY 2008 budget neutral wage adjustment factor of 1.0026. Step 4 Apply the FY 2008 budget neutral wage adjustment factor from step 3 to the FY 2007 IRF PPS standard payment conversion factor after the application of the estimated market basket update to determine the FY 2008 standard payment conversion factor. C. Description of the Proposed IRF Standard Payment Conversion Factor and Proposed Payment Rates for FY 2008 To calculate the proposed standard payment conversion factor for FY 2008 and as illustrated in Table 3 below, we begin by applying the estimated market E:\FR\FM\08MYP3.SGM 08MYP3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules basket increase factor (3.3 percent) to the standard payment conversion factor for FY 2007 ($12,981), which equals $13,409. We then apply the proposed combined budget neutrality factor for the wage index and labor related share and final year of the hold harmless policy of 1.0040 (1.0026 * 1.0014 = 1.0040), which would result in a proposed standard payment conversion factor of $13,463. 26245 TABLE 3.—CALCULATIONS TO DETERMINE THE PROPOSED FY 2008 STANDARD PAYMENT CONVERSION FACTOR TABLE 3.—CALCULATIONS TO DETERMINE THE PROPOSED FY 2008 STANDARD PAYMENT CONVERSION FACTOR—Continued Explanation for adjustment Explanation for adjustment Calculations FY 2007 Standard Payment Conversion Factor ............. Proposed FY 2008 Market Basket Increase Factor ..... Subtotal ......................... Proposed Budget Neutrality Factor for the Wage Index, Labor-Related Share, and the Hold Harmless Provision .................................... 12,981 × 1.033 = 13,409 × 1.0040 Proposed FY 2008 Standard Payment Conversion Factor ...................................... Calculations = $13,463 After the application of the relative weights, the resulting proposed unadjusted IRF prospective payment rates for FY 2008 are shown below in Table 4, ‘‘Proposed FY 2008 Payment Rates.’’ VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00017 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.014</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 BILLING CODE 4120–07–P VerDate Aug<31>2005 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00018 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.015</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 26246 VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00019 Fmt 4701 Sfmt 4725 E:\FR\FM\08MYP3.SGM 08MYP3 26247 EP08MY07.016</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26248 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules D. Example of the Methodology for Adjusting the Proposed Federal Prospective Payment Rates cprice-sewell on PROD1PC64 with PROPOSALS3 Table 5 illustrates the proposed methodology for adjusting the Federal prospective payments (as described in sections IV.A through C of this proposed rule). The examples below are based on two hypothetical Medicare beneficiaries, both classified into CMG 0110 (without comorbidities). The unadjusted Federal prospective payment rate for CMG 0110 (without comorbidities) can be found in Table 4 above. One beneficiary is in Facility A, an IRF located in rural Spencer County, Indiana, and another beneficiary is in Facility B, an IRF located in urban Harrison County, Indiana. Facility A, a non-teaching hospital, has a disproportionate share hospital (DSH) percentage of 5 percent (which results in a LIP adjustment of 1.0309), a wage index of 0.8538, and an applicable rural VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 adjustment of 21.3 percent. Facility B, a teaching hospital, has a DSH percentage of 15 percent (which results in a LIP adjustment of 1.0910), a wage index of 0.9118, and an applicable teaching status adjustment of 0.109. To calculate each IRF’s labor and nonlabor portion of the Federal prospective payment, we begin by taking the unadjusted Federal prospective payment rate for CMG 0110 (without comorbidities) from Table 4 above. Then, we multiply the estimated laborrelated share (75.846) described in section IV.A by the unadjusted Federal prospective payment rate. To determine the non-labor portion of the Federal prospective payment rate, we subtract the labor portion of the Federal payment from the unadjusted Federal prospective payment. To compute the wage-adjusted Federal prospective payment, we multiply the result of the labor portion of the Federal payment by the appropriate wage index found in the Addendum in Tables 1 and 2, which PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 will result in the wage-adjusted amount. Next, we compute the wage-adjusted Federal payment by adding the wageadjusted amount to the non-labor portion. To adjust the Federal prospective payment by the facility-level adjustments, there are several steps. First, we take the wage-adjusted Federal prospective payment and multiply it by the appropriate rural and LIP adjustments (if applicable). Then, to determine the appropriate amount of additional payment for the teaching status adjustment (if applicable), we multiply the teaching status adjustment (0.109, in this example) by the wageadjusted and rural-adjusted amount (if applicable). Finally, we add the additional teaching status payments (if applicable) to the wage, rural, and LIPadjusted Federal prospective payment rate. Table 5 illustrates the components of the proposed adjusted payment calculation. BILLING CODE 4120–07–P E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.017</GPH> BILLING CODE 4120–07–C BILLING CODE 4120–07–C Thus, the proposed adjusted payment for Facility A would be $32,405.16 and the proposed adjusted payment for Facility B would be $32,635.56. cprice-sewell on PROD1PC64 with PROPOSALS3 V. Update to Payments for High-Cost Outliers Under the IRF PPS [If you choose to comment on issues in this section, please include the caption ‘‘High-Cost Outliers Under the IRF PPS’’ at the beginning of your comments.] A. Proposed Update to the Outlier Threshold Amount for FY 2008 Section 1886(j)(4) of the Act provides the Secretary with the authority to make VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 payments in addition to the basic IRF prospective payments for cases incurring extraordinarily high costs. A case qualifies for an outlier payment if the estimated cost of the case exceeds the adjusted outlier threshold. We calculate the adjusted outlier threshold by adding the IRF PPS payment for the case (that is, the CMG payment adjusted by all of the relevant facility-level adjustments) and the adjusted threshold amount (also adjusted by all of the relevant facility-level adjustments). Then, we calculate the estimated cost of a case by multiplying the IRF’s overall cost-to-charge ratio (CCR) by the Medicare allowable covered charge. If PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 26249 the estimated cost of the case is higher than the adjusted outlier threshold, we make an outlier payment for the case equal to 80 percent of the difference between the estimated cost of the case and the outlier threshold. In the August 7, 2001 final rule (66 FR 41316, 41362 through 41363), we discussed our rationale for setting the outlier threshold amount for the IRF PPS so that estimated outlier payments would equal 3 percent of total estimated payments. Subsequently, we updated the IRF outlier threshold amount in the FYs 2006 and 2007 IRF PPS final rules (70 FR 47880 and 71 FR 48354) to maintain estimated outlier payments at 3 percent of total estimated payments, E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.018</GPH> Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26250 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules cprice-sewell on PROD1PC64 with PROPOSALS3 and we also stated that we would continue to analyze the estimated outlier payments for subsequent years and adjust the outlier threshold amount as appropriate to maintain the 3 percent target. For this proposed rule, we performed an updated analysis of FY 2005 claims and IRF–PAI data using the same methodology we used to set the initial outlier threshold amount when we first implemented the IRF PPS in the August 7, 2001 final rule (66 FR 41316), which is also the same methodology we used to update the outlier threshold amounts for FYs 2006 and 2007. Using the updated FY 2005 claims and IRF–PAI data, we estimate that IRF outlier payments as a percentage of total estimated payments for FY 2007 increased from 3 percent using the FY 2004 data to approximately 3.8 percent using the updated FY 2005 data. We are still investigating the reasons for the change in estimated outlier payments between FY 2004 and FY 2005, and will carefully evaluate all possible reasons for this change. Based on the updated analysis using FY 2005 data, and consistent with the broad statutory authority conferred upon the Secretary in sections 1886(j)(4)(A)(i) and 1886(j)(4)(A)(ii) of the Act, we propose to update the outlier threshold amount to $7,522 to decrease estimated outlier payments from approximately 3.8 to 3 percent of total estimated aggregate IRF payments for FY 2008. The outlier threshold amount for FY 2008 is subject to change in the final rule based on analysis of updated data. B. Update to the IRF Cost-to-Charge Ratio Ceilings In accordance with the methodology stated in the August 1, 2003 final rule (68 FR 45692 through 45694), we apply a ceiling to IRFs’ cost-to-charge ratios (CCRs). Using the methodology described in that final rule, we propose to update the national urban and rural CCRs for IRFs. We apply the national urban and rural CCRs in the following situations: • New IRFs that have not yet submitted their first Medicare cost report. • IRFs whose overall CCR is in excess of 3 standard deviations above the corresponding national geometric mean, which we propose to set at 1.55 (based on the current estimate) for FY 2008. • Other IRFs for whom accurate data with which to calculate an overall CCR are not available. Specifically, for FY 2008, we estimate a proposed national CCR of 0.589 for rural IRFs and 0.475 for urban IRFs. For VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 new facilities, we use these national ratios until the data become available for us to compute the facility’s actual CCR using the first tentative settled or final settled cost report data, which we will then use for the subsequent cost reporting period. We note that the proposed national average rural and urban CCRs and our estimate of 3 standard deviations above the corresponding national geometric mean in this section are subject to change in the final rule based on updated analysis and data. C. Adjustment of IRF Outlier Payments In the August 1, 2003 final rule (68 FR 45674, 45693 through 45694), we finalized a proposal to make IRF outlier payments subject to reconciliation when IRFs’ cost reports are settled, consistent with the policy adopted for IPPS hospitals in the June 9, 2003 IPPS final rule (68 FR 34494, 34501). The revised methodology provides for retroactive adjustments to IRF outlier payments to account for differences between the CCRs from the latest settled cost report and the actual CCRs computed at the time the cost report that coincides with the date of discharge is settled using the cost and charge data from that cost report. This revised methodology addresses vulnerabilities found in the IPPS and the IRF outlier payment policies, which may have resulted in outlier payments that were too high or too low. Along these lines, we are analyzing IRF outlier payments from the beginning of the IRF PPS through FY 2005, obtained from IRFs’ cost report filings, to identify specific payment vulnerabilities in the IRF outlier payment policy. Under this policy, which is outlined in § 412.624(e)(5), which in turn references § 412.84(i) and § 412.84(m) of the IPPS regulations, outlier payments will be processed on an interim basis throughout the year using IRFs’ CCRs based on the best information available at the time. When an IRF’s cost report is settled, any reconciliation of outlier payments by fiscal intermediaries will be based on the relationship between an IRF’s costs and charges at the time a particular discharge actually occurred. This revised methodology ensures that the final outlier payments reflect an accurate assessment of the actual costs the IRF incurred for treating the case. We have not yet issued instructions to the fiscal intermediaries regarding IRF outlier reconciliation because we have been analyzing the data and assessing the systems changes necessary to conduct the reconciliation. Thus, we will soon issue instructions to fiscal intermediaries to begin reconciling IRF PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 outlier payments upon settlement of IRF cost reports. VI. Clarification to the Regulation Text for Special Payment Provisions for Patients That Are Transferred [If you choose to comment on issues in this section, please include the caption ‘‘Clarification to the Regulation Text for Special Payment Provisions for Patients that are Transferred’’ at the beginning of your comments.] Section 125(a)(3) of the BBRA amended Section 1886(j)(1) of the Act by adding a paragraph (E) that states ‘‘Construction relating to transfer authority—Nothing in this subsection shall be construed as preventing the Secretary from providing for an adjustment to payments to take into account the early transfer of a patient from a rehabilitation facility to another site of care.’’ In the FY 2002 proposed and final IRF PPS rules, we proposed and adopted the transfer payment policy under § 412.624(f). The transfer policy provides payments that more accurately reflect facility resources used and services delivered for patients that transfer to another site of care as discussed in the FY 2002 IRF PPS final rule (66 FR 41316, 41353 through 41355). We are proposing to revise our regulations text to clarify our existing policy under § 412.624(f). In the FY 2002 IRF PPS final rule (66 FR 41316, 41353 through 41355), we discuss our rationale, criteria for defining a transfer case, and the methodology to determine the unadjusted Federal prospective payment for the transfer case. In addition, we discuss several adjustments that we apply to the unadjusted Federal prospective payment rate. The final adjustments described in the FY 2002 IRF PPS final rule (65 FR 66304, 66347 through 66357) include the area wage adjustment, rural adjustment, the LIP adjustment, and the high-cost outlier adjustment. In our FY 2006 IRF PPS final rule (70 FR 47880), we refined the facility level adjustments and also adopted a teaching status adjustment. We define a transfer under § 412.602 to mean the release of a Medicare inpatient from an IRF to another IRF, a short-term, acute-care prospective payment hospital, a long-term care hospital as described in § 412.23(e), or a nursing home that qualifies to receive Medicare or Medicaid payment. In order to receive a transfer payment under § 412.624(f), a patient must be transferred to another site of care as defined in § 412.602 and had to have stayed in the IRF for less than the average length of stay for the case-mix E:\FR\FM\08MYP3.SGM 08MYP3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules group (CMG). Table 1 in this proposed rule presents the CMGs, the comorbidity tiers, the corresponding relative weights, and the average length of stay value for each CMG and tier. We use the average length of stay for each CMG to determine when an IRF discharge meets the definition of a transfer, which results in a per diem case level adjustment. Since the implementation of the IRF PPS, we determine whether a claim meets the high-cost outlier policy under § 412.624(e)(5), as revised in the FY 2007 IRF PPS final rule (71 FR 48354, 48382 through 48383). A case qualifies for an outlier payment if the estimated cost of the case exceeds the adjusted outlier threshold, in which case we make an outlier payment equal to 80 percent of the difference between the estimated cost of the case and the outlier threshold. Since the implementation of the IRF PPS, we have provided an additional high-cost outlier payment to both transfer cases and full CMG cases when applicable. We propose to clarify the regulations text to articulate the transfer policy more clearly. Specifically, we propose to add the phrase ‘‘subject to paragraph (e)(5)’’ at the end of the paragraph under § 412.624(f)(2)(v). The proposed revised § 412.624(f)(2)(v) will read, ‘‘By applying the adjustment described in paragraphs (e)(1), (e)(2), (e)(3), (e)(4), and (e)(7) of this section to the unadjusted payment amount determined in paragraph (f)(2)(iv) of this section to equal the adjusted transfer payment amount, subject to paragraph (e)(5).’’ cprice-sewell on PROD1PC64 with PROPOSALS3 VII. Provisions of the Proposed Regulation [If you choose to comment on issues in this section, please include the caption ‘‘Provisions of the Proposed Regulations’’ at the beginning of your comments.] We are proposing to make revisions to the regulation text in order to implement the proposed policy changes for IRFs for FY 2007 and subsequent fiscal years. Specifically, we are proposing to make conforming changes in 42 CFR part 412. We discuss these proposed revisions and others in detail below. A. Section 412.624 Methodology for Calculating the Federal Prospective Payment Rates In this section, we are proposing to revise the current regulations text in paragraph (f)(2)(v) to clarify that we determine whether a high-cost outlier payment would be applicable for transfer cases. We emphasize that this is VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 not a change to our current methodology for determining whether a high-cost outlier payment applies to transfer cases. B. Additional Proposed Changes • Update the FY 2008 IRF PPS payment rates by the proposed market basket, as discussed in section IV.A. • Update the FY 2008 IRF PPS payment rates by the proposed wage index and the labor related share in a budget neutral manner, as discussed in section IV.A and B. • Update the pre-reclassified and prefloor wage indexes based on the CBSA changes published in the most recent OMB bulletins that apply to the hospital wage data used to determine the current IRF PPS wage index, as discussed in section IV.B. • Implement the final year of the three-year hold harmless policy adopted in the FY 2006 IRF PPS final rule (70 FR 47880, 447923 through 47926) in a budget neutral manner, as discussed in section IV.B. • Update the outlier threshold amount for FY 2008 to $7,522, as discussed in section V.A. • Update the cost-to-charge ratio ceiling and the national average urban and rural cost-to-charge ratios for purposes of determining outlier payments under the IRF PPS, as discussed in section V.B. VIII. Collection of Information Requirements This document does not impose information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995. IX. Response to Public Comments Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document. X. Regulatory Impact Analysis [If you choose to comment on issues in this section, please include the caption ‘‘Regulatory Impact Analysis’’ at the beginning of your comments.] A. Overall Impact We have examined the impacts of this proposed rule as required by Executive PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 26251 Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA, September 16, 1980, Pub. L. 96–354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4), and Executive Order 13132. Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibility of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year). This proposed rule is a major rule, as defined in Title 5, United States Code, section 804(2), because we estimate the impact to the Medicare program, and the annual effects to the overall economy, would be more than $100 million. We estimate that the total impact of these proposed changes for estimated FY 2008 payments compared to estimated FY 2007 payments would be an increase of approximately $150 million (this reflects a $200 million increase from the update to the payment rates and a $50 million decrease due to the proposed update to the outlier threshold amount to decrease estimated outlier payments from approximately 3.8 percent in FY 2007 to 3 percent in FY 2008). The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government jurisdictions. Most IRFs and most other providers and suppliers are considered small entities, either by nonprofit status or by having revenues of $6 million to $29 million in any one year. (For details, see the Small Business Administration’s final rule that set forth size standards for health care industries, at 65 FR 69432, November 17, 2000.) Because we lack data on individual hospital receipts, we cannot determine the number of small proprietary IRFs or the proportion of IRFs’ revenue that is derived from Medicare payments. Therefore, we assume that all IRFs (an approximate total of 1,200 IRFs, of which approximately 60 percent are nonprofit facilities) are considered small entities and that Medicare payment constitutes the majority of their revenues. The Department of Health and Human E:\FR\FM\08MYP3.SGM 08MYP3 cprice-sewell on PROD1PC64 with PROPOSALS3 26252 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules Services generally uses a revenue impact of 3 to 5 percent as a significance threshold under the RFA. As shown in Table 6, we estimate that the net revenue impact of this proposed rule on all IRFs is to increase estimated payments by about 2.4 percent, with an estimated increase in payments of 3 percent or higher for some categories of IRFs (such as rural freestanding IRFs, urban IRFs in the East North Central and Mountain regions, and rural IRFs in the Middle Atlantic and East South Central regions). Thus, we anticipate that this proposed rule may have a significant impact on a substantial number of small entities. However, the estimated impact of this proposed rule is a net increase in revenues across all categories of IRFs, so we believe that this proposed rule would not impose a significant burden on small entities. Medicare fiscal intermediaries and carriers are not considered to be small entities. Individuals and States are not included in the definition of a small entity. In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 100 beds. As discussed in detail below, the rates and policies set forth in this proposed rule would not have an adverse impact on rural hospitals based on the data of the 199 rural units and 20 rural hospitals in our database of 1,234 IRFs for which data were available. Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any one year of $100 million in 1995, updated annually for inflation. That threshold level is currently approximately $120 million. This proposed rule would not mandate any requirements for State, local, or tribal governments, nor would it affect private sector costs. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. As stated above, this proposed rule would not have a substantial effect on State and local governments. VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 B. Anticipated Effects of the Proposed Rule We discuss below the impacts of this proposed rule on the budget and on IRFs. 1. Basis and Methodology of Estimates This proposed rule sets forth updates of the IRF PPS rates contained in the FY 2007 final rule, proposes an update to the outlier threshold for high-cost cases, and proposes an adjustment to the wage index methodology. Based on the above, we estimate that the FY 2008 impact would be a net increase of $150 million in payments to IRF providers (this reflects a $200 million estimated increase from the proposed update to the payment rates and a $50 million estimated decrease due to the proposed update to the outlier threshold amount to decrease the estimated outlier payments from approximately 3.8 percent in FY 2007 to 3 percent in FY 2008). The impact analysis in Table 6 of this proposed rule represents the projected effects of the proposed policy changes in the IRF PPS for FY 2008 compared with estimated IRF PPS payments in FY 2007 without the proposed policy changes. We estimate the effects by estimating payments while holding all other payment variables constant. We use the best data available, but we do not attempt to predict behavioral responses to these proposed changes, except where noted, and we do not make adjustments for future changes in such variables as number of discharges or case-mix, except where noted. We note that certain events may combine to limit the scope or accuracy of our impact analysis, because such an analysis is future-oriented and, thus, susceptible to forecasting errors because of other changes in the forecasted impact time period. Some examples could be legislative changes made by the Congress to the Medicare program that would impact program funding, or changes specifically related to IRFs. In addition, changes to the Medicare program may continue to be made as a result of the BBA, the BBRA, the BIPA, the MMA, the DRA, or new statutory provisions. Although these changes may not be specific to the IRF PPS, the nature of the Medicare program is such that the changes may interact, and the complexity of the interaction of these changes could make it difficult to predict accurately the full scope of the impact upon IRFs. In updating the rates for FY 2008, we proposed a number of standard annual revisions and clarifications mentioned elsewhere in this proposed rule (for PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 example, the update to the wage and market basket indexes used to adjust the Federal rates). We estimate that these proposed revisions would increase payments to IRFs by approximately $200 million. The aggregate change in estimated payments associated with this proposed rule is estimated to be an increase in payments to IRFs of $150 million for FY 2008. The market basket increase of $200 million and the $50 million decrease due to the proposed update to the outlier threshold amount to decrease estimated outlier payments from approximately 3.8 percent in FY 2007 to 3.0 percent in FY 2008 would result in a net change in estimated payments from FY 2007 to FY 2008 of $150 million. The effects of the proposed changes that affect IRF PPS payment rates are shown in Table 6. The following proposed changes that affect the IRF PPS payment rates are discussed separately below: • The effects of the proposed update to the outlier threshold amount to decrease total estimated outlier payments from approximately 3.8 to 3 percent of total estimated payments for FY 2008, consistent with section 1886(j)(4) of the Act. • The effects of the annual market basket update (using the RPL market basket) to IRF PPS payment rates, as required by sections 1886(j)(3)(A)(i) and 1886(j)(3)(C) of the Act. • The effects of applying the budgetneutral labor-related share and wage index adjustment, including a proposal to revise our methodology to determine a proxy for rural areas without hospital wage data (as described in section IV of this proposed rule), as required under section 1886(j)(6) of the Act. • The effects of the final year of the 3-year budget-neutral hold-harmless policy for IRFs that were rural under § 412.602 during FY 2005, but are urban under § 412.602 beginning FY 2006 and lose the rural adjustment, resulting in a decrease in the estimated IRF PPS payments if not for the hold harmless policy. • The total proposed change in estimated payments based on the FY 2008 proposed policies relative to estimated FY 2007 payments without the proposed policies. 2. Description of Table 6 The table below categorizes IRFs by geographic location, including urban or rural location and location with respect to CMS’s nine census divisions (as defined on the cost report) of the country. In addition, the table divides IRFs into those that are separate E:\FR\FM\08MYP3.SGM 08MYP3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules cprice-sewell on PROD1PC64 with PROPOSALS3 rehabilitation hospitals (otherwise called freestanding hospitals in this section), those that are rehabilitation units of a hospital (otherwise called hospital units in this section), rural or urban facilities, ownership (otherwise called for-profit, non-profit, and government), and by teaching status. The top row of the table shows the overall impact on the 1,234 IRFs included in the analysis. The next 12 rows of Table 6 contain IRFs categorized according to their geographic location, designation as either a freestanding hospital or a unit of a hospital, and by type of ownership; all urban, which is further divided into urban units of a hospital, urban freestanding hospitals, and by type of ownership; and all rural, which is further divided into rural units of a hospital, rural freestanding hospitals, and by type of ownership. There are 1,015 IRFs located in urban areas included in our analysis. Among these, there are 816 IRF units of hospitals located in urban areas and 199 freestanding IRF hospitals located in urban areas. There are 219 IRFs located in rural areas included in our analysis. Among these, there are 199 IRF units of hospitals located in rural areas and 20 freestanding IRF hospitals located in rural areas. There are 419 for-profit IRFs. Among these, there are 340 IRFs in urban areas and 79 IRFs in rural areas. There are 748 non-profit IRFs. Among these, there are 624 urban IRFs and 124 rural IRFs. There are 67 government-owned IRFs. Among these, VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 there are 51 urban IRFs and 16 rural IRFs. The remaining three parts of Table 6 show IRFs grouped by their geographic location within a region, and the last part groups IRFs by teaching status. First, IRFs located in urban areas are categorized with respect to their location within a particular one of the nine CMS geographic regions. Second, IRFs located in rural areas are categorized with respect to their location within a particular one of the nine CMS geographic regions. In some cases, especially for rural IRFs located in the New England, Mountain, and Pacific regions, the number of IRFs represented is small. Finally, IRFs are grouped by teaching status, including non-teaching IRFs, IRFs with an intern and resident to average daily census (ADC) ratio less than 10 percent, IRFs with an intern and resident to ADC ratio greater than or equal to 10 percent and less than or equal to 19 percent, and IRFs with an intern and resident to ADC ratio greater than 19 percent. The estimated impacts of each proposed change to the facility categories listed above are shown in the columns of Table 6. The description of each column is as follows: Column (1) shows the facility classification categories described above. Column (2) shows the number of IRFs in each category. Column (3) shows the number of cases in each category. PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 26253 Column (4) shows the estimated effect of the proposed adjustment to the outlier threshold amount so that estimated outlier payments decrease from approximately 3.8 percent in FY 2007 to 3 percent of total estimated payments for FY 2008. Column (5) shows the estimated effect of the market basket update to the IRF PPS payment rates. Column (6) shows the estimated effect of the update to the IRF labor-related share, wage index, and the final year of the hold harmless policy, in a budget neutral manner. Column (7) compares our estimates of the payments per discharge, incorporating all of the proposed changes reflected in this proposed rule for FY 2008, to our estimates of payments per discharge in FY 2007 (without these proposed changes). The average estimated increase for all IRFs is approximately 2.4 percent. This estimated increase includes the effects of the 3.3 percent market basket update. It also includes the 0.9 percent overall estimated decrease in estimated IRF outlier payments from the proposed update to the outlier threshold amount. Because we are making the remainder of the proposed changes outlined in this proposed rule in a budget-neutral manner, they would not affect total estimated IRF payments in the aggregate. However, as described in more detail in each section, they would affect the estimated distribution of payments among providers. BILLING CODE 4120–07–P E:\FR\FM\08MYP3.SGM 08MYP3 VerDate Aug<31>2005 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 EP08MY07.019</GPH> cprice-sewell on PROD1PC64 with PROPOSALS3 26254 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules BILLING CODE 4120–07–C 3. Impact of the Proposed Update to the Outlier Threshold Amount (Column 4, Table 6) In the FY 2007 IRF PPS final rule (71 FR 48354), we used FY 2004 patientlevel claims data (the best, most complete data available at that time) to set the outlier threshold amount for FY 2007 so that estimated outlier payments would equal 3 percent of total estimated payments for FY 2007. For this proposed rule, we are proposing to update our analysis using FY 2005 data. Using the updated FY 2005 data, we now estimate that IRF outlier payments as a percentage of total estimated payments for FY 2007 increased from 3 percent using the FY 2004 data to approximately 3.8 percent using the updated FY 2005 data. Thus, we are proposing to adjust the outlier threshold amount for FY 2008 to $7,522 to set total estimated outlier payments equal to 3 percent of total estimated payments in FY 2008. The proposed estimated change in total payments between FY 2007 and FY 2008, therefore, includes a 0.9 percent (rounded from 0.85 percent) overall estimated decrease in payments because the estimated outlier portion of total payments is estimated to decrease from approximately 3.8 percent to 3 percent. The impact of this proposed update (as shown in column 4 of Table 6) is to decrease estimated overall payments to IRFs by 0.9 percent. We do not estimate that any group of IRFs would experience an increase in payments from this proposed update. We estimate the largest decrease in payments to be a 1.7 percent decrease in estimated payments to rural IRFs in the Mountain region. cprice-sewell on PROD1PC64 with PROPOSALS3 4. Impact of the Proposed Market Basket Update to the IRF PPS Payment Rates (Column 5, Table 6) In column 5 of Table 6, we present the estimated effects of the proposed market basket update to the IRF PPS payment rates. In the aggregate, and across all hospital groups, the proposed update would result in a 3.3 percent increase in overall estimated payments to IRFs. 5. Impact of the Proposed CBSA Wage Index, Labor-Related Share, and the Hold Harmless Policy for FY 2008 (Column 6, Table 6). In column 6 of Table 6, we present the effects of the proposed budget neutral update of the wage index, labor-related share, and the final year of the hold harmless policy. In FY 2006, we provided a 1-year blended wage index and a 3-year phase out of the rural adjustment for IRFs that changed VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 designation because of the change from MSAs to CBSAs (referenced as the hold harmless policy). We applied the blended wage index to all IRFs and the hold harmless policy to those IRFs that qualify, as described in § 412.624(e)(7), in order to mitigate the impact of the change from the MSA-based labor area definitions to the CBSA-based labor area definitions for IRFs. As discussed in the FY 2007 IRF PPS final rule (71 FR 48345), the blended wage index expired in FY 2007 and will not be applied for discharges occurring on or after October 1, 2006. In addition, FY 2008 is the third and final year of the hold harmless policy, and we are continuing to apply this policy as described in the FY 2006 final rule in a budget neutral manner. As discussed in this proposed rule, we are proposing to revise our methodology to impute a rural wage index value for rural areas without hospital wage data and update the wage index based on the CBSA-based labor market area definitions in a budget neutral manner. We are also applying the third and final year of the hold harmless policy in a budget neutral manner. Thus, in the aggregate, the estimated impact of the proposed update to the wage index and laborrelated share is zero percent. In the aggregate and for all urban IRFs, we do not estimate that these proposed changes would affect overall estimated payments to IRFs. However, we estimate that these proposed changes would have small distributional effects. We estimate a 0.2 percent increase in estimated payments to rural IRFs. We estimate the largest increase in payments to be a 0.7 percent increase for urban IRFs in the Mountain region and for rural IRFs in the Middle Atlantic region. We estimate the largest decrease in payments to be a 0.9 percent decrease for rural IRFs in the New England region. C. Anticipated Effects of the 75 Percent Rule Policy The existing policy for classifying a facility as an IRF, which is described in § 412.23(b)(2), allows the inclusion of comorbidities meeting certain requirements in the calculations used to determine the compliance percentage for cost reporting periods beginning on or after July 1, 2004, and before July 1, 2008. However, for cost reporting periods beginning on or after July 1, 2008, comorbidities will not be eligible for inclusion in the calculations used to determine if the provider meets the 75 percent compliance threshold. As discussed in section II of this proposed rule, we are not proposing to change PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 26255 existing policy. On or after July 1, 2008, we anticipate that IRFs would make adjustments to their admission and coding practices to continue to meet the compliance threshold. Data limitations and two important sources of uncertainty prevent a precise estimate of the effect of this policy at this time. One source of uncertainty is what proportion of patients who would no longer be treated in IRFs would instead be treated by other, lower-cost post-acute care settings such as skilled nursing facilities or home health agencies. Another source of uncertainty is determining how providers will make adjustments on or after July 1, 2008. While we cannot make a precise estimate at this time, we anticipate modest decreases in Medicare payments beginning on or after July 1, 2008. D. Alternatives Considered Because we have determined that this proposed rule would have a significant economic impact on IRFs and on a substantial number of small entities, we will discuss the alternative changes to the IRF PPS that we considered. Section 1886(j)(3)(C) of the Act requires the Secretary to update the IRF PPS payment rates by an increase factor that reflects changes over time in the prices of an appropriate mix of goods and services included in the covered IRF services. As discussed above, we estimate the RPL market basket increase factor for FY 2008 to be 3.3 percent. This increase factor represents the majority of the impact on IRF providers shown in Table 6. Thus, we believe this estimated net increase in payments across all categories of IRFs represents a benefit to IRF providers and, thus, to IRFs that are small entities. We considered maintaining the existing outlier threshold amount for FY 2008 because this proposed update would have a negative impact on IRF providers and, therefore, on small entities. If we maintain the FY 2007 outlier threshold amount, more outlier cases would have qualified for the additional outlier payments in FY 2008. However, analysis of updated FY 2005 data indicates that estimated outlier payments would not equal 3 percent of estimated total payments for FY 2008 unless we proposed to update the outlier threshold amount. Also, we estimate that the effect of this proposal on estimated payments to IRFs is small (less than 1 percent). E. Accounting Statement As required by OMB Circular A–4 (available at https:// www.whitehouse.gov/omb/circulars/ a004/a-4.pdf), in Table 8 below, we E:\FR\FM\08MYP3.SGM 08MYP3 26256 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules compared with FY 2007. We estimate that rehabilitation units and freestanding rehabilitation hospitals in urban areas would both experience a 2.4 percent increase in estimated payments per discharge. We estimate that rehabilitation units in rural areas would experience a 2.6 percent increase in estimated payments per discharge, while freestanding rehabilitation hospitals in rural areas would experience a 3.1 percent increase in estimated payments per discharge. Overall, we estimate that the largest TABLE 8.—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EX- payment increase would be 3.4 percent PENDITURES, FROM THE 2007 IRF among rural IRFs in the Middle Atlantic PPS RATE YEAR TO THE 2008 IRF region. We do not estimate that any group of IRFs would experience an PPS RATE YEAR (IN MILLIONS) overall decrease in payments from the proposed changes in this proposed rule. Category Transfers In accordance with the provisions of Executive Order 12866, this regulation Annualized Monetized $150 million. was reviewed by the Office of Transfers. Management and Budget. From Whom To Federal Government have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this proposed rule. This table provides our best estimate of the increase in Medicare payments under the IRF PPS as a result of the proposed changes presented in this proposed rule based on the data for 1,234 IRFs in our database. All estimated expenditures are classified as transfers to Medicare providers (that is, IRFs). Whom? to IRF Medicare Providers. cprice-sewell on PROD1PC64 with PROPOSALS3 F. Conclusion (Column 7, Table 6) Overall, the estimated payments per discharge for IRFs in FY 2008 are projected to increase by 2.4 percent, compared with those in FY 2007, as reflected in column 7 of Table 6. We estimate that IRFs in urban areas would experience a 2.4 percent increase in estimated payments per discharge compared with FY 2007. We estimate that IRFs in rural areas would experience a 2.7 percent increase in estimated payments per discharge VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 List of Subjects in 42 CFR Part 412 Administrative practice and procedure, Health facilities, Medicare, Puerto Rico, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR chapter IV as follows: PART 412—PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES 1. The authority citation for part 412 continues to read as follows: PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). Subpart P—Prospective Payment for Inpatient Rehabilitation Hospitals and Rehabilitation Units 2. Section 412.624 is amended by revising paragraph (f)(2)(v) to read as follows: § 412.624 Methodology for calculating the Federal prospective payment rates. * * * * * (f) * * * (2) * * * (v) By applying the adjustment described in paragraphs (e)(1), (e)(2), (e)(3), (e)(4), and (e)(7) of this section to the unadjusted payment amount determined in paragraph (f)(2)(iv) of this section to equal the adjusted transfer payment amount, subject to paragraph (e)(5) of this section. (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplemental Medical Insurance Program). Dated: March 22, 2007. Leslie V. Norwalk, Acting Administrator, Centers for Medicare & Medicaid Services. Approved: April 3, 2007. Michael O. Leavitt, Secretary. E:\FR\FM\08MYP3.SGM 08MYP3 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules The following addendum will not appear in the Code of Federal Regulations. Addendum This addendum contains the tables referred to throughout the preamble of this proposed rule. The tables presented below are as follows: Table 1.—Proposed Inpatient Rehabilitation Facility Wage Index for Urban Areas for Discharges Occurring 26257 from October 1, 2007 through September 30, 2008 Table 2.—Proposed Inpatient Rehabilitation Facility Wage Index for Rural Areas for Discharges Occurring from October 1, 2007 through September 30, 2008 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008 CBSA code Urban area (constituent counties) 10180 ....... Abilene, TX ............................................................................................................................................................................ Callahan County, TX. Jones County, TX. Taylor County, TX. ´ Aguadilla-Isabela-San Sebastian, PR ................................................................................................................................... Aguada Municipio, PR. Aguadilla Municipio, PR. ˜ Anasco Municipio, PR. Isabela Municipio, PR. Lares Municipio, PR. Moca Municipio, PR. ´ Rincon Municipio, PR. ´ San Sebastian Municipio, PR. Akron, OH .............................................................................................................................................................................. Portage County, OH. Summit County, OH. Albany, GA ............................................................................................................................................................................. Baker County, GA. Dougherty County, GA. Lee County, GA. Terrell County, GA. Worth County, GA. Albany-Schenectady-Troy, NY .............................................................................................................................................. Albany County, NY. Rensselaer County, NY. Saratoga County, NY. Schenectady County, NY. Schoharie County, NY. Albuquerque, NM ................................................................................................................................................................... Bernalillo County, NM. Sandoval County, NM. Torrance County, NM. Valencia County, NM. Alexandria, LA ....................................................................................................................................................................... Grant Parish, LA. Rapides Parish, LA. Allentown-Bethlehem-Easton, PA-NJ .................................................................................................................................... Warren County, NJ. Carbon County, PA. Lehigh County, PA. Northampton County, PA. Altoona, PA ............................................................................................................................................................................ Blair County, PA. Amarillo, TX ........................................................................................................................................................................... Armstrong County, TX. Carson County, TX. Potter County, TX. Randall County, TX. Ames, IA ................................................................................................................................................................................ Story County, IA. Anchorage, AK ....................................................................................................................................................................... Anchorage Municipality, AK. Matanuska-Susitna Borough, AK. Anderson, IN .......................................................................................................................................................................... Madison County, IN. Anderson, SC ........................................................................................................................................................................ Anderson County, SC. Ann Arbor, MI ........................................................................................................................................................................ Washtenaw County, MI. Anniston-Oxford, AL .............................................................................................................................................................. Calhoun County, AL. 10380 ....... 10420 ....... 10500 ....... 10580 ....... 10740 ....... 10780 ....... 10900 ....... 11020 ....... 11100 ....... 11180 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 11260 ....... 11300 ....... 11340 ....... 11460 ....... 11500 ....... VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM Wage index 08MYP3 0.8000 0.3915 0.8654 0.8991 0.8720 0.9458 0.8006 0.9947 0.8812 0.9169 0.9760 1.2023 0.8681 0.9017 1.0826 0.7770 26258 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code Urban area (constituent counties) 11540 ....... Appleton, WI .......................................................................................................................................................................... Calumet County, WI. Outagamie County, WI. Asheville, NC ......................................................................................................................................................................... Buncombe County, NC. Haywood County, NC. Henderson County, NC. Madison County, NC. Athens-Clarke County, GA .................................................................................................................................................... Clarke County, GA. Madison County, GA. Oconee County, GA. Oglethorpe County, GA. Atlanta-Sandy Springs-Marietta, GA ..................................................................................................................................... Barrow County, GA. Bartow County, GA. Butts County, GA. Carroll County, GA. Cherokee County, GA. Clayton County, GA. Cobb County, GA. Coweta County, GA. Dawson County, GA. DeKalb County, GA. Douglas County, GA. Fayette County, GA. Forsyth County, GA. Fulton County, GA. Gwinnett County, GA. Haralson County, GA. Heard County, GA. Henry County, GA. Jasper County, GA. Lamar County, GA. Meriwether County, GA. Newton County, GA. Paulding County, GA. Pickens County, GA. Pike County, GA. Rockdale County, GA. Spalding County, GA. Walton County, GA. Atlantic City, NJ ..................................................................................................................................................................... Atlantic County, NJ. Auburn-Opelika, AL ............................................................................................................................................................... Lee County, AL. Augusta-Richmond County, GA-SC ...................................................................................................................................... Burke County, GA. Columbia County, GA. McDuffie County, GA. Richmond County, GA. Aiken County, SC. Edgefield County, SC. Austin-Round Rock, TX ......................................................................................................................................................... Bastrop County, TX. Caldwell County, TX. Hays County, TX. Travis County, TX. Williamson County, TX. Bakersfield, CA ...................................................................................................................................................................... Kern County, CA. Baltimore-Towson, MD .......................................................................................................................................................... Anne Arundel County, MD. Baltimore County, MD. Carroll County, MD. Harford County, MD. Howard County, MD. Queen Anne’s County, MD. Baltimore City, MD. Bangor, ME ............................................................................................................................................................................ 11700 ....... 12020 ....... 12060 ....... 12100 ....... 12220 ....... 12260 ....... 12420 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 12540 ....... 12580 ....... 12620 ....... VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM Wage index 08MYP3 0.9455 0.9216 0.9856 0.9762 1.1831 0.8096 0.9667 0.9344 1.0725 1.0088 0.9711 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26259 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 12700 ....... 12940 ....... 12980 ....... 13020 ....... 13140 ....... 13380 ....... 13460 ....... 13644 ....... 13740 ....... 13780 ....... 13820 ....... 13900 ....... 13980 ....... 14020 ....... 14060 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 14260 ....... 14484 ....... 14500 ....... 14540 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Penobscot County, ME. Barnstable Town, MA ............................................................................................................................................................ Barnstable County, MA. Baton Rouge, LA ................................................................................................................................................................... Ascension Parish, LA. East Baton Rouge Parish, LA. East Feliciana Parish, LA. Iberville Parish, LA. Livingston Parish, LA. Pointe Coupee Parish, LA. St. Helena Parish, LA. West Baton Rouge Parish, LA. West Feliciana Parish, LA. Battle Creek, MI ..................................................................................................................................................................... Calhoun County, MI. Bay City, MI ........................................................................................................................................................................... Bay County, MI. Beaumont-Port Arthur, TX ..................................................................................................................................................... Hardin County, TX. Jefferson County, TX. Orange County, TX. Bellingham, WA ..................................................................................................................................................................... Whatcom County, WA. Bend, OR ............................................................................................................................................................................... Deschutes County, OR. Bethesda-Frederick-Gaithersburg, MD .................................................................................................................................. Frederick County, MD. Montgomery County, MD. Billings, MT ............................................................................................................................................................................ Carbon County, MT. Yellowstone County, MT. Binghamton, NY ..................................................................................................................................................................... Broome County, NY. Tioga County, NY. Birmingham-Hoover, AL ........................................................................................................................................................ Bibb County, AL. Blount County, AL. Chilton County, AL. Jefferson County, AL. St. Clair County, AL. Shelby County, AL. Walker County, AL. Bismarck, ND ......................................................................................................................................................................... Burleigh County, ND. Morton County, ND. Blacksburg-Christiansburg-Radford, VA ................................................................................................................................ Giles County, VA. Montgomery County, VA. Pulaski County, VA. Radford City, VA. Bloomington, IN ..................................................................................................................................................................... Greene County, IN. Monroe County, IN. Owen County, IN. Bloomington-Normal, IL ......................................................................................................................................................... McLean County, IL. Boise City-Nampa, ID ............................................................................................................................................................ Ada County, ID. Boise County, ID. Canyon County, ID. Gem County, ID. Owyhee County, ID. Boston-Quincy, MA ................................................................................................................................................................ Norfolk County, MA. Plymouth County, MA. Suffolk County, MA. Boulder, CO ........................................................................................................................................................................... Boulder County, CO. Bowling Green, KY ................................................................................................................................................................ Edmonson County, KY. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 1.2539 0.8084 0.9762 0.9251 0.8595 1.1104 1.0743 1.0903 0.8712 0.8786 0.8894 0.7240 0.8213 0.8533 0.8944 0.9401 1.1679 1.0350 0.8148 26260 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 14740 ....... 14860 ....... 15180 ....... 15260 ....... 15380 ....... 15500 ....... 15540 ....... 15764 ....... 15804 ....... 15940 ....... 15980 ....... 16180 ....... 16220 ....... 16300 ....... 16580 ....... 16620 ....... 16700 ....... 16740 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 16820 ....... 16860 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Warren County, KY. Bremerton-Silverdale, WA ..................................................................................................................................................... Kitsap County, WA. Bridgeport-Stamford-Norwalk, CT ......................................................................................................................................... Fairfield County, CT. Brownsville-Harlingen, TX ..................................................................................................................................................... Cameron County, TX. Brunswick, GA ....................................................................................................................................................................... Brantley County, GA. Glynn County, GA. McIntosh County, GA. Buffalo-Niagara Falls, NY ...................................................................................................................................................... Erie County, NY. Niagara County, NY. Burlington, NC ....................................................................................................................................................................... Alamance County, NC. Burlington-South Burlington, VT ............................................................................................................................................ Chittenden County, VT. Franklin County, VT. Grand Isle County, VT. Cambridge-Newton-Framingham, MA ................................................................................................................................... Middlesex County, MA. Camden, NJ ........................................................................................................................................................................... Burlington County, NJ. Camden County, NJ. Gloucester County, NJ. Canton-Massillon, OH ............................................................................................................................................................ Carroll County, OH. Stark County, OH. Cape Coral-Fort Myers, FL .................................................................................................................................................... Lee County, FL. Carson City, NV ..................................................................................................................................................................... Carson City, NV. Casper, WY ........................................................................................................................................................................... Natrona County, WY. Cedar Rapids, IA ................................................................................................................................................................... Benton County, IA. Jones County, IA. Linn County, IA. Champaign-Urbana, IL .......................................................................................................................................................... Champaign County, IL. Ford County, IL. Piatt County, IL. Charleston, WV ...................................................................................................................................................................... Boone County, WV. Clay County, WV. Kanawha County, WV. Lincoln County, WV. Putnam County, WV. Charleston-North Charleston, SC .......................................................................................................................................... Berkeley County, SC. Charleston County, SC. Dorchester County, SC. Charlotte-Gastonia-Concord, NC-SC .................................................................................................................................... Anson County, NC. Cabarrus County, NC. Gaston County, NC. Mecklenburg County, NC. Union County, NC. York County, SC. Charlottesville, VA ................................................................................................................................................................. Albemarle County, VA. Fluvanna County, VA. Greene County, VA. Nelson County, VA. Charlottesville City, VA. Chattanooga, TN-GA ............................................................................................................................................................. Catoosa County, GA. Dade County, GA. Walker County, GA. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 1.0913 1.2659 0.9430 1.0164 0.9424 0.8674 0.9474 1.0970 1.0392 0.9031 0.9342 1.0025 0.9145 0.8888 0.9644 0.8542 0.9145 0.9554 1.0125 0.8948 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26261 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 16940 ....... 16974 ....... 17020 ....... 17140 ....... 17300 ....... 17420 ....... 17460 ....... 17660 ....... 17780 ....... 17820 ....... 17860 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 17900 ....... 17980 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Hamilton County, TN. Marion County, TN. Sequatchie County, TN. Cheyenne, WY ....................................................................................................................................................................... Laramie County, WY. Chicago-Naperville-Joliet, IL .................................................................................................................................................. Cook County, IL. DeKalb County, IL. DuPage County, IL. Grundy County, IL. Kane County, IL. Kendall County, IL. McHenry County, IL. Will County, IL. Chico, CA ............................................................................................................................................................................... Butte County, CA. Cincinnati-Middletown, OH-KY-IN ......................................................................................................................................... Dearborn County, IN. Franklin County, IN. Ohio County, IN. Boone County, KY. Bracken County, KY. Campbell County, KY. Gallatin County, KY. Grant County, KY. Kenton County, KY. Pendleton County, KY. Brown County, OH. Butler County, OH. Clermont County, OH. Hamilton County, OH. Warren County, OH. Clarksville, TN-KY .................................................................................................................................................................. Christian County, KY. Trigg County, KY. Montgomery County, TN. Stewart County, TN. Cleveland, TN ........................................................................................................................................................................ Bradley County, TN. Polk County, TN. Cleveland-Elyria-Mentor, OH ................................................................................................................................................. Cuyahoga County, OH. Geauga County, OH. Lake County, OH. Lorain County, OH. Medina County, OH. Coeur d’Alene, ID .................................................................................................................................................................. Kootenai County, ID. College Station-Bryan, TX ..................................................................................................................................................... Brazos County, TX. Burleson County, TX. Robertson County, TX. Colorado Springs, CO ........................................................................................................................................................... El Paso County, CO. Teller County, CO. Columbia, MO ........................................................................................................................................................................ Boone County, MO. Howard County, MO. Columbia, SC ......................................................................................................................................................................... Calhoun County, SC. Fairfield County, SC. Kershaw County, SC. Lexington County, SC. Richland County, SC. Saluda County, SC. Columbus, GA-AL .................................................................................................................................................................. Russell County, AL. Chattahoochee County, GA. Harris County, GA. Marion County, GA. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.9060 1.0751 1.1053 0.9601 0.8436 0.8109 0.9400 0.9344 0.9045 0.9701 0.8542 0.8933 0.8239 26262 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 18020 ....... 18140 ....... 18580 ....... 18700 ....... 19060 ....... 19124 ....... 19140 ....... 19180 ....... 19260 ....... 19340 ....... 19380 ....... 19460 ....... 19500 ....... 19660 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 19740 ....... 19780 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Muscogee County, GA. Columbus, IN ......................................................................................................................................................................... Bartholomew County, IN. Columbus, OH ....................................................................................................................................................................... Delaware County, OH. Fairfield County, OH. Franklin County, OH. Licking County, OH. Madison County, OH. Morrow County, OH. Pickaway County, OH. Union County, OH. Corpus Christi, TX ................................................................................................................................................................. Aransas County, TX. Nueces County, TX. San Patricio County, TX. Corvallis, OR .......................................................................................................................................................................... Benton County, OR. Cumberland, MD-WV ............................................................................................................................................................. Allegany County, MD. Mineral County, WV. Dallas-Plano-Irving, TX .......................................................................................................................................................... Collin County, TX. Dallas County, TX. Delta County, TX. Denton County, TX. Ellis County, TX. Hunt County, TX. Kaufman County, TX. Rockwall County, TX. Dalton, GA ............................................................................................................................................................................. Murray County, GA. Whitfield County, GA. Danville, IL ............................................................................................................................................................................. Vermilion County, IL. Danville, VA ........................................................................................................................................................................... Pittsylvania County, VA. Danville City, VA. Davenport-Moline-Rock Island, IA-IL ..................................................................................................................................... Henry County, IL. Mercer County, IL. Rock Island County, IL. Scott County, IA. Dayton, OH ............................................................................................................................................................................ Greene County, OH. Miami County, OH. Montgomery County, OH. Preble County, OH. Decatur, AL ............................................................................................................................................................................ Lawrence County, AL. Morgan County, AL. Decatur, IL ............................................................................................................................................................................. Macon County, IL. Deltona-Daytona Beach-Ormond Beach, FL ......................................................................................................................... Volusia County, FL. Denver-Aurora, CO ................................................................................................................................................................ Adams County, CO. Arapahoe County, CO. Broomfield County, CO. Clear Creek County, CO. Denver County, CO. Douglas County, CO. Elbert County, CO. Gilpin County, CO. Jefferson County, CO. Park County, CO. Des Moines-West Des Moines, IA ........................................................................................................................................ Dallas County, IA. Guthrie County, IA. Madison County, IA. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.9318 1.0107 0.8564 1.1546 0.8446 1.0075 0.9093 0.9266 0.8451 0.8846 0.9037 0.8159 0.8172 0.9263 1.0930 0.9214 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26263 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 19804 ....... 20020 ....... 20100 ....... 20220 ....... 20260 ....... 20500 ....... 20740 ....... 20764 ....... 20940 ....... 21060 ....... 21140 ....... 21300 ....... 21340 ....... 21500 ....... 21604 ....... 21660 ....... 21780 ....... 21820 ....... 21940 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 22020 ....... 22140 ....... 22180 ....... 22220 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Polk County, IA. Warren County, IA. Detroit-Livonia-Dearborn, MI ................................................................................................................................................. Wayne County, MI. Dothan, AL ............................................................................................................................................................................. Geneva County, AL. Henry County, AL. Houston County, AL. Dover, DE .............................................................................................................................................................................. Kent County, DE. Dubuque, IA ........................................................................................................................................................................... Dubuque County, IA. Duluth, MN-WI ....................................................................................................................................................................... Carlton County, MN. St. Louis County, MN. Douglas County, WI. Durham, NC ........................................................................................................................................................................... Chatham County, NC. Durham County, NC. Orange County, NC. Person County, NC. Eau Claire, WI ....................................................................................................................................................................... Chippewa County, WI. Eau Claire County, WI. Edison, NJ ............................................................................................................................................................................. Middlesex County, NJ. Monmouth County, NJ. Ocean County, NJ. Somerset County, NJ. El Centro, CA ......................................................................................................................................................................... Imperial County, CA. Elizabethtown, KY .................................................................................................................................................................. Hardin County, KY. Larue County, KY. Elkhart-Goshen, IN ................................................................................................................................................................ Elkhart County, IN. Elmira, NY .............................................................................................................................................................................. Chemung County, NY. El Paso, TX ............................................................................................................................................................................ El Paso County, TX. Erie, PA .................................................................................................................................................................................. Erie County, PA. Essex County, MA ................................................................................................................................................................. Essex County, MA. Eugene-Springfield, OR ......................................................................................................................................................... Lane County, OR. Evansville, IN-KY ................................................................................................................................................................... Gibson County, IN. Posey County, IN. Vanderburgh County, IN. Warrick County, IN. Henderson County, KY. Webster County, KY. Fairbanks, AK ........................................................................................................................................................................ Fairbanks North Star Borough, AK. Fajardo, PR ............................................................................................................................................................................ Ceiba Municipio, PR. Fajardo Municipio, PR. Luquillo Municipio, PR. Fargo, ND-MN ....................................................................................................................................................................... Cass County, ND. Clay County, MN. Farmington, NM ..................................................................................................................................................................... San Juan County, NM. Fayetteville, NC ..................................................................................................................................................................... Cumberland County, NC. Hoke County, NC. Fayetteville-Springdale-Rogers, AR-MO ............................................................................................................................... Benton County, AR. Madison County, AR. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 1.0281 0.7381 0.9847 0.9133 1.0042 0.9826 0.9630 1.1190 0.9076 0.8697 0.9426 0.8240 0.9053 0.8827 1.0418 1.0876 0.9071 1.1059 0.4036 0.8250 0.8589 0.8945 0.8865 26264 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 22380 ....... 22420 ....... 22500 ....... 22520 ....... 22540 ....... 22660 ....... 22744 ....... 22900 ....... 23020 ....... 23060 ....... 23104 ....... 23420 ....... 23460 ....... 23540 ....... 23580 ....... 23844 ....... 24020 ....... 24140 ....... 24220 ....... 24300 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 24340 ....... 24500 ....... 24540 ....... 24580 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Washington County, AR. McDonald County, MO. Flagstaff, AZ .......................................................................................................................................................................... Coconino County, AZ. Flint, MI .................................................................................................................................................................................. Genesee County, MI. Florence, SC .......................................................................................................................................................................... Darlington County, SC. Florence County, SC. Florence-Muscle Shoals, AL .................................................................................................................................................. Colbert County, AL. Lauderdale County, AL. Fond du Lac, WI .................................................................................................................................................................... Fond du Lac County, WI. Fort Collins-Loveland, CO ..................................................................................................................................................... Larimer County, CO. Fort Lauderdale-Pompano Beach-Deerfield Beach, FL ........................................................................................................ Broward County, FL. Fort Smith, AR-OK ................................................................................................................................................................. Crawford County, AR. Franklin County, AR. Sebastian County, AR. Le Flore County, OK. Sequoyah County, OK. Fort Walton Beach-Crestview-Destin, FL .............................................................................................................................. Okaloosa County, FL. Fort Wayne, IN ...................................................................................................................................................................... Allen County, IN. Wells County, IN. Whitley County, IN. Fort Worth-Arlington, TX ........................................................................................................................................................ Johnson County, TX. Parker County, TX. Tarrant County, TX. Wise County, TX. Fresno, CA ............................................................................................................................................................................. Fresno County, CA. Gadsden, AL .......................................................................................................................................................................... Etowah County, AL. Gainesville, FL ....................................................................................................................................................................... Alachua County, FL. Gilchrist County, FL. Gainesville, GA ...................................................................................................................................................................... Hall County, GA. Gary, IN ................................................................................................................................................................................. Jasper County, IN. Lake County, IN. Newton County, IN. Porter County, IN. Glens Falls, NY ...................................................................................................................................................................... Warren County, NY. Washington County, NY. Goldsboro, NC ....................................................................................................................................................................... Wayne County, NC. Grand Forks, ND-MN ............................................................................................................................................................. Polk County, MN. Grand Forks County, ND. Grand Junction, CO ............................................................................................................................................................... Mesa County, CO. Grand Rapids-Wyoming, MI .................................................................................................................................................. Barry County, MI. Ionia County, MI. Kent County, MI. Newaygo County, MI. Great Falls, MT ...................................................................................................................................................................... Cascade County, MT. Greeley, CO ........................................................................................................................................................................... Weld County, CO. Green Bay, WI ....................................................................................................................................................................... Brown County, WI. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 1.1601 1.0969 0.8388 0.7843 1.0063 0.9544 1.0133 0.7731 0.8643 0.9517 0.9569 1.0943 0.8066 0.9277 0.8958 0.9334 0.8324 0.9171 0.7949 0.9668 0.9455 0.8598 0.9602 0.9787 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26265 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 24660 ....... 24780 ....... 24860 ....... 25020 ....... 25060 ....... 25180 ....... 25260 ....... 25420 ....... 25500 ....... 25540 ....... 25620 ....... 25860 ....... 25980 ....... 26100 ....... 26180 ....... 26300 ....... 26380 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 26420 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Kewaunee County, WI. Oconto County, WI. Greensboro-High Point, NC ................................................................................................................................................... Guilford County, NC. Randolph County, NC. Rockingham County, NC. Greenville, NC ....................................................................................................................................................................... Greene County, NC. Pitt County, NC. Greenville, SC ........................................................................................................................................................................ Greenville County, SC. Laurens County, SC. Pickens County, SC. Guayama, PR ........................................................................................................................................................................ Arroyo Municipio, PR. Guayama Municipio, PR. Patillas Municipio, PR. Gulfport-Biloxi, MS ................................................................................................................................................................. Hancock County, MS. Harrison County, MS. Stone County, MS. Hagerstown-Martinsburg, MD-WV ......................................................................................................................................... Washington County, MD. Berkeley County, WV. Morgan County, WV. Hanford-Corcoran, CA ........................................................................................................................................................... Kings County, CA. Harrisburg-Carlisle, PA .......................................................................................................................................................... Cumberland County, PA. Dauphin County, PA. Perry County, PA. Harrisonburg, VA ................................................................................................................................................................... Rockingham County, VA. Harrisonburg City, VA. Hartford-West Hartford-East Hartford, CT ............................................................................................................................. Hartford County, CT. Litchfield County, CT. Middlesex County, CT. Tolland County, CT. Hattiesburg, MS ..................................................................................................................................................................... Forrest County, MS. Lamar County, MS. Perry County, MS. Hickory-Lenoir-Morganton, NC .............................................................................................................................................. Alexander County, NC. Burke County, NC. Caldwell County, NC. Catawba County, NC. Hinesville-Fort Stewart, GA 1 ................................................................................................................................................. Liberty County, GA. Long County, GA. Holland-Grand Haven, MI ...................................................................................................................................................... Ottawa County, MI. Honolulu, HI ........................................................................................................................................................................... Honolulu County, HI. Hot Springs, AR ..................................................................................................................................................................... Garland County, AR. Houma-Bayou Cane-Thibodaux, LA ...................................................................................................................................... Lafourche Parish, LA. Terrebonne Parish, LA. Houston-Sugar Land-Baytown, TX ........................................................................................................................................ Austin County, TX. Brazoria County, TX. Chambers County, TX. Fort Bend County, TX. Galveston County, TX. Harris County, TX. Liberty County, TX. Montgomery County, TX. San Jacinto County, TX. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.8866 0.9432 0.9804 0.3235 0.8915 0.9038 1.0282 0.9402 0.9073 1.0894 0.7430 0.9010 0.9178 0.9163 1.1096 0.8782 0.8082 1.0008 26266 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 26580 ....... 26620 ....... 26820 ....... 26900 ....... 26980 ....... 27060 ....... 27100 ....... 27140 ....... 27180 ....... 27260 ....... 27340 ....... 27500 ....... 27620 ....... 27740 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 27780 ....... 27860 ....... 27900 ....... 28020 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Waller County, TX. Huntington-Ashland, WV-KY-OH ........................................................................................................................................... Boyd County, KY. Greenup County, KY. Lawrence County, OH. Cabell County, WV. Wayne County, WV. Huntsville, AL ......................................................................................................................................................................... Limestone County, AL. Madison County, AL. Idaho Falls, ID ....................................................................................................................................................................... Bonneville County, ID. Jefferson County, ID. Indianapolis-Carmel, IN ......................................................................................................................................................... Boone County, IN. Brown County, IN. Hamilton County, IN. Hancock County, IN. Hendricks County, IN. Johnson County, IN. Marion County, IN. Morgan County, IN. Putnam County, IN. Shelby County, IN. Iowa City, IA .......................................................................................................................................................................... Johnson County, IA. Washington County, IA. Ithaca, NY .............................................................................................................................................................................. Tompkins County, NY. Jackson, MI ............................................................................................................................................................................ Jackson County, MI. Jackson, MS .......................................................................................................................................................................... Copiah County, MS. Hinds County, MS. Madison County, MS. Rankin County, MS. Simpson County, MS. Jackson, TN ........................................................................................................................................................................... Chester County, TN. Madison County, TN. Jacksonville, FL ..................................................................................................................................................................... Baker County, FL. Clay County, FL. Duval County, FL. Nassau County, FL. St. Johns County, FL. Jacksonville, NC .................................................................................................................................................................... Onslow County, NC. Janesville, WI ......................................................................................................................................................................... Rock County, WI. Jefferson City, MO ................................................................................................................................................................. Callaway County, MO. Cole County, MO. Moniteau County, MO. Osage County, MO. Johnson City, TN ................................................................................................................................................................... Carter County, TN. Unicoi County, TN. Washington County, TN. Johnstown, PA ....................................................................................................................................................................... Cambria County, PA. Jonesboro, AR ....................................................................................................................................................................... Craighead County, AR. Poinsett County, AR. Joplin, MO .............................................................................................................................................................................. Jasper County, MO. Newton County, MO. Kalamazoo-Portage, MI ......................................................................................................................................................... Kalamazoo County, MI. Van Buren County, MI. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.8997 0.9007 0.9088 0.9895 0.9714 0.9928 0.9560 0.8271 0.8853 0.9165 0.8231 0.9655 0.8332 0.8043 0.8620 0.7662 0.8605 1.0704 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26267 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code Urban area (constituent counties) 28100 ....... Kankakee-Bradley, IL ............................................................................................................................................................ Kankakee County, IL. Kansas City, MO-KS .............................................................................................................................................................. Franklin County, KS. Johnson County, KS. Leavenworth County, KS. Linn County, KS. Miami County, KS. Wyandotte County, KS. Bates County, MO. Caldwell County, MO. Cass County, MO. Clay County, MO. Clinton County, MO. Jackson County, MO. Lafayette County, MO. Platte County, MO. Ray County, MO. Kennewick-Richland-Pasco, WA ........................................................................................................................................... Benton County, WA. Franklin County, WA. Killeen-Temple-Fort Hood, TX ............................................................................................................................................... Bell County, TX. Coryell County, TX. Lampasas County, TX. Kingsport-Bristol-Bristol, TN-VA ............................................................................................................................................ Hawkins County, TN. Sullivan County, TN. Bristol City, VA. Scott County, VA. Washington County, VA. Kingston, NY .......................................................................................................................................................................... Ulster County, NY. Knoxville, TN .......................................................................................................................................................................... Anderson County, TN. Blount County, TN. Knox County, TN. Loudon County, TN. Union County, TN. Kokomo, IN ............................................................................................................................................................................ Howard County, IN. Tipton County, IN. La Crosse, WI-MN ................................................................................................................................................................. Houston County, MN. La Crosse County, WI. Lafayette, IN .......................................................................................................................................................................... Benton County, IN. Carroll County, IN. Tippecanoe County, IN. Lafayette, LA .......................................................................................................................................................................... Lafayette Parish, LA. St. Martin Parish, LA. Lake Charles, LA ................................................................................................................................................................... Calcasieu Parish, LA. Cameron Parish, LA. Lake County-Kenosha County, IL-WI .................................................................................................................................... Lake County, IL. Kenosha County, WI. Lakeland, FL .......................................................................................................................................................................... Polk County, FL. Lancaster, PA ........................................................................................................................................................................ Lancaster County, PA. Lansing-East Lansing, MI ...................................................................................................................................................... Clinton County, MI. Eaton County, MI. Ingham County, MI. Laredo, TX ............................................................................................................................................................................. Webb County, TX. Las Cruces, NM ..................................................................................................................................................................... Dona Ana County, NM. 28140 ....... 28420 ....... 28660 ....... 28700 ....... 28740 ....... 28940 ....... 29020 ....... 29100 ....... 29140 ....... 29180 ....... 29340 ....... 29404 ....... 29460 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 29540 ....... 29620 ....... 29700 ....... 29740 ....... VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM Wage index 08MYP3 1.0083 0.9495 1.0343 0.8901 0.7985 0.9367 0.8249 0.9669 0.9426 0.8931 0.8289 0.7914 1.0570 0.8879 0.9589 1.0088 0.7811 0.9273 26268 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code Urban area (constituent counties) 29820 ....... Las Vegas-Paradise, NV ....................................................................................................................................................... Clark County, NV. Lawrence, KS ........................................................................................................................................................................ Douglas County, KS. Lawton, OK ............................................................................................................................................................................ Comanche County, OK. Lebanon, PA .......................................................................................................................................................................... Lebanon County, PA. Lewiston, ID-WA .................................................................................................................................................................... Nez Perce County, ID. Asotin County, WA. Lewiston-Auburn, ME ............................................................................................................................................................ Androscoggin County, ME. Lexington-Fayette, KY ........................................................................................................................................................... Bourbon County, KY. Clark County, KY. Fayette County, KY. Jessamine County, KY. Scott County, KY. Woodford County, KY. Lima, OH ................................................................................................................................................................................ Allen County, OH. Lincoln, NE ............................................................................................................................................................................ Lancaster County, NE. Seward County, NE. Little Rock-North Little Rock, AR ........................................................................................................................................... Faulkner County, AR. Grant County, AR. Lonoke County, AR. Perry County, AR. Pulaski County, AR. Saline County, AR. Logan, UT-ID ......................................................................................................................................................................... Franklin County, ID. Cache County, UT. Longview, TX ......................................................................................................................................................................... Gregg County, TX. Rusk County, TX. Upshur County, TX. Longview, WA ........................................................................................................................................................................ Cowlitz County, WA. Los Angeles-Long Beach-Glendale, CA ................................................................................................................................ Los Angeles County, CA. Louisville, KY-IN .................................................................................................................................................................... Clark County, IN. Floyd County, IN. Harrison County, IN. Washington County, IN. Bullitt County, KY. Henry County, KY. Jefferson County, KY. Meade County, KY. Nelson County, KY. Oldham County, KY. Shelby County, KY. Spencer County, KY. Trimble County, KY. Lubbock, TX ........................................................................................................................................................................... Crosby County, TX. Lubbock County, TX. Lynchburg, VA ....................................................................................................................................................................... Amherst County, VA. Appomattox County, VA. Bedford County, VA. Campbell County, VA. Bedford City, VA. Lynchburg City, VA. Macon, GA ............................................................................................................................................................................. Bibb County, GA. Crawford County, GA. 29940 ....... 30020 ....... 30140 ....... 30300 ....... 30340 ....... 30460 ....... 30620 ....... 30700 ....... 30780 ....... 30860 ....... 30980 ....... 31020 ....... 31084 ....... 31140 ....... 31180 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 31340 ....... 31420 ....... VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM Wage index 08MYP3 1.1430 0.8365 0.8065 0.8679 0.9853 0.9126 0.9181 0.9042 1.0092 0.8890 0.9022 0.8788 1.0011 1.1760 0.9118 0.8613 0.8694 0.9519 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26269 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 31460 ....... 31540 ....... 31700 ....... 31900 ....... 32420 ....... 32580 ....... 32780 ....... 32820 ....... 32900 ....... 33124 ....... 33140 ....... 33260 ....... 33340 ....... 33460 ....... 33540 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 33660 ....... 33700 ....... 33740 ....... 33780 ....... 33860 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Jones County, GA. Monroe County, GA. Twiggs County, GA. Madera, CA ............................................................................................................................................................................ Madera County, CA. Madison, WI ........................................................................................................................................................................... Columbia County, WI. Dane County, WI. Iowa County, WI. Manchester-Nashua, NH ....................................................................................................................................................... Hillsborough County, NH. Merrimack County, NH. Mansfield, OH ........................................................................................................................................................................ Richland County, OH. ¨ Mayaguez, PR ....................................................................................................................................................................... Hormigueros Municipio, PR. ¨ Mayaguez Municipio, PR. McAllen-Edinburg-Pharr, TX .................................................................................................................................................. Hidalgo County, TX. Medford, OR .......................................................................................................................................................................... Jackson County, OR. Memphis, TN-MS-AR ............................................................................................................................................................. Crittenden County, AR. DeSoto County, MS. Marshall County, MS. Tate County, MS. Tunica County, MS. Fayette County, TN. Shelby County, TN. Tipton County, TN. Merced, CA ............................................................................................................................................................................ Merced County, CA. Miami-Miami Beach-Kendall, FL ............................................................................................................................................ Miami-Dade County, FL. Michigan City-La Porte, IN .................................................................................................................................................... LaPorte County, IN. Midland, TX ............................................................................................................................................................................ Midland County, TX. Milwaukee-Waukesha-West Allis, WI .................................................................................................................................... Milwaukee County, WI. Ozaukee County, WI. Washington County, WI. Waukesha County, WI. Minneapolis-St. Paul-Bloomington, MN-WI ........................................................................................................................... Anoka County, MN. Carver County, MN. Chisago County, MN. Dakota County, MN. Hennepin County, MN. Isanti County, MN. Ramsey County, MN. Scott County, MN. Sherburne County, MN. Washington County, MN. Wright County, MN. Pierce County, WI. St. Croix County, WI. Missoula, MT ......................................................................................................................................................................... Missoula County, MT. Mobile, AL .............................................................................................................................................................................. Mobile County, AL. Modesto, CA .......................................................................................................................................................................... Stanislaus County, CA. Monroe, LA ............................................................................................................................................................................ Ouachita Parish, LA. Union Parish, LA. Monroe, MI ............................................................................................................................................................................. Monroe County, MI. Montgomery, AL .................................................................................................................................................................... Autauga County, AL. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.8154 1.0840 1.0243 0.9271 0.3848 0.8773 1.0818 0.9373 1.1471 0.9812 0.9118 0.9786 1.0218 1.0946 0.8928 0.7913 1.1729 0.7997 0.9707 0.8009 26270 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 34060 ....... 34100 ....... 34580 ....... 34620 ....... 34740 ....... 34820 ....... 34900 ....... 34940 ....... 34980 ....... 35004 ....... 35084 ....... 35300 ....... 35380 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 35644 ....... 35660 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Elmore County, AL. Lowndes County, AL. Montgomery County, AL. Morgantown, WV ................................................................................................................................................................... Monongalia County, WV. Preston County, WV. Morristown, TN ...................................................................................................................................................................... Grainger County, TN. Hamblen County, TN. Jefferson County, TN. Mount Vernon-Anacortes, WA ............................................................................................................................................... Skagit County, WA. Muncie, IN .............................................................................................................................................................................. Delaware County, IN. Muskegon-Norton Shores, MI ................................................................................................................................................ Muskegon County, MI. Myrtle Beach-Conway-North Myrtle Beach, SC .................................................................................................................... Horry County, SC. Napa, CA ............................................................................................................................................................................... Napa County, CA. Naples-Marco Island, FL ....................................................................................................................................................... Collier County, FL. Nashville-Davidson—Murfreesboro, TN ................................................................................................................................ Cannon County, TN. Cheatham County, TN. Davidson County, TN. Dickson County, TN. Hickman County, TN. Macon County, TN. Robertson County, TN. Rutherford County, TN. Smith County, TN. Sumner County, TN. Trousdale County, TN. Williamson County, TN. Wilson County, TN. Nassau-Suffolk, NY ............................................................................................................................................................... Nassau County, NY. Suffolk County, NY. Newark-Union, NJ-PA ............................................................................................................................................................ Essex County, NJ. Hunterdon County, NJ. Morris County, NJ. Sussex County, NJ. Union County, NJ. Pike County, PA. New Haven-Milford, CT ......................................................................................................................................................... New Haven County, CT. New Orleans-Metairie-Kenner, LA ......................................................................................................................................... Jefferson Parish, LA. Orleans Parish, LA. Plaquemines Parish, LA. St. Bernard Parish, LA. St. Charles Parish, LA. St. John the Baptist Parish, LA. St. Tammany Parish, LA. New York-Wayne-White Plains, NY-NJ ................................................................................................................................. Bergen County, NJ. Hudson County, NJ. Passaic County, NJ. Bronx County, NY. Kings County, NY. New York County, NY. Putnam County, NY. Queens County, NY. Richmond County, NY. Rockland County, NY. Westchester County, NY. Niles-Benton Harbor, MI ........................................................................................................................................................ Berrien County, MI. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.8423 0.7933 1.0517 0.8562 0.9941 0.8810 1.3374 0.9941 0.9847 1.2662 1.1892 1.1953 0.8831 1.3177 0.8915 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26271 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code Urban area (constituent counties) 35980 ....... Norwich-New London, CT ..................................................................................................................................................... New London County, CT. Oakland-Fremont-Hayward, CA ............................................................................................................................................ Alameda County, CA. Contra Costa County, CA. Ocala, FL ............................................................................................................................................................................... Marion County, FL. Ocean City, NJ ...................................................................................................................................................................... Cape May County, NJ. Odessa, TX ............................................................................................................................................................................ Ector County, TX. Ogden-Clearfield, UT ............................................................................................................................................................. Davis County, UT. Morgan County, UT. Weber County, UT. Oklahoma City, OK ................................................................................................................................................................ Canadian County, OK. Cleveland County, OK. Grady County, OK. Lincoln County, OK. Logan County, OK. McClain County, OK. Oklahoma County, OK. Olympia, WA .......................................................................................................................................................................... Thurston County, WA. Omaha-Council Bluffs, NE-IA ................................................................................................................................................ Harrison County, IA. Mills County, IA. Pottawattamie County, IA. Cass County, NE. Douglas County, NE. Sarpy County, NE. Saunders County, NE. Washington County, NE. Orlando, FL ............................................................................................................................................................................ Lake County, FL. Orange County, FL. Osceola County, FL. Seminole County, FL. Oshkosh-Neenah, WI ............................................................................................................................................................ Winnebago County, WI. Owensboro, KY ...................................................................................................................................................................... Daviess County, KY. Hancock County, KY. McLean County, KY. Oxnard-Thousand Oaks-Ventura, CA ................................................................................................................................... Ventura County, CA. Palm Bay-Melbourne-Titusville, FL ........................................................................................................................................ Brevard County, FL. Panama City-Lynn Haven, FL ............................................................................................................................................... Bay County, FL. Parkersburg-Marietta, WV-OH ............................................................................................................................................... Washington County, OH. Pleasants County, WV. Wirt County, WV. Wood County, WV. Pascagoula, MS ..................................................................................................................................................................... George County, MS. Jackson County, MS. Pensacola-Ferry Pass-Brent, FL ........................................................................................................................................... Escambia County, FL. Santa Rosa County, FL. Peoria, IL ............................................................................................................................................................................... Marshall County, IL. Peoria County, IL. Stark County, IL. Tazewell County, IL. Woodford County, IL. Philadelphia, PA .................................................................................................................................................................... Bucks County, PA. 36084 ....... 36100 ....... 36140 ....... 36220 ....... 36260 ....... 36420 ....... 36500 ....... 36540 ....... 36740 ....... 36780 ....... 36980 ....... 37100 ....... 37340 ....... 37460 ....... 37620 ....... 37700 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 37860 ....... 37900 ....... 37964 ....... VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM Wage index 08MYP3 1.1932 1.5819 0.8867 1.0472 1.0073 0.8995 0.8843 1.1081 0.9450 0.9452 0.9315 0.8748 1.1546 0.9443 0.8027 0.7977 0.8215 0.8000 0.8982 1.0996 26272 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 38060 ....... 38220 ....... 38300 ....... 38340 ....... 38540 ....... 38660 ....... 38860 ....... 38900 ....... 38940 ....... 39100 ....... 39140 ....... 39300 ....... 39340 ....... 39380 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 39460 ....... 39540 ....... 39580 ....... 39660 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Chester County, PA. Delaware County, PA. Montgomery County, PA. Philadelphia County, PA. Phoenix-Mesa-Scottsdale, AZ ............................................................................................................................................... Maricopa County, AZ. Pinal County, AZ. Pine Bluff, AR ........................................................................................................................................................................ Cleveland County, AR. Jefferson County, AR. Lincoln County, AR. Pittsburgh, PA ........................................................................................................................................................................ Allegheny County, PA. Armstrong County, PA. Beaver County, PA. Butler County, PA. Fayette County, PA. Washington County, PA. Westmoreland County, PA. Pittsfield, MA .......................................................................................................................................................................... Berkshire County, MA. Pocatello, ID .......................................................................................................................................................................... Bannock County, ID. Power County, ID. Ponce, PR .............................................................................................................................................................................. ´ Juana Dıaz Municipio, PR. Ponce Municipio, PR. Villalba Municipio, PR. Portland-South Portland-Biddeford, ME ................................................................................................................................ Cumberland County, ME. Sagadahoc County, ME. York County, ME. Portland-Vancouver-Beaverton, OR-WA ............................................................................................................................... Clackamas County, OR. Columbia County, OR. Multnomah County, OR. Washington County, OR. Yamhill County, OR. Clark County, WA. Skamania County, WA. Port St. Lucie-Fort Pierce, FL ................................................................................................................................................ Martin County, FL. St. Lucie County, FL. Poughkeepsie-Newburgh-Middletown, NY ............................................................................................................................ Dutchess County, NY. Orange County, NY. Prescott, AZ ........................................................................................................................................................................... Yavapai County, AZ. Providence-New Bedford-Fall River, RI-MA .......................................................................................................................... Bristol County, MA. Bristol County, RI. Kent County, RI. Newport County, RI. Providence County, RI. Washington County, RI. Provo-Orem, UT .................................................................................................................................................................... Juab County, UT. Utah County, UT. Pueblo, CO ............................................................................................................................................................................ Pueblo County, CO. Punta Gorda, FL .................................................................................................................................................................... Charlotte County, FL. Racine, WI ............................................................................................................................................................................. Racine County, WI. Raleigh-Cary, NC ................................................................................................................................................................... Franklin County, NC. Johnston County, NC. Wake County, NC. Rapid City, SD ....................................................................................................................................................................... Meade County, SD. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 1.0287 0.8383 0.8674 1.0266 0.9400 0.4842 0.9908 1.1416 0.9833 1.0911 0.9836 1.0783 0.9537 0.8753 0.9405 0.9356 0.9864 0.8833 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26273 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 39740 ....... 39820 ....... 39900 ....... 40060 ....... 40140 ....... 40220 ....... 40340 ....... 40380 ....... 40420 ....... 40484 ....... 40580 ....... 40660 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 40900 ....... 40980 ....... 41060 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Pennington County, SD. Reading, PA ........................................................................................................................................................................... Berks County, PA. Redding, CA .......................................................................................................................................................................... Shasta County, CA. Reno-Sparks, NV ................................................................................................................................................................... Storey County, NV. Washoe County, NV. Richmond, VA ........................................................................................................................................................................ Amelia County, VA. Caroline County, VA. Charles City County, VA. Chesterfield County, VA. Cumberland County, VA. Dinwiddie County, VA. Goochland County, VA. Hanover County, VA. Henrico County, VA. King and Queen County, VA. King William County, VA. Louisa County, VA. New Kent County, VA. Powhatan County, VA. Prince George County, VA. Sussex County, VA. Colonial Heights City, VA. Hopewell City, VA. Petersburg City, VA. Richmond City, VA. Riverside-San Bernardino-Ontario, CA ................................................................................................................................. Riverside County, CA. San Bernardino County, CA. Roanoke, VA .......................................................................................................................................................................... Botetourt County, VA. Craig County, VA. Franklin County, VA. Roanoke County, VA. Roanoke City, VA. Salem City, VA. Rochester, MN ....................................................................................................................................................................... Dodge County, MN. Olmsted County, MN. Wabasha County, MN. Rochester, NY ....................................................................................................................................................................... Livingston County, NY. Monroe County, NY. Ontario County, NY. Orleans County, NY. Wayne County, NY. Rockford, IL ........................................................................................................................................................................... Boone County, IL. Winnebago County, IL. Rockingham County-Strafford County, NH ........................................................................................................................... Rockingham County, NH. Strafford County, NH. Rocky Mount, NC .................................................................................................................................................................. Edgecombe County, NC. Nash County, NC. Rome, GA .............................................................................................................................................................................. Floyd County, GA. Sacramento—Arden-Arcade—Roseville, CA ........................................................................................................................ El Dorado County, CA. Placer County, CA. Sacramento County, CA. Yolo County, CA. Saginaw-Saginaw Township North, MI ................................................................................................................................. Saginaw County, MI. St. Cloud, MN ........................................................................................................................................................................ Benton County, MN. Stearns County, MN. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.9622 1.3198 1.1963 0.9177 1.0904 0.8647 1.1408 0.8994 0.9989 1.0159 0.8854 0.9193 1.3372 0.8874 1.0362 26274 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code Urban area (constituent counties) 41100 ....... St. George, UT ...................................................................................................................................................................... Washington County, UT. St. Joseph, MO-KS ................................................................................................................................................................ Doniphan County, KS. Andrew County, MO. Buchanan County, MO. DeKalb County, MO. St. Louis, MO-IL ..................................................................................................................................................................... Bond County, IL. Calhoun County, IL. Clinton County, IL. Jersey County, IL. Macoupin County, IL. Madison County, IL. Monroe County, IL. St. Clair County, IL. Crawford County, MO. Franklin County, MO. Jefferson County, MO. Lincoln County, MO. St. Charles County, MO. St. Louis County, MO. Warren County, MO. Washington County, MO. St. Louis City, MO. Salem, OR ............................................................................................................................................................................. Marion County, OR. Polk County, OR. Salinas, CA ............................................................................................................................................................................ Monterey County, CA. Salisbury, MD ........................................................................................................................................................................ Somerset County, MD. Wicomico County, MD. Salt Lake City, UT ................................................................................................................................................................. Salt Lake County, UT. Summit County, UT. Tooele County, UT. San Angelo, TX ..................................................................................................................................................................... Irion County, TX. Tom Green County, TX. San Antonio, TX .................................................................................................................................................................... Atascosa County, TX. Bandera County, TX. Bexar County, TX. Comal County, TX. Guadalupe County, TX. Kendall County, TX. Medina County, TX. Wilson County, TX. San Diego-Carlsbad-San Marcos, CA ................................................................................................................................... San Diego County, CA. Sandusky, OH ........................................................................................................................................................................ Erie County, OH. San Francisco-San Mateo-Redwood City, CA ...................................................................................................................... Marin County, CA. San Francisco County, CA. San Mateo County, CA. ´ San German-Cabo Rojo, PR ................................................................................................................................................. Cabo Rojo Municipio, PR. Lajas Municipio, PR. Sabana Grande Municipio, PR. ´ San German Municipio, PR. San Jose-Sunnyvale-Santa Clara, CA .................................................................................................................................. San Benito County, CA. Santa Clara County, CA. San Juan-Caguas-Guaynabo, PR ......................................................................................................................................... Aguas Buenas Municipio, PR. Aibonito Municipio, PR. Arecibo Municipio, PR. Barceloneta Municipio, PR. 41140 ....... 41180 ....... 41420 ....... 41500 ....... 41540 ....... 41620 ....... 41660 ....... 41700 ....... 41740 ....... 41780 ....... 41884 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 41900 ....... 41940 ....... 41980 ....... VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM Wage index 08MYP3 0.9265 1.0118 0.9005 1.0438 1.4337 0.8953 0.9402 0.8362 0.8844 1.1354 0.9302 1.5165 0.4885 1.5543 0.4452 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26275 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 42020 ....... 42044 ....... 42060 ....... 42100 ....... 42140 ....... 42220 ....... 42260 ....... 42340 ....... 42540 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 42644 ....... 42680 ....... 43100 ....... 43300 ....... 43340 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Barranquitas Municipio, PR. ´ Bayamon Municipio, PR. Caguas Municipio, PR. Camuy Municipio, PR. ´ Canovanas Municipio, PR. Carolina Municipio, PR. ˜ Catano Municipio, PR. Cayey Municipio, PR. Ciales Municipio, PR. Cidra Municipio, PR. ´ Comerıo Municipio, PR. Corozal Municipio, PR. Dorado Municipio, PR. Florida Municipio, PR. Guaynabo Municipio, PR. Gurabo Municipio, PR. Hatillo Municipio, PR. Humacao Municipio, PR. Juncos Municipio, PR. Las Piedras Municipio, PR. ´ Loıza Municipio, PR. ´ Manatı Municipio, PR. Maunabo Municipio, PR. Morovis Municipio, PR. Naguabo Municipio, PR. Naranjito Municipio, PR. Orocovis Municipio, PR. Quebradillas Municipio, PR. ´ Rıo Grande Municipio, PR. San Juan Municipio, PR. San Lorenzo Municipio, PR. Toa Alta Municipio, PR. Toa Baja Municipio, PR. Trujillo Alto Municipio, PR. Vega Alta Municipio, PR. Vega Baja Municipio, PR. Yabucoa Municipio, PR. San Luis Obispo-Paso Robles, CA ....................................................................................................................................... San Luis Obispo County, CA. Santa Ana-Anaheim-Irvine, CA ............................................................................................................................................. Orange County, CA. Santa Barbara-Santa Maria-Goleta, CA ................................................................................................................................ Santa Barbara County, CA. Santa Cruz-Watsonville, CA .................................................................................................................................................. Santa Cruz County, CA. Santa Fe, NM ........................................................................................................................................................................ Santa Fe County, NM. Santa Rosa-Petaluma, CA .................................................................................................................................................... Sonoma County, CA. Sarasota-Bradenton-Venice, FL ............................................................................................................................................ Manatee County, FL. Sarasota County, FL. Savannah, GA ....................................................................................................................................................................... Bryan County, GA. Chatham County, GA. Effingham County, GA. Scranton—Wilkes-Barre, PA ................................................................................................................................................. Lackawanna County, PA. Luzerne County, PA. Wyoming County, PA. Seattle-Bellevue-Everett, WA ................................................................................................................................................ King County, WA. Snohomish County, WA. Sebastian-Vero Beach, FL .................................................................................................................................................... Indian River County, FL. Sheboygan, WI ...................................................................................................................................................................... Sheboygan County, WI. Sherman-Denison, TX ........................................................................................................................................................... Grayson County, TX. Shreveport-Bossier City, LA .................................................................................................................................................. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 1.1598 1.1473 1.1091 1.5457 1.0824 1.4464 0.9868 0.9351 0.8347 1.1434 0.9573 0.9026 0.8502 0.8865 26276 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 43580 ....... 43620 ....... 43780 ....... 43900 ....... 44060 ....... 44100 ....... 44140 ....... 44180 ....... 44220 ....... 44300 ....... 44700 ....... 44940 ....... 45060 ....... 45104 ....... 45220 ....... 45300 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 45460 ....... 45500 ....... 45780 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) Bossier Parish, LA. Caddo Parish, LA. De Soto Parish, LA. Sioux City, IA-NE-SD ............................................................................................................................................................. Woodbury County, IA. Dakota County, NE. Dixon County, NE. Union County, SD. Sioux Falls, SD ...................................................................................................................................................................... Lincoln County, SD. McCook County, SD. Minnehaha County, SD. Turner County, SD. South Bend-Mishawaka, IN-MI .............................................................................................................................................. St. Joseph County, IN. Cass County, MI. Spartanburg, SC .................................................................................................................................................................... Spartanburg County, SC. Spokane, WA ......................................................................................................................................................................... Spokane County, WA. Springfield, IL ......................................................................................................................................................................... Menard County, IL. Sangamon County, IL. Springfield, MA ...................................................................................................................................................................... Franklin County, MA. Hampden County, MA. Hampshire County, MA. Springfield, MO ...................................................................................................................................................................... Christian County, MO. Dallas County, MO. Greene County, MO. Polk County, MO. Webster County, MO. Springfield, OH ...................................................................................................................................................................... Clark County, OH. State College, PA .................................................................................................................................................................. Centre County, PA. Stockton, CA .......................................................................................................................................................................... San Joaquin County, CA. Sumter, SC ............................................................................................................................................................................ Sumter County, SC. Syracuse, NY ......................................................................................................................................................................... Madison County, NY. Onondaga County, NY. Oswego County, NY. Tacoma, WA .......................................................................................................................................................................... Pierce County, WA. Tallahassee, FL ..................................................................................................................................................................... Gadsden County, FL. Jefferson County, FL. Leon County, FL. Wakulla County, FL. Tampa-St. Petersburg-Clearwater, FL .................................................................................................................................. Hernando County, FL. Hillsborough County, FL. Pasco County, FL. Pinellas County, FL. Terre Haute, IN ...................................................................................................................................................................... Clay County, IN. Sullivan County, IN. Vermillion County, IN. Vigo County, IN. Texarkana, TX-Texarkana, AR .............................................................................................................................................. Miller County, AR. Bowie County, TX. Toledo, OH ............................................................................................................................................................................ Fulton County, OH. Lucas County, OH. Ottawa County, OH. Wood County, OH. 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.9200 0.9559 0.9842 0.9174 1.0447 0.8890 1.0079 0.8469 0.8593 0.8784 1.1442 0.8083 0.9691 1.0789 0.8942 0.9144 0.8765 0.8104 0.9586 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26277 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code Urban area (constituent counties) 45820 ....... Topeka, KS ............................................................................................................................................................................ Jackson County, KS. Jefferson County, KS. Osage County, KS. Shawnee County, KS. Wabaunsee County, KS. Trenton-Ewing, NJ ................................................................................................................................................................. Mercer County, NJ. Tucson, AZ ............................................................................................................................................................................ Pima County, AZ. Tulsa, OK ............................................................................................................................................................................... Creek County, OK. Okmulgee County, OK. Osage County, OK. Pawnee County, OK. Rogers County, OK. Tulsa County, OK. Wagoner County, OK. Tuscaloosa, AL ...................................................................................................................................................................... Greene County, AL. Hale County, AL. Tuscaloosa County, AL. Tyler, TX ................................................................................................................................................................................ Smith County, TX. Utica-Rome, NY ..................................................................................................................................................................... Herkimer County, NY. Oneida County, NY. Valdosta, GA .......................................................................................................................................................................... Brooks County, GA. Echols County, GA. Lanier County, GA. Lowndes County, GA. Vallejo-Fairfield, CA ............................................................................................................................................................... Solano County, CA. Victoria, TX ............................................................................................................................................................................ Calhoun County, TX. Goliad County, TX. Victoria County, TX. Vineland-Millville-Bridgeton, NJ ............................................................................................................................................. Cumberland County, NJ. Virginia Beach-Norfolk-Newport News, VA-NC ..................................................................................................................... Currituck County, NC. Gloucester County, VA. Isle of Wight County, VA. James City County, VA. Mathews County, VA. Surry County, VA. York County, VA. Chesapeake City, VA. Hampton City, VA. Newport News City, VA. Norfolk City, VA. Poquoson City, VA. Portsmouth City, VA. Suffolk City, VA. Virginia Beach City, VA. Williamsburg City, VA. Visalia-Porterville, CA ............................................................................................................................................................ Tulare County, CA. Waco, TX ............................................................................................................................................................................... McLennan County, TX. Warner Robins, GA ............................................................................................................................................................... Houston County, GA. Warren-Troy-Farmington Hills, MI ......................................................................................................................................... Lapeer County, MI. Livingston County, MI. Macomb County, MI. Oakland County, MI. St. Clair County, MI. Washington-Arlington-Alexandria, DC-VA-MD-WV ............................................................................................................... 45940 ....... 46060 ....... 46140 ....... 46220 ....... 46340 ....... 46540 ....... 46660 ....... 46700 ....... 47020 ....... 47220 ....... 47260 ....... 47300 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 47380 ....... 47580 ....... 47644 ....... 47894 ....... VerDate Aug<31>2005 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM Wage index 08MYP3 0.8730 1.0835 0.9202 0.8103 0.8542 0.8811 0.8396 0.8369 1.5137 0.8560 0.9832 0.8790 0.9968 0.8633 0.8380 1.0054 1.1054 26278 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 47940 ....... 48140 ....... 48260 ....... 48300 ....... 48424 ....... 48540 ....... 48620 ....... 48660 ....... 48700 ....... 48864 ....... 48900 ....... cprice-sewell on PROD1PC64 with PROPOSALS3 49020 ....... 49180 ....... 49340 ....... 49420 ....... VerDate Aug<31>2005 Wage index Urban area (constituent counties) District of Columbia, DC. Calvert County, MD. Charles County, MD. Prince George’s County, MD. Arlington County, VA. Clarke County, VA. Fairfax County, VA. Fauquier County, VA. Loudoun County, VA. Prince William County, VA. Spotsylvania County, VA. Stafford County, VA. Warren County, VA. Alexandria City, VA. Fairfax City, VA. Falls Church City, VA. Fredericksburg City, VA. Manassas City, VA. Manassas Park City, VA. Jefferson County, WV. Waterloo-Cedar Falls, IA ....................................................................................................................................................... Black Hawk County, IA. Bremer County, IA. Grundy County, IA. Wausau, WI ........................................................................................................................................................................... Marathon County, WI. Weirton-Steubenville, WV-OH ............................................................................................................................................... Jefferson County, OH. Brooke County, WV. Hancock County, WV. Wenatchee, WA ..................................................................................................................................................................... Chelan County, WA. Douglas County, WA. West Palm Beach-Boca Raton-Boynton Beach, FL .............................................................................................................. Palm Beach County, FL. Wheeling, WV-OH ................................................................................................................................................................. Belmont County, OH. Marshall County, WV. Ohio County, WV. Wichita, KS ............................................................................................................................................................................ Butler County, KS. Harvey County, KS. Sedgwick County, KS. Sumner County, KS. Wichita Falls, TX .................................................................................................................................................................... Archer County, TX. Clay County, TX. Wichita County, TX. Williamsport, PA .................................................................................................................................................................... Lycoming County, PA. Wilmington, DE-MD-NJ .......................................................................................................................................................... New Castle County, DE. Cecil County, MD. Salem County, NJ. Wilmington, NC ...................................................................................................................................................................... Brunswick County, NC. New Hanover County, NC. Pender County, NC. Winchester, VA-WV ............................................................................................................................................................... Frederick County, VA. Winchester City, VA. Hampshire County, WV. Winston-Salem, NC ............................................................................................................................................................... Davie County, NC. Forsyth County, NC. Stokes County, NC. Yadkin County, NC. Worcester, MA ....................................................................................................................................................................... Worcester County, MA. Yakima, WA ........................................................................................................................................................................... 16:07 May 07, 2007 Jkt 211001 PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 E:\FR\FM\08MYP3.SGM 08MYP3 0.8408 0.9722 0.8063 1.0346 0.9649 0.7010 0.9063 0.8311 0.8139 1.0684 0.9835 1.0091 0.9276 1.0722 0.9847 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26279 TABLE 1.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued CBSA code 49500 ....... 49620 ....... 49660 ....... 49700 ....... 49740 ....... Wage index Urban area (constituent counties) Yakima County, WA. Yauco, PR .............................................................................................................................................................................. ´ Guanica Municipio, PR. Guayanilla Municipio, PR. ˜ Penuelas Municipio, PR. Yauco Municipio, PR. York-Hanover, PA .................................................................................................................................................................. York County, PA. Youngstown-Warren-Boardman, OH-PA ............................................................................................................................... Mahoning County, OH. Trumbull County, OH. Mercer County, PA. Yuba City, CA ........................................................................................................................................................................ Sutter County, CA. Yuba County, CA. Yuma, AZ ............................................................................................................................................................................... Yuma County, AZ. 0.3854 0.9397 0.8802 1.0730 0.9109 1 At this time, there are no hospitals located in this CBSA-based urban area on which to base a wage index. Therefore, the wage index value is based on the methodology described in the August 15, 2005 final rule (70 FR 47880). The wage index value for this area is the average wage index for all urban areas within the state. TABLE 2.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR RURAL AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008 CBSA code cprice-sewell on PROD1PC64 with PROPOSALS3 01 02 03 04 05 06 07 08 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. VerDate Aug<31>2005 Wage index Nonurban area Alabama .................. Alaska ..................... Arizona .................... Arkansas ................. California ................. Colorado ................. Connecticut ............. Delaware ................. Florida ..................... Georgia ................... Hawaii ..................... Idaho ....................... Illinois ...................... Indiana .................... Iowa ........................ Kansas .................... Kentucky ................. Louisiana ................ Maine ...................... Maryland ................. Massachusetts 2 ...... Michigan ................. Minnesota ............... Mississippi .............. Missouri .................. 16:07 May 07, 2007 TABLE 2.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR RURAL AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued 0.7591 1.0661 0.8908 0.7307 1.1454 0.9325 1.1709 0.9705 0.8594 0.7593 1.0448 0.8120 0.8320 0.8538 0.8681 0.7998 0.7768 0.7438 0.8443 0.8926 1.1661 0.9062 0.9153 0.7738 0.7927 Jkt 211001 CBSA code 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 PO 00000 ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. Nonurban area Wage index Montana .................. Nebraska ................ Nevada ................... New Hampshire ...... New Jersey 1 ........... New Mexico ............ New York ................ North Carolina ........ North Dakota .......... Ohio ........................ Oklahoma ............... Oregon .................... Pennsylvania .......... Puerto Rico 3 ........... Rhode Island 1 ........ South Carolina ........ South Dakota .......... Tennessee .............. Texas ...................... Utah ........................ Vermont .................. Virgin Islands .......... Virginia .................... Washington ............. 0.8590 0.8677 0.8944 1.0853 ................ 0.8332 0.8232 0.8588 0.7215 0.8658 0.7629 0.9753 0.8320 0.4047 ................ 0.8566 0.8480 0.7827 0.7965 0.8140 0.9744 0.8467 0.7940 1.0263 TABLE 2.—PROPOSED INPATIENT REHABILITATION FACILITY WAGE INDEX FOR RURAL AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2007 THROUGH SEPTEMBER 30, 2008—Continued Frm 00051 Fmt 4701 Sfmt 4702 CBSA code 51 52 53 65 ............. ............. ............. ............. Nonurban area West Virginia .......... Wisconsin ............... Wyoming ................. Guam ...................... Wage index 0.7607 0.9553 0.9295 0.9611 1 All counties within the State are classified as urban. 2 Massachusetts has areas designated as rural; however, no short-term, acute care hospitals are located in the area(s) for FY 2008. As discussed in the preamble in Section IV.B, we are proposing to impute a wage index value for rural Massachusettes based on the average wage index from all contiguous CBSAs. 3 Puerto Rico has areas designated as rural; however, no short-term, acute care hospitals are located in the area(s) for FY 2008. As discussed in the preamble in Section IV.B, we are proposing to continue to use the most recent wage index previously available for Puerto Rico as discussed in the FY 2006 IRF PPS final rule (70 FR 47880). [FR Doc. 07–2241 Filed 5–2–07; 8:45 am] BILLING CODE 4120–01–P E:\FR\FM\08MYP3.SGM 08MYP3

Agencies

[Federal Register Volume 72, Number 88 (Tuesday, May 8, 2007)]
[Proposed Rules]
[Pages 26230-26279]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-2241]



[[Page 26229]]

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Part III





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Part 412



Medicare Program; Inpatient Rehabilitation Facility Prospective Payment 
System for Federal Fiscal Year 2008; Proposed Rule

Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed 
Rules

[[Page 26230]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1551-P]
RIN 0938-AO63


Medicare Program; Inpatient Rehabilitation Facility Prospective 
Payment System for Federal Fiscal Year 2008

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the prospective payment rates 
for inpatient rehabilitation facilities (IRFs) for Federal fiscal year 
(FY) 2008 (for discharges occurring on or after October 1, 2007 and on 
or before September 30, 2008) as required under section 1886(j)(3)(C) 
of the Social Security Act (the Act). Section 1886(j)(5) of the Act 
requires the Secretary to publish in the Federal Register on or before 
the August 1 that precedes the start of each fiscal year, the 
classification and weighting factors for the IRF prospective payment 
system's (PPS) case-mix groups and a description of the methodology and 
data used in computing the prospective payment rates for that fiscal 
year.
    We are proposing to revise existing policies regarding the PPS 
within the authority granted under section 1886(j) of the Act.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on July 2, 2007.

ADDRESSES: In commenting, please refer to file code CMS-1551-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (Fax) transmission.
    You may submit comments in one of four ways (no duplicates, 
please):
    1. Electronically. You may submit electronic comments on specific 
issues in this regulation to https://www.cms.hhs.gov/eRulemaking. Click 
on the link ``Submit electronic comments on CMS regulations with an 
open comment period.'' (Attachments should be in Microsoft Word, 
WordPerfect, or Excel; however, we prefer Microsoft Word.)
    2. By regular mail. You may mail written comments (one original and 
two copies) to the following address only: Centers for Medicare & 
Medicaid Services, Department of Health and Human Services, Attention: 
CMS-1551-P, P.O. Box 8012, Baltimore, MD 21244-8012. Please allow 
sufficient time for mailed comments to be received before the close of 
the comment period.
    3. By express or overnight mail. You may send written comments (one 
original and two copies) to the following address only: Centers for 
Medicare & Medicaid Services, Department of Health and Human Services, 
Attention: CMS-1551-P, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-8012.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments (one original and two copies) before the 
close of the comment period to one of the following addresses. If you 
intend to deliver your comments to the Baltimore address, please call 
telephone number (410) 786-7195 in advance to schedule your arrival 
with one of our staff members.
    Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, 
SW., Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD 
21244-1850. (Because access to the interior of the HHH Building is not 
readily available to persons without Federal Government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for persons wishing to retain a proof of filing by stamping 
in and retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Pete Diaz, (410) 786-1235, for 
information regarding the 75 percent rule. Susanne Seagrave, (410) 786-
0044, for information regarding the payment policies. Zinnia Ng, (410) 
786-4587, for information regarding the wage index and prospective 
payment rate calculation.

SUPPLEMENTARY INFORMATION: Submitting Comments: We welcome comments 
from the public on all issues set forth in this rule to assist us in 
fully considering issues and developing policies. You can assist us by 
referencing the file code CMS-1551-P and the specific ``issue 
identifier'' that precedes the section on which you choose to comment.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: https://
www.cms.hhs.gov/eRulemaking. Click on the link ``Electronic Comments on 
CMS Regulations'' on that Web site to view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

Table of Contents

I. Background
    A. Historical Overview of the Inpatient Rehabilitation Facility 
Prospective Payment System (IRF PPS) for Fiscal Years (FYs) 2002 
through 2007
    B. Requirements for Updating the IRF PPS Rates
    C. Operational Overview of the Current IRF PPS
    D. Brief Summary of Proposed Revisions to the IRF PPS for FY 
2008
II. 75 Percent Rule Policy
III. Classification System for the Inpatient Rehabilitation Facility 
Prospective Payment System
IV. Proposed FY 2008 IRF PPS Federal Prospective Payment Rates
    A. Proposed FY 2008 IRF Market Basket Increase Factor and Labor-
Related Share
    B. Proposed Area Wage Adjustment
    C. Description of the Proposed IRF Standard Payment Conversion 
Factor and Proposed Payment Rates for FY 2008
    D. Example of the Methodology for Adjusting the Proposed Federal 
Prospective Payment Rates
V. Update to Payments for High-Cost Outliers Under the IRF PPS
    A. Proposed Update to the Outlier Threshold Amount for FY 2008
    B. Update to the IRF Cost-to-Charge Ratio Ceilings
VI. Clarification to the Regulations Text for Special Payment 
Provisions for Patients That Are Transferred
VII. Provisions of a Proposed Regulation
VIII. Collection of Information Requirement
IX. Response to Public Comments
X. Regulatory Impact Analysis
    A. Overall Impact
    B. Anticipated Effects of the Proposed Rule
    C. Anticipated Effects of the 75 Percent Rule Policy
    D. Alternatives Considered
    E. Accounting Statement
    F. Conclusion
Regulation Text
Addendum

[[Page 26231]]

Acronyms

    Because of the many terms to which we refer by acronym in this 
proposed rule, we are listing the acronyms used and their 
corresponding terms in alphabetical order below.

ASCA--Administrative Simplification Compliance Act of 2002, Pub. L. 
107-105
BBA--Balanced Budget Act of 1997, Pub. L. 105-33
BBRA--Medicare, Medicaid, and SCHIP [State Children's Health 
Insurance Program] Balanced Budget Refinement Act of 1999, Pub. L. 
106-113
BIPA--Medicare, Medicaid, and SCHIP [State Children's Health 
Insurance Program] Benefits Improvement and Protection Act of 2000, 
Pub. L. 106-554
CBSA--Core-Based Statistical Area
CCR--Cost-to-Charge Ratio
CFR--Code of Federal Regulations
CMG--Case-Mix Group
DRA--Deficit Reduction Act of 2005, Pub. L. 109-171
DSH--Disproportionate Share Hospital
ECI--Employment Cost Indexes
FI--Fiscal Intermediary
FR--Federal Register
FY--Federal Fiscal Year
GDP--Gross Domestic Product
HHH--Hubert H. Humphrey Building
HIPAA--Health Insurance Portability and Accountability Act, Pub. L. 
104-191
IFMC--Iowa Foundation for Medical Care
IPPS--Inpatient Prospective Payment System
IRF--Inpatient Rehabilitation Facility
IRF-PAI--Inpatient Rehabilitation Facility-Patient Assessment 
Instrument
IRF PPS--Inpatient Rehabilitation Facility Prospective Payment 
System
IRVEN--Inpatient Rehabilitation Validation and Entry
LIP--Low-Income Percentage
MEDPAR--Medicare Provider Analysis and Review
MMA--Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (Pub. L. 108-173)
MSA--Metropolitan Statistical Area
NAICS--North American Industrial Classification System
OMB--Office of Management and Budget
PAI--Patient Assessment Instrument
PPS--Prospective Payment System
RAND--RAND Corporation
RFA--Regulatory Flexibility Act, Pub. L. 96-354
RIA--Regulation Impact Analysis
RIC--Rehabilitation Impairment Category
RPL--Rehabilitation, Psychiatric, and Long-Term Care Hospital Market 
Basket
SCHIP--State Children's Health Insurance Program
SIC--Standard Industrial Code
TEFRA--Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-
248

I. Background

    [If you choose to comment on issues in this section, please include 
the caption ``Background'' at the beginning of your comments.]

A. Historical Overview of the Inpatient Rehabilitation Facility 
Prospective Payment System (IRF PPS) for Fiscal Years (FYs) 2002 
through 2007

    Section 4421 of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-
33), as amended by section 125 of the Medicare, Medicaid, and SCHIP 
[State Children's Health Insurance Program] Balanced Budget Refinement 
Act of 1999 (BBRA, Pub. L. 106-113), and by section 305 of the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act 
of 2000 (BIPA, Pub. L. 106-554), provides for the implementation of a 
per discharge prospective payment system (PPS), through section 1886(j) 
of the Social Security Act (the Act), for inpatient rehabilitation 
hospitals and inpatient rehabilitation units of a hospital (hereinafter 
referred to as IRFs).
    Payments under the IRF PPS encompass inpatient operating and 
capital costs of furnishing covered rehabilitation services (that is, 
routine, ancillary, and capital costs) but not costs of approved 
educational activities, bad debts, and other services or items outside 
the scope of the IRF PPS. Although a complete discussion of the IRF PPS 
provisions appears in the August 7, 2001 final rule (66 FR 41316) as 
revised in the FY 2006 IRF PPS final rule (70 FR 47880), we are 
providing below a general description of the IRF PPS for fiscal years 
(FYs) 2002 through 2005.
    Under the IRF PPS from FY 2002 through FY 2005, as described in the 
August 7, 2001 final rule, the Federal prospective payment rates were 
computed across 100 distinct case-mix groups (CMGs). We constructed 95 
CMGs using rehabilitation impairment categories (RICs), functional 
status (both motor and cognitive), and age (in some cases, cognitive 
status and age may not be a factor in defining a CMG). In addition, we 
constructed five special CMGs to account for very short stays and for 
patients who expire in the IRF.
    For each of the CMGs, we developed relative weighting factors to 
account for a patient's clinical characteristics and expected resource 
needs. Thus, the weighting factors accounted for the relative 
difference in resource use across all CMGs. Within each CMG, we created 
tiers based on the estimated effects that certain comorbidities would 
have on resource use.
    We established the Federal PPS rates using a standardized payment 
conversion factor (formerly referred to as the budget neutral 
conversion factor). For a detailed discussion of the budget neutral 
conversion factor, please refer to our August 1, 2003 final rule (68 FR 
45674, 45684 through 45685). In the FY 2006 IRF PPS final rule (70 FR 
47880), we discussed in detail the methodology for determining the 
standard payment conversion factor.
    We applied the relative weighting factors to the standard payment 
conversion factor to compute the unadjusted Federal prospective payment 
rates. Under the IRF PPS from FYs 2002 through 2005, we then applied 
adjustments for geographic variations in wages (wage index), the 
percentage of low-income patients, and location in a rural area (if 
applicable) to the IRF's unadjusted Federal prospective payment rates. 
In addition, we made adjustments to account for short-stay transfer 
cases, interrupted stays, and high cost outliers.
    For cost reporting periods that began on or after January 1, 2002 
and before October 1, 2002, we determined the final prospective payment 
amounts using the transition methodology prescribed in section 
1886(j)(1) of the Act. Under this provision, IRFs transitioning into 
the PPS were paid a blend of the Federal IRF PPS rate and the payment 
that the IRF would have received had the IRF PPS not been implemented. 
This provision also allowed IRFs to elect to bypass this blended 
payment and immediately be paid 100 percent of the Federal IRF PPS 
rate. The transition methodology expired as of cost reporting periods 
beginning on or after October 1, 2002 (FY 2003), and payments for all 
IRFs now consist of 100 percent of the Federal IRF PPS rate.
    We established a CMS Web site as a primary information resource for 
the IRF PPS. The Web site URL is https://www.cms.hhs.gov/
InpatientRehabFacPPS/ and may be accessed to download or view 
publications, software, data specifications, educational materials, and 
other information pertinent to the IRF PPS.
    Section 1886(j) of the Act confers broad statutory authority to 
propose refinements to the IRF PPS. We finalized the refinements 
described in this section in the FY 2006 IRF PPS final rule (70 FR 
47880). The provisions of the FY 2006 IRF PPS final rule became 
effective for discharges beginning on or after October 1, 2005. We 
published correcting amendments to the FY 2006 IRF PPS final rule in 
the Federal Register on September 30, 2005 (70 FR 57166). Any reference 
to the FY 2006 IRF PPS final rule in this proposed rule also includes 
the provisions effective in the correcting amendments.

[[Page 26232]]

    In the FY 2006 final rule (70 FR 47880 and 70 FR 57166), we 
finalized a number of refinements to the IRF PPS case-mix 
classification system (the CMGs and the corresponding relative weights) 
and the case-level and facility-level adjustments. These refinements 
were based on analyses by the RAND Corporation (RAND), a non-partisan 
economic and social policy research group, using calendar year 2002 and 
FY 2003 data. These were the first significant refinements to the IRF 
PPS since its implementation. In conducting the analysis, RAND used 
claims and clinical data for services furnished after the IRF PPS 
implementation. These newer data sets were more complete, and reflected 
improved coding of comorbidities and patient severity by IRFs. The 
researchers were able to use new data sources for imputing missing 
values and more advanced statistical approaches to complete their 
analyses. The RAND reports supporting the refinements made to the IRF 
PPS are available on the CMS Web site at: https://www.cms.hhs.gov/
InpatientRehabFacPPS/09_Research.asp.
    The final key policy changes, effective for discharges occurring on 
or after October 1, 2005, are discussed in detail in the FY 2006 IRF 
PPS final rule (70 FR 47880 and 70 FR 57166). The following is a brief 
summary of the key policy changes:
     Adopted the Office of Management and Budget's (OMB's) 
Core-Based Statistical Area (CBSA) market area definitions in a budget 
neutral manner.
     Implemented a budget-neutral three-year hold harmless 
policy for IRFs that had been classified as rural in FY 2005, but 
became urban in FY 2006.
     Implemented a payment adjustment to account for changes in 
coding that did not reflect real changes in case mix. We reduced the 
standard payment amount by 1.9 percent to account for such changes in 
coding following implementation of the IRF PPS.
     Modified the CMGs, tier comorbidities, and relative 
weights in a budget-neutral manner. The five special CMGs remained the 
same as they had been before FY 2006 and continued to account for very 
short stays and for patients who expire in the IRF.
     Implemented a teaching status adjustment in a budget 
neutral manner for IRFs, similar to the one adopted for inpatient 
psychiatric facilities.
     Revised and rebased the market basket and labor-related 
share to reflect the operating and capital cost structures for 
rehabilitation, psychiatric, and long-term care (RPL) hospitals to 
update IRF payment rates.
     Updated the rural adjustment from 19.14 percent to 21.3 
percent in a budget neutral manner.
     Updated the low-income percentage (LIP) adjustment from an 
exponent of 0.484 to an exponent of 0.6229 in a budget neutral manner.
     Updated the outlier threshold amount from $11,211 to 
$5,129.
    As noted above, a detailed discussion of the final key policy 
changes for FY 2006 appears in the FY 2006 IRF PPS final rule (70 FR 
47880 and 70 FR 57166).
    In the FY 2007 final rule (71 FR 48354) we made the following 
revisions and updates:
     Updated the relative weight and average length of stay 
tables based on re-analysis of the data by CMS and our contractor, the 
RAND Corporation.
     Reduced the standard payment amount by 2.6 percent to 
account more fully for coding changes that do not reflect real changes 
in case mix.
     Updated the IRF PPS payment rates by the FY 2007 estimates 
of the market basket and the labor-related share.
     Updated the IRF PPS payment rates by the FY 2007 wage 
indexes.
     Applied the second year of the hold harmless policy in a 
budget neutral manner.
     Updated the outlier threshold from $5,129 to $5,534.
     Updated the urban and rural national cost-to-charge ratio 
ceilings for the purposes of determining outlier payments under the IRF 
PPS and clarified the methodology described in the regulations text.
     Revised the regulation text in Sec.  412.23(b)(2)(i) and 
Sec.  412.23(b)(2)(ii) to reflect the statutory changes in section 5005 
of the Deficit Reduction Act of 2005 (DRA, Pub. L. 109-171). The 
regulation text change prolongs the overall duration of the phased 
transition to the full 75 percent threshold established in Sec.  
412.23(b)(2)(i) and Sec.  412.23(b)(2)(ii), by extending the 
transition's 60 percent phase for an additional 12 months. In addition 
to the above DRA requirements pertaining to the applicable compliance 
percentage requirements under Sec.  412.23(b)(2), we also permitted a 
comorbidity that meets the criteria as specified in (b)(2)(i) to 
continue to be used before the 75 percent compliance threshold must be 
met.

B. Requirements for Updating the IRF PPS Rates

    On August 7, 2001, we published a final rule titled ``Medicare 
Program; Prospective Payment System for Inpatient Rehabilitation 
Facilities'' in the Federal Register (66 FR 41316) that established a 
PPS for IRFs as authorized under section 1886(j) of the Act and 
codified at subpart P of part 412 of the Medicare regulations. In the 
August 7, 2001 final rule, we set forth the per discharge Federal 
prospective payment rates for FY 2002, which provided payment for 
inpatient operating and capital costs of furnishing covered 
rehabilitation services (that is, routine, ancillary, and capital 
costs) but not costs of approved educational activities, bad debts, and 
other services or items that are outside the scope of the IRF PPS. The 
provisions of the August 7, 2001 final rule were effective for cost 
reporting periods beginning on or after January 1, 2002. On July 1, 
2002, we published a correcting amendment to the August 7, 2001 final 
rule in the Federal Register (67 FR 44073). Any references to the 
August 7, 2001 final rule in this proposed rule include the provisions 
effective in the correcting amendment.
    Section 1886(j)(5) of the Act and Sec.  412.628 of the regulations 
require the Secretary to publish in the Federal Register, on or before 
the August 1 that precedes the start of each new FY, the 
classifications and weighting factors for the IRF CMGs and a 
description of the methodology and data used in computing the 
prospective payment rates for the upcoming FY. On August 1, 2002, we 
published a notice in the Federal Register (67 FR at 49928) to update 
the IRF Federal prospective payment rates from FY 2002 to FY 2003 using 
the methodology as described in Sec.  412.624. As stated in the August 
1, 2002 notice, we used the same classifications and weighting factors 
for the IRF CMGs that were set forth in the August 7, 2001 final rule 
to update the IRF Federal prospective payment rates from FY 2002 to FY 
2003. We continued to update the prospective payment rates in 
accordance with the methodology set forth in the August 7, 2001 final 
rule for each succeeding FY up to and including FY 2005. For FY 2006, 
however, we published a final rule that revised several IRF PPS 
policies (70 FR 47880). The provisions of the FY 2006 IRF PPS final 
rule became effective for discharges occurring on or after October 1, 
2005. We published correcting amendments to the FY 2006 IRF PPS final 
rule in the Federal Register (70 FR 57166). Any reference to the FY 
2006 IRF PPS final rule in this proposed rule includes the provisions 
effective in the correcting amendments.
    In the final rule for FY 2007, we updated the IRF Federal 
prospective payment rates. In addition, we updated the cost-to-charge 
ratio ceilings and the outlier threshold. We implemented a 2.6

[[Page 26233]]

percent reduction to the FY 2007 standard payment amount to account 
more fully for changes in coding practices that do not reflect real 
changes in case mix. We revised the tier comorbidities and the relative 
weights to ensure that IRF PPS payments reflect, as closely as 
possible, the costs of caring for patients in IRFs. The final FY 2007 
Federal prospective payment rates were effective for discharges 
occurring on or after October 1, 2006 and on or before September 30, 
2007.

C. Operational Overview of the Current IRF PPS

    As described in the August 7, 2001 final rule, upon the admission 
and discharge of a Medicare Part A fee-for-service patient, the IRF is 
required to complete the appropriate sections of a patient assessment 
instrument, the Inpatient Rehabilitation Facility-Patient Assessment 
Instrument (IRF-PAI). All required data must be electronically encoded 
into the IRF-PAI software product. Generally, the software product 
includes patient grouping programming called the GROUPER software. The 
GROUPER software uses specific Patient Assessment Instrument (PAI) data 
elements to classify (or group) patients into distinct CMGs and account 
for the existence of any relevant comorbidities.
    The GROUPER software produces a five-digit CMG number. The first 
digit is an alpha-character that indicates the comorbidity tier. The 
last four digits represent the distinct CMG number. (Free downloads of 
the Inpatient Rehabilitation Validation and Entry (IRVEN) software 
product, including the GROUPER software, are available on the CMS Web 
site at https://www.cms.hhs.gov/InpatientRehabFacPPS/06_Software.asp).
    Once a patient is discharged, the IRF completes the Medicare claim 
(UB-92 or its equivalent) using the five-digit CMG number and sends it 
to the appropriate Medicare fiscal intermediary (FI). Claims submitted 
to Medicare must comply with both the Administrative Simplification 
Compliance Act (ASCA, Pub. L. 107-105), and the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA, Pub. L. 104-191). 
Section 3 of the ASCA amends section 1862(a) of the Act by adding 
paragraph (22) which requires the Medicare program, subject to section 
1862(h) of the Act, to deny payment under Part A or Part B for any 
expenses for items or services ``for which a claim is submitted other 
than in an electronic form specified by the Secretary.'' Section 
1862(h) of the Act, in turn, provides that the Secretary shall waive 
such denial in two types of cases and may also waive such denial ``in 
such unusual cases as the Secretary finds appropriate.'' See also the 
final rule on Electronic Submission of Medicare Claims (70 FR 71008, 
November 25, 2005). Section 3 of the ASCA operates in the context of 
the administrative simplification provisions of HIPAA, which include, 
among others, the requirements for transaction standards and code sets 
codified as 45 CFR parts 160 and 162, subparts A and I through R 
(generally known as the Transactions Rule). The Transactions Rule 
requires covered entities, including covered providers, to conduct 
covered electronic transactions according to the applicable transaction 
standards. (See the program claim memoranda issued and published by CMS 
at: https://www.cms.hhs.gov/ElectronicBillingEDITrans/ and listed in the 
addenda to the Medicare Intermediary Manual, Part 3, section 3600. 
Instructions for the limited number of claims submitted to Medicare on 
paper are published by CMS at: https://www.cms.hhs.gov/manuals/
downloads/clm104c25.pdf.
    The Medicare FI processes the claim through its software system. 
This software system includes pricing programming called the PRICER 
software. The PRICER software uses the CMG number, along with other 
specific claim data elements and provider-specific data, to adjust the 
IRF's prospective payment for interrupted stays, transfers, short 
stays, and deaths, and then applies the applicable adjustments to 
account for the IRF's wage index, percentage of low-income patients, 
rural location, and outlier payments. For discharges occurring on or 
after October 1, 2005, the IRF PPS payment also reflects the new 
teaching status adjustment that became effective as of FY 2006, as 
discussed in the FY 2006 IRF PPS final rule (70 FR 47880).

D. Brief Summary of Proposed Revisions to the IRF PPS for FY 2008

    In this proposed rule, we are proposing to make the following 
revisions, updates, and clarifications:
     Update the FY 2008 IRF PPS payment rates by the proposed 
market basket, as discussed in section IV.A.
     Update the FY 2008 IRF PPS payment rates by the proposed 
wage index and the labor related share in a budget neutral manner, as 
discussed in section IV.A and B.
     Update the pre-reclassified and pre-floor wage indexes 
based on the applicable Office of Management and Budget (OMB) bulletins 
that add or delete Core-Based Statistical Areas (CBSAs) numbers and 
title changes, as discussed in section IV.B.
     Implement the final year of the 3-year hold harmless 
policy adopted in the FY 2006 IRF PPS final rule (70 FR 47880, 47923 
through 47926) in a budget neutral manner, as discussed in section 
IV.B.
     Update the outlier threshold amount for FY 2008 to $7,522, 
as discussed in section V.A.
     Update the cost-to-charge ratio ceiling and the national 
average urban and rural cost-to-charge ratios for purposes of 
determining outlier payments under the IRF PPS, as discussed in section 
V.B.
     Clarify the regulations text for the special payment 
provisions for patients that are transferred, as discussed in section 
VI.

II. 75 Percent Rule Policy

    [If you choose to comment on issues in this section, please include 
the caption ``75 Percent Rule Policy'' at the beginning of your 
comments.]
    In order to be excluded from the acute care inpatient hospital PPS 
specified in Sec.  412.1(a)(1) and instead be paid under the IRF PPS, a 
hospital or rehabilitation unit of an acute care hospital must meet the 
requirements for classification as an IRF stipulated in subpart B of 
part 412. As discussed in previous Federal Register publications (68 FR 
26786 (May 16, 2003), 68 FR 53266 (September 9, 2003), 69 FR 25752 (May 
7, 2004), 70 FR 36640 (June 24, 2005), and 71 FR 48354 (August 18, 
2006)), Sec.  412.23(b)(2) specifies one criterion which Medicare uses 
for classifying a hospital or unit of a hospital as an IRF. The 
criterion is that a minimum percentage of a facility's total inpatient 
population must require intensive rehabilitative services for the 
treatment of at least one of 13 medical conditions listed in Sec.  
412.23(b)(2)(iii) in order for the facility to be classified as an IRF. 
In addition, for cost reporting periods beginning on or after July 1, 
2004, and before July 1, 2008, a patient with a comorbidity as defined 
at Sec.  412.602 may be included in the inpatient population that 
counts toward the required applicable percentage if certain 
requirements are met. The minimum percentage is known as the 
``compliance threshold.''
    Prior to the May 7, 2004 final rule (69 FR 25752), Sec.  
412.23(b)(2) stipulated that the compliance threshold was 75 percent. 
Therefore, the compliance threshold was commonly referred to as the 
``75 percent rule.'' In addition, prior to the May 7, 2004 final rule 
the regulation only specified 10 medical conditions. However, in the 
May 7, 2004 final rule we revised Sec.  412.23(b)(2), and

[[Page 26234]]

that revision increased the number of medical conditions to 13, as well 
as temporarily lowered the compliance threshold while at the same time 
specified a transition period at the end of which IRFs would once again 
have to meet a compliance threshold of 75 percent. Also, the revised 
regulation specified that during the compliance threshold transition 
period a patient's comorbidity may be used to determine if a provider 
met the compliance threshold provided certain applicable requirements 
were met.
    In Sec.  412.602 a comorbidity is defined as a specific patient 
condition that is secondary to the patient's principal diagnosis. A 
patient's principal diagnosis is the primary reason for the patient 
being admitted to an IRF, and this diagnosis is used to determine if 
the patient had a medical condition that can be counted towards meeting 
the compliance threshold. As specified in the May 7, 2004 final rule, 
in order for an inpatient with a certain comorbidity to be included in 
the inpatient population that counts toward the applicable percentage 
the following criteria must be met:
     The patient is admitted for inpatient rehabilitation for a 
condition that is not one of the conditions listed in Sec.  
412.23(b)(2)(iii).
     The patient also has a comorbidity that falls in one of 
the conditions listed in Sec.  412.23(b)(2)(iii).
     The comorbidity has caused significant decline in 
functional ability in the individual such that, even in the absence of 
the admitting condition, the individual would require the intensive 
rehabilitation treatment that is unique to inpatient rehabilitation 
facilities paid under the IRF PPS and that cannot be appropriately 
performed in another care setting covered under this Title.
    In accordance with the May 7, 2004 final rule, IRFs would have to 
meet a compliance threshold of 75 percent for cost reporting periods 
starting on or after July 1, 2007. However, Section 5005 of the Deficit 
Reduction Act of 2005 (DRA) (Pub. L. 109-171 modified the applicable 
time periods when the various compliance thresholds, as originally 
specified in the May 7, 2004 final rule, must be met.) The net effect 
of the DRA was extension of the compliance threshold transition period. 
Due to the DRA, the transition period was extended to include cost 
reporting periods starting on or after July 1, 2004, and before July 1, 
2008. Therefore, in order to conform the regulations to the DRA, we 
revised Sec.  412.23(b)(2) and stipulated that an IRF with a cost 
reporting period starting on or after July 1, 2008, instead of July 1, 
2007, must meet the 75 percent compliance threshold. In addition, we 
also permitted a comorbidity that meets the criteria as specified in 
(b)(2)(i) to continue to be used to determine the compliance threshold 
for cost reporting periods beginning before July 1, 2008 instead of 
July 1, 2007. (For a complete description of all the changes made, see 
the FY 2007 IRF PPS final rule (71 FR 48354)).
    For cost reporting periods beginning on or after July 1, 2008, 
comorbidities will not be eligible for inclusion in the calculations 
used to determine if the provider meets the 75 percent compliance 
threshold specified in Sec.  412.23(b)(2)(ii). As the 75 percent rule 
is only partially phased in at this time and there are limitations to 
the policy conclusions that can be drawn from currently available claim 
and patient assessment data, this rule maintains existing policy. 
However, in the May 7, 2004 final rule (69 FR 25762), we encouraged 
research evaluating the continued use of comorbidities in determining 
compliance with the 75 percent rule. Therefore, we are soliciting 
comments supporting current policy or other options, including use of 
some or all of the existing comorbidities in calculating the compliance 
percentage for an additional fixed period of one or more years or to 
integrate the inclusion of some or all of the existing comorbidities on 
a permanent basis. In addition, we are soliciting comments that include 
clinical data based on scientifically sound research that provide 
evidence on these and other options.

III. Classification System for the Inpatient Rehabilitation Facility 
Prospective Payment System

    [If you choose to comment on issues in this section, please include 
the caption ``Classification System for the Inpatient Rehabilitation 
Facility Prospective Payment System'' at the beginning of your 
comments.]
    For the FY 2008 IRF PPS, we will use the same case-mix 
classification system that we used for FY 2007, as set forth in the FY 
2007 IRF PPS final rule (71 FR 48354). Table 1 below, ``Relative 
Weights and Average Lengths of Stay for Case-Mix Groups'', presents the 
CMGs, the comorbidity tiers, the corresponding relative weights, and 
the average length of stay value for each CMG and tier. The average 
length of stay for each CMG is used to determine when an IRF discharge 
meets the definition of a short-stay transfer, which results in a per 
diem case level adjustment. Because these data elements are not 
changing, Table 1 shown below is identical to Table 4 that was 
published in the FY 2007 IRF PPS final rule (71 FR 48354, 48364 through 
48370). The methodology we used to construct the data elements in Table 
1 is described in detail in the FY 2007 IRF PPS final rule (71 FR 
48354).
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IV. Proposed FY 2008 IRF PPS Federal Prospective Payment Rates

    [If you choose to comment on issues in this section, please include 
the caption ``Proposed FY 2008 IRF PPS Federal Prospective Payment 
Rates'' at the beginning of your comments.]

A. Proposed FY 2008 IRF PPS Market Basket Increase Factor and Labor-
Related Share

    Section 1886(j)(3)(C) of the Act requires the Secretary to 
establish an increase factor that reflects changes over

[[Page 26243]]

time in the prices of an appropriate mix of goods and services included 
in the covered IRF services, which is referred to as a market basket 
index. In updating the FY 2008 payment rates outlined in this proposed 
rule, CMS applied an appropriate increase factor to the FY 2007 IRF PPS 
payment rates that is based on the rehabilitation, psychiatric, and 
long-term care hospital (RPL) market basket. In constructing the RPL 
market basket, we used the methodology set forth in the FY 2006 IRF PPS 
final rule (70 FR 47880, 47908 through 47915).
    As discussed in that final rule, the RPL market basket primarily 
uses the Bureau of Labor Statistics' (BLS) data as price proxies, which 
are grouped in one of the three BLS categories: Producer Price Indexes 
(PPI), Consumer Price Indexes (CPI), and Employment Cost Indexes (ECI). 
We evaluated and selected these particular price proxies using the 
criteria of reliability, timeliness, availability, and relevance, and 
believe they continue to be the best measures of price changes for the 
cost categories.
    As discussed in the FY 2007 IRF PPS proposed rule, beginning April 
2006 with the publication of March 2006 data, the BLS'' ECI has used a 
different classification system, the North American Industrial 
Classification System (NAICS), instead of the Standard Industrial Codes 
(SIC). We have consistently used the ECI as the data source for our 
wages and salaries and other price proxies in the RPL market basket and 
did not make any changes. This proposed rule's estimated FY 2008 IRF 
market basket increase factor and labor-related share will be updated 
for the final rule based on the most recent data available from the 
BLS.
    We will use the same methodology described in the FY 2006 IRF PPS 
final rule to compute the FY 2008 IRF market basket increase factor and 
labor-related share. For this proposed rule, the FY 2008 IRF market 
basket increase factor is 3.3 percent. This is based on Global Insight, 
Inc.'s forecast for the first quarter of 2007 (2007q1) with historical 
data through the fourth quarter of 2006 (2006q4). We propose to update 
the market basket with more recent data for the final rule to the 
extent it is available. However, we note that the President's budget 
includes a proposal for a zero percent update in the IRF market basket 
for FY 2008, and that the provisions outlined in this proposed rule 
would need to reflect any legislation that the Congress enacts to adopt 
this proposal.
    In addition, we have used the methodology described in the FY 2006 
IRF PPS final rule to update the labor-related share for FY 2008. In FY 
2004, we updated the 1992 market basket data to 1997 based on the 
methodology described in the August 1, 2003 final rule (68 FR 45688 
through 45689). As discussed in the FY 2006 IRF PPS final rule (70 FR 
47880, 47915 through 47917), we rebased and revised the market basket 
for FY 2006 using the 2002-based cost structures for IRFs, IPFs, and 
LTCHs to determine the FY 2006 labor-related share. For FY 2007, we 
used the same methodology discussed in the FY 2006 IRF PPS final rule 
(70 FR 47880, 47908 through 47917) to determine the FY 2007 IRF labor-
related share. For FY 2008, we continue to use the same methodology 
discussed in the FY 2006 IRF PPS final rule. As shown in Table 2, the 
total FY 2008 RPL labor-related share is 75.846 percent in this 
proposed rule. We propose to update the labor-related share with more 
recent data for the final rule to the extent it is available.

 Table 2.--Proposed FY 2008 IRF Labor-Related Share Relative Importance
------------------------------------------------------------------------
                                                            Proposed FY
                                                          2008 IRF labor-
                      Cost category                           related
                                                             relative
                                                            importance
------------------------------------------------------------------------
Wages and salaries......................................          52.640
Employee benefits.......................................          14.149
Professional fees.......................................           2.907
All other labor intensive services......................           2.147
                                                         ---------------
    Subtotal............................................          71.843
                                                         ---------------
Labor-related share of capital costs....................           4.003
                                                         ---------------
    Total...............................................         75.846
------------------------------------------------------------------------
SOURCE: Global Insight, Inc, 1st Qtr, 2007; @USMACRO/CONTROL0307 @CISSIM/
  TL0207.SIM Historical Data through 4th QTR, 2006

B. Proposed Area Wage Adjustment

    Section 1886(j)(6) of the Act requires the Secretary to adjust the 
proportion (as estimated by the Secretary from time to time) of 
rehabilitation facilities' costs attributable to wages and wage-related 
costs by a factor (established by the Secretary) reflecting the 
relative hospital wage level in the geographic area of the 
rehabilitation facility compared to the national average wage level for 
those facilities. The Secretary is required to update the wage index on 
the basis of information available to the Secretary on the wages and 
wage-related costs to furnish rehabilitation services. Any adjustments 
or updates made under section 1886(j)(6) of the Act for a FY are made 
in a budget neutral manner.
    In the FY 2007 IRF PPS final rule, we maintained the methodology 
described in the FY 2006 IRF PPS final rule to determine the wage 
index, labor market area definitions, and hold harmless policy 
consistent with the rationale outlined in that final rule (70 FR 47880, 
47917 through 47933). In the FY 2006 IRF PPS final rule, we adopted a 
3-year hold harmless policy specifically for rural IRFs whose labor 
market designations changed from rural to urban under the CBSA-based 
labor market area designations. This policy specifically applied to 
IRFs that had been previously designated rural and which, effective for 
discharges on or after October 1, 2005, would otherwise have become 
ineligible for the 19.14 percent rural adjustment. For FY 2008, the 
third and final year of the 3-year phase-out of the budget-neutral hold 
harmless policy, we will no longer apply an adjustment for IRFs that 
meet the criteria described in the FY 2006 final rule (70 FR 47880, 
47923 through 47926).
    For FY 2008, we propose to maintain the policies and methodologies 
described in the FY 2007 IRF PPS final rule relating to the labor 
market area definitions, the wage index methodology for areas with wage 
data, and hold harmless policy consistent with the rationale outlined 
in the FY 2006 IRF PPS final rule (70 FR 47880, 47917 through 47933). 
Therefore, this proposed rule continues to use the Core-Based 
Statistical Area (CBSA) labor market area definitions and the pre-
reclassification and pre-floor hospital wage index based on 2003 cost 
report data. In addition, the budget neutral hold harmless policy 
established in the FY 2006 final rule will expire for discharges 
occurring on or after October 1, 2007.
    In adopting the CBSA geographic designations in FY 2006, we 
provided a one-year transition with a blended wage index for all 
providers. For FY 2006, the wage index for each provider consisted of a 
blend of 50 percent of the FY 2006 MSA-based wage index and 50 percent 
of the FY 2006 CBSA-based wage index (both using FY 2001 hospital 
data). We referred to the blended wage index as the FY 2006 IRF PPS 
transition wage index. As discussed in the FY 2006 IRF PPS final rule 
(70 FR 47880, 47926), subsequent to the expiration of this one-year 
transition on September 30, 2006, we used the full CBSA-based wage 
index values as published in the Addendum of the FY 2007 IRF PPS final 
rule (71 FR 48354) and in the Addendum of this proposed rule.

[[Page 26244]]

    When adopting OMB's new labor market designations, we identified 
some geographic areas where there were no hospitals and, thus, no 
hospital wage index data on which to base the calculation of the IRF 
PPS wage index (70 FR 47880).
    In this proposed rule, we are proposing to revise our methodology 
to determine a proxy for rural areas without hospital wage data. Under 
the CBSA labor market areas, there are no rural hospitals in rural 
Massachusetts and rural Puerto Rico. Because there was no rural proxy 
for more recent rural data within those areas, we used the FY 2006 wage 
index value in both FY 2006 and FY 2007 for rural Massachusetts and 
rural Puerto Rico.
    Due to the use of the same wage index value (from FY 2006) for 
these areas for two fiscal years, we believe it is appropriate at this 
point to consider alternatives in our methodology to update the wage 
index for rural areas without rural hospital wage index data. We 
believe that the best imputed proxy would 1) use pre-floor, pre-
reclassified hospital data, 2) be easy to evaluate, 3) use the most 
local data, and 4) be easily updateable from year-to-year. Since the 
implementation of the IRF PPS, we have used the pre-floor, pre-
reclassified hospital wage data that is easy to evaluate and is 
updateable from year-to-year. In addition, the IRF PPS wage index is 
based on hospitals' cost report data, which reflects local available 
data. Therefore, we believe the imputed proxy for a rural area without 
hospital wage data is consistent with our past methodology and other 
post-acute PPS wage index policy. Although our current methodology uses 
rural pre-floor, pre-reclassified hospital wage data, this method is 
not updateable from year-to-year.
    Therefore, in cases where there is a rural area without rural 
hospital wage data, we propose using the average wage index from all 
contiguous CBSAs to represent a reasonable proxy for the rural area 
within a State. While this approach does not use rural data, it does 
use pre-floor, pre-reclassified hospital wage data, it is easy to 
evaluate, it is updateable from year-to-year, and it uses the most 
local data available.
    In determining an imputed rural wage index, we interpret the term 
``contiguous'' to mean sharing a border. For example, in the case of 
Massachusetts, the entire rural area consists of Dukes and Nantucket 
counties. We have determined that the borders of Dukes and Nantucket 
counties are local and contiguous with Barnstable and Bristol counties. 
Under the proposed methodology, the wage indexes for the counties of 
Barnstable (CBSA 12700: 1.2539) and Bristol (CBSA 39300: 1.0783) are 
averaged, resulting in an imputed rural wage index of 1.1661 for rural 
Massachusetts for FY 2008. While we believe that this policy could be 
readily applied to other rural areas that lack hospital wage data 
(possibly due to hospitals converting to a different provider type, 
such as a CAH, that does not submit the appropriate wage data), we may 
re-examine this policy should a similar situation arise in the future.
    However, we do not believe that this policy is appropriate for 
Puerto Rico. There are sufficient economic differences between 
hospitals in the United States and those in Puerto Rico (including the 
payment of hospitals in Puerto Rico using blended Federal/Commonwealth-
specific rates) that a separate and distinct policy for Puerto Rico is 
necessary. Consequently, any alternative methodology for imputing a 
wage index for rural Puerto Rico would need to take into account these 
economic differences and the payment rates hospitals receive in Puerto 
Rico. Our policy of imputing a rural wage index based on the wage 
index(es) of CBSAs contiguous to the rural area in question does not 
recognize the unique circumstances of Puerto Rico. While we have not 
yet identified an alternative methodology for imputing a wage index for 
rural Puerto Rico, we will continue to evaluate the feasibility of 
using existing hospital wage data and, possibly, wage data from other 
sources. By maintaining our current policy for Puerto Rico, we will 
maintain consistency with other post-acute care PPS wage index 
policies. Accordingly, we propose to continue using the most recent 
wage index previously available for Puerto Rico; that is, a wage index 
of 0.4047. We solicit comments on our proposal to maintain the current 
wage index policy for rural Puerto Rico.
    In the FY 2006 IRF PPS final rule (70 FR 47880, 47920), we notified 
the public that the Office of Management and Budget (OMB) published a 
bulletin that changed the titles to certain CBSAs after the publication 
of our FY 2006 IRF PPS proposed rule (70 FR 30186). Since the 
publication of the FY 2006 IRF PPS final rule, OMB published additional 
bulletins that updated the CBSAs. Specifically, OMB added or deleted 
certain CBSA numbers and revised certain titles. Accordingly, in this 
proposed rule, we are proposing to clarify that this and all subsequent 
IRF PPS rules and notices are considered to incorporate the CBSA 
changes published in the most recent OMB bulletin that applies to the 
hospital wage data used to determine the current IRF PPS wage index. 
The OMB bulletins may be accessed online at https://www.whitehouse.gov/
omb/bulletins/.
    To calculate the wage-adjusted facility payment for the payment 
rates set forth in this proposed rule, we multiply the unadjusted 
Federal prospective payment by the proposed FY 2008 RPL labor-related 
share (75.846 percent) to determine the labor-related portion of the 
Federal prospective payments. We then multiply this labor-related 
portion by the applicable proposed IRF wage index shown in Table 1 for 
urban areas and Table 2 for rural areas in the Addendum.
    Adjustments or updates to the IRF wage index made under section 
1886(j)(6) of the Act must be made in a budget neutral manner; 
therefore, we calculated a budget neutral wage adjustment factor as 
established in the August 1, 2003 final rule and codified at Sec.  
412.624(e)(1), and described in the steps below. We propose to use the 
following steps to ensure that the FY 2008 IRF standard payment 
conversion factor reflects the update to the proposed wage indexes 
(based on the FY 2003 pre-reclassified and pre-floor hospital wage 
data) and the proposed labor-related share in a budget neutral manner:
    Step 1 Determine the total amount of the estimated FY 2007 IRF PPS 
rates, using the FY 2007 standard payment conversion factor and the 
labor-related share and the wage indexes from FY 2007 (as published in 
the FY 2007 IRF PPS final rule).
    Step 2 Calculate the total amount of estimated IRF PPS payments, 
using the FY 2007 standard payment conversion factor and the proposed 
FY 2008 labor-related share and proposed CBSA urban and rural wage 
indexes.
    Step 3 Divide the amount calculated in step 1 by the amount 
calculated in step 2, which equals the FY 2008 budget neutral wage 
adjustment factor of 1.0026.
    Step 4 Apply the FY 2008 budget neutral wage adjustment factor from 
step 3 to the FY 2007 IRF PPS standard payment conversion factor after 
the application of the estimated market basket update to determine the 
FY 2008 standard payment conversion factor.

C. Description of the Proposed IRF Standard Payment Conversion Factor 
and Proposed Payment Rates for FY 2008

    To calculate the proposed standard payment conversion factor for FY 
2008 and as illustrated in Table 3 below, we begin by applying the 
estimated market

[[Page 26245]]

basket increase factor (3.3 percent) to the standard payment conversion 
factor for FY 2007 ($12,981), which equals $13,409. We then apply the 
proposed combined budget neutrality factor for the wage index and labor 
related share and final year of the hold harmless policy of 1.0040 
(1.0026 * 1.0014 = 1.0040), which would result in a proposed standard 
payment conversion factor of $13,463.

    Table 3.--Calculations To Determine the Proposed FY 2008 Standard
                        Payment Conversion Factor
------------------------------------------------------------------------
               Explanation for adjustment                  Calculations
------------------------------------------------------------------------
FY 2007 Standard Payment Conversion Factor..............          12,981
Proposed FY 2008 Market Basket Increase Factor..........         x 1.033
    Subtotal............................................        = 13,409
Proposed Budget Neutrality Factor for the Wage Index,           x 1.0040
 Labor-Related Share, and the Hold Harmless Provision...
Proposed FY 2008 Standard Payment Conversion Factor.....       = $13,463
------------------------------------------------------------------------

    After the application of the relative weights, the resulting 
proposed unadjusted IRF prospective payment rates for FY 2008 are shown 
below in Table 4, ``Proposed FY 2008 Payment Rates.''
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D. Example of the Methodology for Adjusting the Proposed Federal 
Prospective Payment Rates

    Table 5 illustrates the proposed methodology for adjusting the 
Federal prospective payments (as described in sections IV.A through C 
of this proposed rule). The examples below are based on two 
hypothetical Medicare beneficiaries, both classified into CMG 0110 
(without comorbidities). The unadjusted Federal prospective payment 
rate for CMG 0110 (without comorbidities) can be found in Table 4 
above.
    One beneficiary is in Facility A, an IRF located in rural Spencer 
County, Indiana, and another beneficiary is in Facility B, an IRF 
located in urban Harrison County, Indiana. Facility A, a non-teaching 
hospital, has a disproportionate share hospital (DSH) percentage of 5 
percent (which results in a LIP adjustment of 1.0309), a wage index of 
0.8538, and an applicable rural adjustment of 21.3 percent. Facility B, 
a teaching hospital, has a DSH percentage of 15 percent (which results 
in a LIP adjustment of 1.0910), a wage index of 0.9118, and an 
applicable teaching status adjustment of 0.109.
    To calculate each IRF's labor and non-labor portion of the Federal 
prospective payment, we begin by taking the unadjusted Federal 
prospective payment rate for CMG 0110 (without comorbidities) from 
Table 4 above. Then, we multiply the estimated labor-related share 
(75.846) described in section IV.A by the unadjusted Federal 
prospective payment rate. To determine the non-labor portion of the 
Federal prospective payment rate, we subtract the labor portion of the 
Federal payment from the unadjusted Federal prospective payment.
    To compute the wage-adjusted Federal prospective payment, we 
multiply the result of the labor portion of the Federal payment by the 
appropriate wage index found in the Addendum in Tables 1 and 2, which 
will result in the wage-adjusted amount. Next, we compute the wage-
adjusted Federal payment by adding the wage-adjusted amount to the non-
labor portion.
    To adjust the Federal prospective payment by the facility-level 
adjustments, there are several steps. First, we take the wage-adjusted 
Federal prospective payment and multiply it by the appropriate rural 
and LIP adjustments (if applicable). Then, to determine the appropriate 
amount of additional payment for the teaching status adjustment (if 
applicable), we multiply the teaching status adjustment (0.109, in this 
example) by the wage-adjusted and rural-adjusted amount (if 
applicable). Finally, we add the additional teaching status payments 
(if applicable) to the wage, rural, and LIP-adjusted Federal 
prospective payment rate. Table 5 illustrates the components of the 
proposed adjusted payment calculation.
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    Thus, the proposed adjusted payment for Facility A would be 
$32,405.16 and the proposed adjusted payment for Facility B would be 
$32,635.56.

V. Update to Payments for High-Cost Outliers Under the IRF PPS

    [If you choose to comment on issues in this section, please include 
the caption ``High-Cost Outliers Under the IRF PPS'' at the beginning 
of your comments.]

A. Proposed Update to the Outlier Threshold Amount for FY 2008

    Section 1886(j)(4) of the Act provides the Secretary with the 
authority to make payments in addition to the basic IRF prospective 
payments for cases incurring extraordinarily high costs. A case 
qualifies for an outlier payment if the estimated cost of the case 
exceeds the adjusted outlier threshold. We calculate the adjusted 
outlier threshold by adding the IRF PPS payment for the case (that is, 
the CMG payment adjusted by all of the relevant facility-level 
adjustments) and the adjusted threshold amount (also adjusted by all of 
the relevant facility-level adjustments). Then, we calculate the 
estimated cost of a case by multiplying the IRF's overall cost-to-
charge ratio (CCR) by the Medicare allowable covered charge. If the 
estimated cost of the case is higher than the adjusted outlier 
threshold, we make an outlier payment for the case equal to 80 percent 
of the difference between the estimated cost of the case and the 
outlier threshold.
    In the August 7, 2001 final rule (66 FR 41316, 41362 through 
41363), we discussed our rationale for setting the outlier threshold 
amount for the IRF PPS so that estimated outlier payments would equal 3 
percent of total estimated payments. Subsequently, we updated the IRF 
outlier threshold amount in the FYs 2006 and 2007 IRF PPS final rules 
(70 FR 47880 and 71 FR 48354) to maintain estimated outlier payments at 
3 percent of total estimated payments,

[[Page 26250]]

and we also stated that we would continue to analyze the estimated 
outlier payments for subsequent years and adjust the outlier threshold 
amount as appropriate to maintain the 3 percent target.
    For this proposed rule, we performed an updated analysis of FY 2005 
claims and IRF-PAI data using the same methodology we used to set the 
initial outlier threshold amount when we first implemented the IRF PPS 
in the August 7, 2001 final rule (66 FR 41316), which is also the same 
methodology we used to update the outlier threshold amounts for FYs 
2006 and 2007. Using the updated FY 2005 claims and IRF-PAI data, we 
estimate that IRF outlier payments as a percentage of total estimated 
payments for FY 2007 increased from 3 percent using the FY 2004 data to 
approximately 3.8 percent using the updated FY 2005 data. We are still 
investigating the reasons for the change in estimated outlier payments 
between FY 2004 and FY 2005, and will carefully evaluate all possible 
reasons for this change.
    Based on the updated analysis using FY 2005 data, and consistent 
with the broad statutory authority conferred upon the Secretary in 
sections 1886(j)(4)(A)(i) and 1886(j)(4)(A)(ii) of the Act, we propose 
to update the outlier threshold amount to $7,522 to decrease estimated 
outlier payments from approximately 3.8 to 3 percent of total estimated 
aggregate IRF payments for FY 2008.
    The outlier threshold amount for FY 2008 is subject to change in 
the final rule based on analysis of updated data.

B. Update to the IRF Cost-to-Charge Ratio Ceilings

    In accordance with the methodology stated in the August 1, 2003 
final rule (68 FR 45692 through 45694), we apply a ceiling to IRFs' 
cost-to-charge ratios (CCRs). Using the methodology described in that 
final rule, we propose to update the national urban and rural CCRs for 
IRFs. We apply the national urban and rural CCRs in the following 
situations:
     New IRFs that have not yet submitted their first Medicare 
cost report.
     IRFs whose overall CCR is in excess of 3 standard 
deviations above the corresponding national geometric mean, which we 
propose to set at 1.55 (based on the current estimate) for FY 2008.
     Other IRFs for whom accurate data with which to calculate 
an overall CCR are not available.
    Specifically, for FY 2008, we estimate a proposed national CCR of 
0.589 for rural IRFs and 0.475 for urban IRFs. For new facilities, we 
use these national ratios until the data become available for us to 
compute the facility's actual CCR using the first tentative settled or 
final settled cost report data, which we will then use for the 
subsequent cost reporting period. We note that the proposed national 
average rural and urban CCRs and our estimate of 3 standard deviations 
above the corresponding national geometric mean in this section are 
subject to change in the final rule based on updated analysis and data.

C. Adjustment of IRF Outlier Payments

    In the August 1, 2003 final rule (68 FR 45674, 45693 through 
45694), we finalized a proposal to make IRF outlier payments subject to 
reconciliation when IRFs' cost reports are settled, consistent with the 
policy adopted for IPPS hospitals in the June 9, 2003 IPPS final rule 
(68 FR 34494, 34501). The revised methodology provides for retroactive 
adjustments to IRF outlier payments to account for differences between 
the CCRs from the latest settled cost report and the actual CCRs 
computed at the time the cost report that coincides with the date of 
discharge is settled using the cost and charge data from that cost 
report. This revised methodology addresses vulnerabilities found in the 
IPPS and the IRF outlier payment policies, which may have resulted in 
outlier payments that were too high or too low. Along these lines, we 
are analyzing IRF outlier payments from the beginning of the IRF PPS 
through FY 2005, obtained from IRFs' cost report filings, to identify 
specific payment vulnerabilities in the IRF outlier payment policy.
    Under this policy, which is outlined in Sec.  412.624(e)(5), which 
in turn references Sec.  412.84(i) and Sec.  412.84(m) of the IPPS 
regulations, outlier payments will be processed on an interim basis 
throughout the year using IRFs' CCRs based on the best information 
available at the time. When an IRF's cost report is settled, any 
reconciliation of outlier payments by fiscal intermediaries will be 
based on the relationship between an IRF's costs and charges at the 
time a particular discharge actually occurred. This revised methodology 
ensures that the final outlier payments reflect an accurate assessment 
of the actual costs the IRF incurred for treating the case.
    We have not yet issued instructions to the fiscal intermediaries 
regarding IRF outlier reconciliation because we have been analyzing the 
data and assessing the systems changes necessary to conduct the 
reconciliation. Thus, we will soon issue instructions to fiscal 
intermediaries to begin reconciling IRF outlier payments upon 
settlement of IRF cost reports.

VI. Clarification to the Regulation Text for Special Payment Provisions 
for Patients That Are Transferred

    [If you choose to comment on issues in this section, please include 
the caption ``Clarification to the Regulation Text for Special Payment 
Provisions for Patients that are Transferred'' at the beginning of your 
comments.]
    Section 125(a)(3) of the BBRA amended Section 1886(j)(1) of the Act 
by adding a paragraph (E) that states ``Construction relating to 
transfer authority--Nothing in this subsection shall be construed as 
preventing the Secretary from providing for an adjustment to payments 
to take into account the early transfer of a patient from a 
rehabilitation facility to another site of care.'' In the FY 2002 
proposed and final IRF PPS rules, we proposed and a

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