Medicare Program; Changes for Long-Term Care Hospitals Required by Certain Provisions of the Medicare, Medicaid, SCHIP Extension Act of 2007: 3-Year Delay in the Application of Payment Adjustments for Short Stay Outliers and Changes to the Standard Federal Rate, 24871-24881 [08-1217]
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Federal Register / Vol. 73, No. 88 / Tuesday, May 6, 2008 / Rules and Regulations
unnecessary or contrary to the public
interest. This determination must be
supported by a brief statement. 5 U.S.C.
808(2). As stated previously, EPA has
made such a good cause finding,
including the reasons therefore, and
established an effective date of June 5,
2008. EPA will submit a report
containing this rule and other required
information to the U.S. Senate, the U.S.
House of Representatives, and the
Comptroller General of the United
States prior to publication of the rule in
the Federal Register. These corrections
to the General Provisions of 40 CFR part
63 is not a ‘‘major rule’’ as defined by
5 U.S.C. 804(2).
List of Subjects in 40 CFR Parts 60, 61,
62 and 63
Environmental protection, Air
pollution control, Reporting and
recordkeeping requirements.
Dated: April 28, 2008.
Carol Rushin,
Acting Regional Administrator, Region 8.
PART 60—[AMENDED]
Subpart A—General Provisions
1. The authority citation for part 60
continues to read as follows:
I
4. Section 61.04 is amended by
revising the address for Region VIII in
paragraph (a) to read as follows:
I
Authority: 42 U.S.C. 7401 et seq.
§ 61.04
Subpart A—General Provisions
2. Section 60.4 is amended by revising
the address for Region VIII in paragraph
(a) to read as follows:
I
§ 60.4
Address.
(a) * * *
Region VIII (Colorado, Montana,
North Dakota, South Dakota, Utah,
Wyoming) Director, Air and Toxics
Technical Enforcement Program, Office
of Enforcement, Compliance and
Environmental Justice, Mail Code
8ENF–AT, 1595 Wynkoop Street,
Denver, CO 80202–1129.
*
*
*
*
*
PART 62—[AMENDED]
5. The authority citation for part 62
continues to read as follows:
I
Authority: 42 U.S.C. 7401 et seq.
Subpart A—General Provisions
6. In § 62.10 the table is amended by
revising the entry for Region VIII to read
as follows:
PART 61—[AMENDED]
I
3. The authority citation for part 61
continues to read as follows:
§ 62.10
I
40 CFR parts 60, 61, 62, and 63 are
amended as follows:
I
Address.
(a) * * *
Region VIII (Colorado, Montana,
North Dakota, South Dakota, Utah,
Wyoming) Director, Air and Toxics
Technical Enforcement Program, Office
of Enforcement, Compliance and
Environmental Justice, Mail Code
8ENF–AT, 1595 Wynkoop Street,
Denver, CO 80202–1129.
*
*
*
*
*
Authority: 42 U.S.C. 7401 et seq.
*
Region and jurisdiction covered
*
Submission to Administrator.
*
*
*
Address
*
*
*
*
*
*
*
VIII—Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming Director, Air Program, Office of Partnerships and Regulatory Assistance, Mail Code 8P–AR, 1595 Wynkoop Street, Denver, CO 80202–
1129
*
*
*
PART 63—[AMENDED]
*
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
7. The authority citation for part 63
continues to read as follows:
I
Centers for Medicare & Medicaid
Services
Authority: 42 U.S.C. 7401 et seq.
Subpart A—General Provisions
42 CFR Part 412
8. Section 63.13 is amended by
revising the address for Region VIII in
paragraph (a) to read as follows:
[CMS–1493–IFC]
I
RIN 0938–AP33
(a) * * *
EPA Region VIII (Colorado, Montana,
North Dakota, South Dakota, Utah,
Wyoming) Director, Air and Toxics
Technical Enforcement Program, Office
of Enforcement, Compliance and
Environmental Justice, Mail Code
8ENF–AT, 1595 Wynkoop Street,
Denver, CO 80202–1129.
*
*
*
*
*
[FR Doc. E8–9963 Filed 5–5–08; 8:45 am]
BILLING CODE 6560–50–P
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Medicare Program; Changes for LongTerm Care Hospitals Required by
Certain Provisions of the Medicare,
Medicaid, SCHIP Extension Act of
2007: 3-Year Delay in the Application
of Payment Adjustments for Short Stay
Outliers and Changes to the Standard
Federal Rate
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Interim final rule with comment
period.
AGENCY:
SUMMARY: This interim final rule with
comment period implements certain
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*
provisions of section 114 of the
Medicare, Medicaid, and SCHIP
Extension Act of 2007 relating to long
term care hospitals (LTCHs). These
provisions include a 3-year delay in the
application of certain provisions of the
payment adjustment for short-stay
outliers and revisions to the RY 2008
standard Federal rate.
Effective date: The provisions of
§ 412.1 and § 412.500 are effective June
5, 2008. The provisions of
§ 412.529(c)(1) through (c)(3) are
effective on December 29, 2007. In
accordance with section 1871(e)(1)(A)(i)
and (ii) of the Social Security Act (the
Act), the Secretary has determined that
retroactive application of the provisions
of § 412.529(c)(1) through (c)(3) is
necessary to comply with the statute
and that failure to apply the changes
retroactively would be contrary to
public interest. Also, in accordance with
section 1871(e)(1)(A)(ii) of the Act, the
technical corrections to § 412.529(f)
DATES:
§ 63.13 Addresses of State air pollution
control agencies and EPA Regional Offices.
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Federal Register / Vol. 73, No. 88 / Tuesday, May 6, 2008 / Rules and Regulations
(redesignated from § 412.529(c)(4)) are
effective on December 29, 2007. In
accordance with section
1871(e)(1)(A)(ii) of the Act, the
Secretary has determined that failure to
apply the technical corrections in
§ 412.529(f) retroactively would be
contrary to public interest. Additionally,
in accordance with section
1871(e)(1)(A)(i) and (ii) of the Act, the
provisions of § 412.523 are effective
April 1, 2008. Also, in accordance with
section 1871(e)(1)(A)(ii) of the Act, the
fixed loss-amount provision in section
II.D.2. of this preamble which revises
the fixed-loss amount for discharge
occurring on or after April 1, 2008, and
through June 30, 2008, is effective April
1, 2008.
Comment date: To be assured
consideration, comments must be
received at one of the addresses
provided below, no later than 5 p.m. on
June 30, 2008.
ADDRESSES: In commenting, please refer
to file code CMS–1493–IFC. Because of
staff and resource limitations, we cannot
accept comments by facsimile (FAX)
transmission.
You may submit comments in one of
four ways (please choose only one of the
ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to https://www.regulations.gov. Follow
the instructions for ‘‘Comment or
Submission’’ and enter the filecode to
find the document accepting comments.
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–1493–
IFC, P.O. Box 8013, Baltimore, MD
21244–8013.
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–1493–IFC, Mail Stop C4–26–05,
7500 Security Boulevard, Baltimore, MD
21244–1850.
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 either of the
following addresses:
a. Room 445–G, Hubert H. Humphrey
Building, 200 Independence Avenue,
SW., Washington, DC 20201.
(Because access to the interior of the
HHH Building is not readily available to
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Jkt 214001
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.)
b. 7500 Security Boulevard,
Baltimore, MD 21244–1850.
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.
Comments mailed to the addresses
indicated as appropriate for hand or
courier delivery may be delayed and
received after the comment period.
Submission of comments on
paperwork requirements. You may
submit comments on this document’s
paperwork requirements by following
instructions at the end of the
‘‘Collection of Information
Requirements’’ section in this
document.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Tzvi
Hefter, (410) 786–4487, General
information. Michele Hudson, (410)
786–5490, General information.
Elizabeth Truong, (410) 786–6005,
Federal rate update and short stay
outlier.
SUPPLEMENTARY INFORMATION:
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.regulations.gov. Follow the search
instructions on the 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.
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I. Background
A. Legislative and Regulatory Authority
Section 123 of the Medicare,
Medicaid, and SCHIP [State Children’s
Health Insurance Program] Balanced
Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106–113), as amended by
section 307(b) of the Medicare,
Medicaid, and SCHIP Benefits
Improvement and Protection Act of
2000 (BIPA) (Pub. L. 106–554), provides
for payment for both the operating and
capital-related costs of hospital
inpatient stays in long-term care
hospitals (LTCHs) under Medicare Part
A based on prospectively set rates. The
Medicare prospective payment system
(PPS) for LTCHs applies to hospitals
described in section 1886(d)(1)(B)(iv) of
the Social Security Act (the Act),
effective for cost reporting periods
beginning on or after October 1, 2002.
Section 1886(d)(1)(B)(iv)(I) of the Act
defines a LTCH as ‘‘a hospital which has
an average inpatient length of stay (as
determined by the Secretary) of greater
than 25 days.’’ Section
1886(d)(1)(B)(iv)(II) of the Act also
provides an alternative definition of
LTCHs: specifically, a hospital that first
received payment under section 1886(d)
of the Act in 1986 and has an average
inpatient length of stay (LOS) (as
determined by the Secretary of Health
and Human Services (the Secretary)) of
greater than 20 days and has 80 percent
or more of its annual Medicare inpatient
discharges with a principal diagnosis
that reflects a finding of neoplastic
disease in the 12-month cost reporting
period ending in fiscal year (FY) 1997.
Section 307(b)(1) of the BIPA, among
other things, mandates that the
Secretary shall examine, and may
provide for, adjustments to payments
under the LTCH PPS, including
adjustments to diagnosis related group
(DRG) weights, area wage adjustments,
geographic reclassification, outliers,
updates, and a disproportionate share
adjustment.
In the August 30, 2002 Federal
Register, we issued a final rule that
implemented the LTCH PPS authorized
under BBRA and BIPA (67 FR 55954).
This system uses information from
LTCH patient records to classify
patients into distinct long-term care
diagnosis-related groups (LTC–DRGs)
based on clinical characteristics and
expected resource needs. Payments are
calculated for each LTC–DRG and
provisions are made for appropriate
payment adjustments. Payment rates
under the LTCH PPS are updated
annually and published in the Federal
Register.
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In the August 30, 2002 final rule, we
also presented an in-depth discussion of
the LTCH PPS, including the patient
classification system, relative weights,
payment rates, additional payments
(short-stay outliers), and the budget
neutrality requirements mandated by
section 123 of the BBRA. The same final
rule that established regulations for the
LTCH PPS under 42 CFR part 412,
subpart O, also contained LTCH
provisions related to covered inpatient
services, limitation on charges to
beneficiaries, medical review
requirements, furnishing of inpatient
hospital services directly or under
arrangement, and reporting and
recordkeeping requirements. We refer
readers to the August 30, 2002 final rule
for a comprehensive discussion of the
research and data that supported the
establishment of the LTCH PPS (67 FR
55954).
In the June 6, 2003 Federal Register,
we published a final rule that set forth
the FY 2004 annual update of the
payment rates for the Medicare PPS for
inpatient hospital services furnished by
LTCHs (68 FR 34122). It also changed
the annual period for which the
payment rates are effective. The annual
updated rates are now effective from
July 1 through June 30 instead of from
October 1 through September 30. We
refer to the July through June time
period as a ‘‘long-term care hospital rate
year’’ (LTCH PPS rate year (RY)). In
addition, we changed the publication
schedule for the annual update to allow
for an effective date of July 1. The
payment amounts and factors used to
determine the annual update of the
LTCH PPS Federal rate are based on a
LTCH PPS rate year. While the LTCH
payment rate update is effective July 1,
the annual update of the DRG
classifications and relative weights for
LTCHs are linked to the annual
adjustments of the acute care hospital
inpatient DRGs and are effective each
October 1.
The most recent annual update to the
LTCH PPS was presented in the RY
2008 LTCH PPS final rule (72 FR 26870
through 27029). In that final rule, among
other things, we established a 0.71
percent update to the Federal rate for
RY 2008, as well as revising the existing
payment formula for certain short-stay
outlier (SSO) cases and the
establishment of a payment adjustment
policy applicable to LTCH and LTCH
satellite facility discharges that were
admitted from hospitals that are not colocated with the LTCH or LTCH satellite
facility and that exceed a certain
percentage threshold. In addition, in the
January 29, 2008 Federal Register, we
presented the annual proposed rule for
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RY 2009. Among other things, this
proposed rule presented a proposed
update for RY 2009 and other proposed
payment rate and policy changes.
On December 29, 2007 the Medicare,
Medicaid, and SCHIP Extension Act
(MMSEA) (Pub. L. 110–173) was
enacted. Specifically, section 114 of
MMSEA, entitled ‘‘Long-term care
hospitals,’’ made a number of changes
affecting payments to LTCHs for
inpatient services. Several of the
provisions of section 114 of MMSEA are
discussed in this interim final rule with
comment period.
B. Criteria for Classification as a LTCH
Under the existing regulations at
§ 412.23(e)(1) and (e)(2)(i), which
implement section 1886(d)(1)(B)(iv)(I) of
the Act, to qualify to be paid under the
LTCH PPS, a hospital must have a
provider agreement with Medicare and
must have an average Medicare
inpatient LOS of greater than 25 days.
Alternatively, § 412.23(e)(2)(ii) states
that for cost reporting periods beginning
on or after August 5, 1997, a hospital
that was first excluded from the PPS in
1986 and can demonstrate that at least
80 percent of its annual Medicare
inpatient discharges in the 12-month
cost reporting period ending in FY 1997
have a principal diagnosis that reflects
a finding of neoplastic disease must
have an average inpatient LOS for all
patients, including both Medicare and
non-Medicare inpatients, of greater than
20 days.
Section 412.23(e)(3) currently
provides that, subject to the provisions
of paragraphs (e)(3)(ii) through (e)(3)(iv)
of this section, the average Medicare
inpatient LOS, specified under
§ 412.23(e)(2)(i) is calculated by
dividing the total number of covered
and noncovered days of stay for
Medicare inpatients (less leave or pass
days; that is, days where the inpatient
is not occupying a bed but has not been
discharged) by the number of total
Medicare discharges for the hospital’s
most recent complete cost reporting
period. Currently, § 412.23 also provides
that subject to the provisions of
paragraphs (e)(3)(ii) through (e)(3)(iv) of
this section, the average inpatient LOS
specified under § 412.23(e)(2)(ii) is
calculated by dividing the total number
of days for all patients, including both
Medicare and non-Medicare inpatients
(less leave or pass days) by the number
of total discharges for the hospital’s
most recent complete cost reporting
period. The fiscal intermediaries (FIs) or
Medicare Administrative Contractors
(MACs) verify that LTCHs meet the
average LOS requirements. We note that
the inpatient days of a patient who is
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24873
admitted to a LTCH without any
remaining Medicare days of coverage,
regardless of the fact that the patient is
a Medicare beneficiary, will not be
included in the above calculation.
Because Medicare would not be paying
for any of the patient’s treatment, data
on the patient’s stay would not be
included in the Medicare claims
processing systems. As described in
§ 409.61, in order for both covered and
noncovered days of a LTCH
hospitalization to be included, a patient
admitted to the LTCH must have at least
1 remaining-benefit day. (For a more
detailed explanation, see the June 6,
2003 final rule (68 FR 34123).)
The FI’s or MAC’s determination of
whether or not a hospital qualifies as an
LTCH is based on the hospital’s
discharge data from the hospital’s most
recent complete cost reporting period as
specified in § 412.23(e)(3) and is
effective at the start of the hospital’s
next cost reporting period as specified
in § 412.22(d). However, if the hospital
does not meet the average LOS
requirement as specified in
§ 412.23(e)(2)(i) and (ii), the hospital
may provide the FI or MAC with data
indicating a change in the ALOS by the
same method for the period of at least
5 months of the immediately preceding
6-month period (69 FR 25676). Our
interpretation of existing § 412.23(e)(3)
is to allow hospitals to submit data
using a period of at least 5 months of the
most recent data from the immediately
preceding 6-month period.
II. Provisions of This Interim Final Rule
With Comment Period
Section 114 of MMSEA made a
number of changes affecting payments
to long-term care hospitals (LTCHs) for
inpatient services. This interim final
rule with comment period will
implement the following provisions
affecting LTCH PPS payments:
• Modification of payment
adjustments to certain SSO cases.
Section 114(c)(3) of MMSEA specifies
that the refinement of the SSO policy
implemented in RY 2008 shall not apply
for a 3-year period beginning with
discharges occurring on or after
December 29, 2007. Specifically, the
fourth SSO payment option in
§ 412.529(c)(3)(i) shall not apply for a 3year period, as discussed in section II.B.
of this interim final rule with comment
period.
• Revision to the RY 2008 rate
provision. Section 114(e)(1) of MMSEA
provides that the base rate for RY 2008
‘‘shall be the same as the base rate for
discharges for the hospital occurring
during the rate year ending in 2007.’’
Furthermore, in accordance with section
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114(e)(2) of MMSEA, the revised rate
will not be applicable to discharges
occurring on or after July 1, 2007 and
before April 1, 2008. (See section II.C.
of this interim final rule with comment
period.)
We also note that section 114(c)(4) of
MMSEA specifies that for a 3-year
period beginning on December 29, 2007,
the Secretary shall not make the onetime prospective adjustment to the
LTCH PPS payment rates provided for
in existing § 412.523(d)(3). Since under
existing regulations the one-time
prospective adjustment would have
impacted the update to the standard
Federal rate for RY 2009, we have
addressed this provision in the LTCH
PPS RY 2009 January 29, 2008 proposed
rule (73 FR 5353 through 5360). While
we did not propose the one-time
prospective adjustment in the RY 2009
proposed rule, we provided a possible
methodology for determining whether
the one-time prospective adjustment
would be warranted. We solicited
comments on the methodology and
indicated that we would take these
comments into consideration in
proposing to implement a one-time
prospective adjustment on or after
December 29, 2010, consistent with the
requirements of section 114(c)(4) of
MMSEA. Additionally, section 114(d) of
MMSEA established a 3-year
moratorium on the establishment and
classification of new LTCHs, LTCH
satellite facilities, and on any increase
in beds in existing LTCHs and LTCH
satellite facilities, with certain
exceptions. Section 114(c)(1) and (2) of
MMSEA established a 3-year delay in
the application of certain payment
policies which apply a payment
adjustment for LTCH patients admitted
from certain referring hospitals that
exceed various percentage thresholds.
These provisions will be addressed in a
separate rulemaking.
We would also note that section 114
of MMSEA included additional
provisions focusing on LTCHs not
directly related to payment policy that
are not in this interim final rule with
comment period are as follows:
• Section 1861 of the Act is amended
by adding a new paragraph (ccc)
defining LTCHs.
• The Secretary is directed to conduct
a study and submit a report to the
Congress within 18 months after the
date of enactment of MMSEA. The
Secretary will conduct a study on the
establishment of national LTCH facility
and patient criteria.
• The Secretary is directed to provide
an expanded review of medical
necessity for LTCH admission and
continued stay.
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A. Scope of the LTCH Regulations and
Section 114 of MMSEA
Section 114(e)(1) of MMSEA amended
section 1886 of the Act by adding a new
subsection m. New section 1886(m)(1)
of the Act provides that for provisions
related to the establishment and
implementation of a prospective
payment system for payments under
this title for inpatient hospital services
furnished by a long-term care hospital
described in subsection (d)(1)(B)(iv) (see
section 123 of BBRA and section 307(b)
of BIPA.) In addition, it added new
section 1886(m)(2) of the Act, which
pertains to the standard Federal rate for
RY 2008. We are revising our
regulations at § 412.1(a)(4) and
§ 412.500, which contain the scope of
the long-term care hospital regulations
to reference the statutory authority
provided by section 114 of MMSEA and
to reference the amendment to section
1886 of the Act.
B. Short Stay Outlier (SSO) Cases
1. Background
In the RY 2003 LTCH PPS final rule
(67 FR 55995), we established at
§ 412.529 a special payment policy for
short-stay outlier (SSO) cases, SSO cases
are cases with a covered LOS that is less
than or equal to five-sixths of the
geometric average LOS for each LTC–
DRG. When we established the SSO
policy, we explained that ‘‘[a] short stay
outlier case may occur when a
beneficiary receives less than the full
course of treatment at the LTCH before
being discharged’’ (67 FR 55995).
Therefore, under the LTCH PPS, we
implemented a special payment
adjustment for SSO cases. Under the
SSO policy established in the RY 2003
LTCH PPS final rule (67 FR 55995
through 56000), for LTCH PPS
discharges with a covered LOS of up to
and including five-sixths the geometric
average LOS for the LTC–DRG, we
adjusted the per discharge payment
under the LTCH PPS by the least of the
following three options: (1) 120 percent
of the estimated cost of the case; (2) 120
percent of the LTC–DRG specific per
diem amount multiplied by the covered
LOS of that discharge; or (3) the full
LTC–DRG payment.
Generally LTCHs are defined by
statute as having an average LOS of
greater than 25 days. We believe that
since a SSO case may occur when a
beneficiary receives less than the full
course of treatment at the LTCH before
being discharged, the full LTC–DRG
payment would generally not be
appropriate. Accordingly, based on an
evaluation of data from more than 3
years of the LTCH PPS which revealed
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that a large percentage of SSOs had a
covered LOS of 14 days or less, we
further revised our payment policy for
SSO cases in the RY 2007 and RY 2008
LTCH PPS final rules (71 FR 27845
through 27870 and 72 FR 26904 through
26918) for LTCHs defined by section
1886(d)(1)(B)(iv)(I) of the Act. However,
as we discussed in detail in the RY 2007
and RY 2008 LTCH PPS final rules (71
FR 27863 and 72 FR 26907), we did not
believe that it was appropriate to apply
our RY 2007 and RY 2008 SSO policy
revisions, discussed below, to the
unique situation of a LTCHs defined by
section 1886(d)(1)(B)(iv)(II) of the Act.
For RY 2007, consistent with the
Secretary’s broad authority ‘‘to provide
for appropriate adjustments to the longterm hospital payment system * * *’’
established under section 123 of the
BBRA as amended by section 307(b)(1)
of BIPA, we reduced the cost-based
option of the SSO policy adjustment to
100 percent of the estimated costs of the
case for discharges occurring on or after
July 1, 2006. Furthermore, in the RY
2007 LTCH PPS final rule, we added a
fourth payment option to the SSO
policy, following an analysis of the FY
2004 MedPAR data that indicated that
even under the existing SSO policy,
LTCHs were admitting short stay
patients that we believe could have
continued treatment at the acute care
hospitals (paid for under the IPPS).
Furthermore, we believe that these types
of admissions (that is, of patients from
acute care hospitals that result in short
stay cases at the LTCH) could result in
unnecessary and inappropriate
admissions to LTCHs. This fourth
payment alternative is a blend of an
LTCH PPS amount that is comparable to
the IPPS per diem payment amount, and
the 120 percent of the LTC–DRG per
diem payment amount. Specifically, the
blended payment is based on a
percentage of an IPPS comparable
amount computed as a per diem and
capped at the full IPPS-comparable
amount, and a percentage of a payment
based on 120 percent of the LTC–DRG
per diem amount so that as the length
of the stay increases, the percentage of
the IPPS comparable per diem amount
will decrease and the percentage based
on 120 percent of the LTC–DRG per
diem specific amount will increase.
This reflects our belief that as the length
of a SSO stay increases, the case begins
to resemble a more ‘‘typical’’ LTCH stay
and, therefore, it is appropriate that
incrementally, payment should be based
more on what would otherwise be
payable under the LTCH PPS and less
on the ‘‘IPPS-comparable’’ amount.
(Specifics of calculating the ‘‘IPPS-
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comparable’’ amount are set forth in
considerable detail in the RY 2007
LTCH PPS final rule (71 FR 27852
through 27853).)
In the RY 2008 LTCH PPS final rule
(72 FR 26904 through 26918), we further
revised the SSO policy based upon
additional analysis of the FY 2005
MedPAR data. Specifically, our analysis
revealed that 42 percent of LTCH SSO
discharges, or approximately 19,750
cases, had covered lengths of stay that
were less than or equal to the ALOS
plus one standard deviation of an IPPS
discharge for the same DRG as the LTC–
DRG to which the case was assigned.
(For additional discussion of this
specific determination, see the RY 2008
LTCH PPS final rule (72 FR 26905).) At
that time, we stated that we believed
that the 42 percent of LTCH SSO cases
in the RY 2005 MedPAR files with LOS
that are equal to or less than the IPPS
average LOS plus one standard
deviation for the same DRGs under the
IPPS appeared to be comparable to
typical stays at acute care hospitals.
For this subgroup of SSO cases, we
stated that even with the blend option,
we believe that payment in excess of
what Medicare would have paid under
the IPPS is inappropriate. (We note that
in the FY 2008 IPPS final rule (72 FR
47130) the Medicare severity-diagnosis
related groups (MS–DRGs) and the
Medicare severity-long-term carediagnosis related groups (MS–LTC–
DRGs) were adopted for the IPPS and
the LTCH PPS, respectively. Therefore,
for SSO policies that are applicable to
LTCH discharges occurring on or after
October 1, 2007, all references to DRGs
and LTC–DRGs should be understood to
represent MS–DRGs and MS–LTC–DRGs
(see § 412.503). Accordingly, in the RY
2008 LTCH PPS final rule we
established an alternative fourth
payment option for SSO cases under the
LTCH PPS for discharges occurring on
or after July 1, 2007. Specifically, the
covered LOS of a SSO case which has
been assigned to a particular MS–LTC–
DRG is compared to the average LOS
plus one standard deviation for the
same DRG under the IPPS, which we
call ‘‘IPPS comparable threshold.’’ For
example, if the covered LOS of the
LTCH SSO case is equal to or less than
the average LOS plus one standard
deviation for the same DRG under the
IPPS, the LTCH SSO case would be
within the ‘‘IPPS comparable threshold’’
(72 FR 26870 and 26906). We note that
the ‘‘IPPS-comparable threshold’’ is
only applicable if a particular stay is a
SSO, that is, with a covered LOS equal
to or less than five-sixth of the average
LOS of the applicable MS–LTC–DRG.
Thus, for a LTCH SSO case that is
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within the ‘‘IPPS comparable
threshold,’’ the fourth payment option
would be based on an amount
comparable to the hospital IPPS per
diem amount determined under
§ 412.529(d)(4). For a SSO case with a
covered LOS that exceeds the ‘‘IPPScomparable’’ threshold, the fourth
payment option continues to be the
‘‘blend’’ established in RY 2007,
described above. For all SSO cases, the
first three SSO payment options are the
same. To summarize, as established in
§ 412.529, for each SSO case treated at
a LTCH defined under section
1886(d)(1)(B)(iv)(I), Medicare will pay
the least of the following:
• 100 percent of the estimated cost of
the case.
• 120 percent of the LTC–DRG
specific per diem amount multiplied by
the covered LOS of the particular case.
• The full LTC–DRG.
• Comparing the covered LOS for a
SSO case and the ‘‘IPPS comparable
threshold’’ one of the following:
++ The blend of the 120 percent of
the LTC–DRG specific per diem amount
and an amount comparable to the IPPS
per diem amount specified in
§ 412.529(c)(2)(iv), for cases where the
covered LOS for a SSO case is greater
than the ‘‘IPPS comparable threshold’’.
++ An amount comparable to the
hospital IPPS per diem amount
determined under § 412.529(d)(4) for
cases where the covered LOS for a SSO
is less than or equal to the ‘‘IPPS
comparable threshold.’’ We note that the
revisions of the SSO policy payment
options that were finalized beginning in
RY 2007, (that is, the ‘‘blend’’ and
reduction of the 120 percent of the
estimated cost to 100 percent), and RY
2008 (the ‘‘IPPS-comparable’’ threshold
option) were not applied to the unique
situation of a hospital designated as a
LTCH by the Congress under section
1886(d)(1)(B)(iv)(II) of the Act, that is, (a
‘‘subclause (II)’’ LTCH) (71 FR 27863
and 72 FR 26907).
2. Change to the SSO Policy Due to the
Medicare, Medicaid, and SCHIP
Extension Act of 2007
Section 114(c)(3) of MMSEA provides
that ‘‘[t]he Secretary shall not apply, for
the 3-year period beginning on the date
of the enactment of this Act, the
amendments finalized on May 11, 2007
(72 Federal Register 26904, 26992)
made to the short-stay outlier payment
provision for long-term care hospitals
contained in section 412.529(c)(3)(i) of
title 42, Code of Federal Regulations, or
any similar provision.’’ Accordingly, for
discharges beginning on or after
December 29, 2007 and before December
29, 2010, the fourth SSO payment
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24875
option based on the ‘‘IPPS comparable
threshold’’ as discussed above shall not
apply. Specifically, during the 3-year
period specified above, for each SSO
case treated at a LTCH defined under
section 1886(d)(1)(B)(iv)(I) of the Act,
Medicare will pay the least of: (1) 100
percent of the estimated cost of the case;
(2) 120 percent of the LTC–DRG specific
per diem amount multiplied by the
covered LOS of the particular case; (3)
the full LTC–DRG; or (4) the blend of
the 120 percent of the LTC–DRG
specific per diem amount and an
amount comparable to the IPPS per
diem amount specified in
§ 412.529(c)(2)(iv).
Accordingly, we are amending the
appropriate regulations pertaining to the
payment of SSO to implement section
114(c)(3) of MMSEA. Specifically, we
made several heading changes and
redesignated paragraph (c)(4), which
refers to the policy for reconciliation of
SSO payments, as the new paragraph (f).
We note that we have not made any
substantive changes to the policy for
reconciliation of SSO payment (other
than those associated with
implementing section 114(c)(3) of
MMSEA) and that the redesignation of
the paragraph (c)(4) as (f), in addition
the heading changes are simply
reorganizational changes intended to
make the regulations in this section
more accessible. We also note that in
amending the regulations, we
discovered that several citations under
existing paragraph (c)(4) were incorrect,
originating from the RY 2008 final rule
when we redesignated this paragraph
from (c)(3) to (c)(4) (which was also an
organizational change and not a
substantive policy change to the policy
on reconciliation of SSO payment) but
inadvertently did not change the
citations to correspond to the
redesignation. In this interim final rule
with comment period, we have
corrected the citations in the
redesignated paragraph (f).
C. Standard Federal Rate for the 2008
LTCH PPS Rate Year
1. Background
As specified at § 412.523(c)(3)(ii), for
LTCH PPS rate years beginning RY 2004
through RY 2006, we updated the
standard Federal rate by a factor to
adjust for the most recent estimate of the
increases in prices of an appropriate
market basket of goods and services for
LTCHs. When we moved the date of the
annual update of the LTCH PPS from
October 1 to July l in the RY 2004 LTCH
PPS final rule (68 FR 34126 through
34128), we revised § 412.523(c)(3)
accordingly.
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PWALKER on PROD1PC71 with RULES
In the RY 2007 LTCH PPS final rule
(71 FR 27818), we explained that rather
than solely using the most recent
estimate of the LTCH PPS market basket
as the basis of the update factor for the
Federal rate at RY 2007, we believed it
is appropriate to adjust the Federal rate
to account for the changes in case mix
that are due to changes in coding
practices (rather than an increase in
patient severity) as indicated by our
ongoing monitoring activities. We
established at § 412.523(c)(3)(iii) that
the update to the standard Federal rate
for the 2007 LTCH PPS rate year was
zero percent, based on the most recent
estimate of the LTCH PPS market basket
at the time and an adjustment to
account for changes in case-mix in prior
periods that are due to changes in
coding practices, rather than increased
patient severity, in FY 2004. Therefore,
effective from July 1, 2006 through June
30, 2007, the standard rate was $38,086
(71 FR 27818). For the following year,
we also considered changes in case mix
in 2005 as opposed to 2004 that were
due to changes in coding practices
(rather than increased patient severity)
in establishing the update to the Federal
rate for the 2008 LTCH PPS rate year. In
the RY 2008 LTCH final rule (72 FR
26887 through 26890), we adjusted the
Federal rate based on the most recent
estimate of market basket (3.2 percent)
and an adjustment to account for
changes in coding practices (2.49
percent) in FY 2005. Accordingly, we
established at § 412.523(c)(3)(iv) that the
update to the standard Federal rate for
RY 2008 was 0.71 percent and we
established the LTCH PPS standard
Federal rate, effective from July 1, 2007
through June 30, 2008, at $38,356.45
(see 72 FR 26890).
2. Section 114(e)(1) and (2) of the
Medicare, Medicaid, and SCHIP
Extension Act of 2007
Section 114(e)(1) of MMSEA revises
the base rate for RY 2008. Specifically,
section 114(e)(1) of Public Law 110–173
adds a new subsection 1886(m)(2) of the
Act, which provides that the base rate
for RY 2008 ‘‘shall be the same as the
base rate for discharges for the hospital
occurring during the rate year ending in
2007.’’ In addition, section 114(e)(2) of
Public Law 110–173 indicates that
section 1886(m)(2) of the Act ‘‘shall not
apply to discharges occurring on or after
July 1, 2007, and before April 1, 2008’’
(that is, the first 9 months of RY 2008).
We note that the statute uses the term
‘‘base rate,’’ which is an undefined term
in both section 1886(m) of the Act and
in 42 CFR Part 412, subpart O. As we
explained in the LTCH PPS RY 2009
proposed rule (73 FR 5361), we are
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interpreting that term to be the standard
Federal rate because we believe
Congress meant to eliminate the 0.71
percent update from the RY 2008
standard Federal rate. Under this
interpretation, the standard Federal rate
for RY 2008 would be the same as the
standard Federal rate for RY 2007, that
is, the 0.71 percent update finalized in
the RY 2008 LTCH PPS final rule would
be reversed.
We do not believe that the term ‘‘base
rate’’ could refer to the ‘‘unadjusted
rate’’ because the unadjusted rate for RY
2008 would be updated by the current
year’s update factor in order to
determine the standard Federal rate for
RY 2008 (that is, to determine the
standard Federal rate for any given rate
year, the previous year’s standard
Federal rate, referred herein as the
‘‘unadjusted rate,’’ is updated by the
current year’s update factor) and doing
so would result in the same Federal rate
for RY 2008 as was adopted in the RY
2008 final rule. To illustrate
mathematically, if ‘‘base rate’’ is
interpreted to mean ‘‘unadjusted rate,’’
the ‘‘unadjusted rate’’ for RY 2008
($38,086.04) would be the same as the
RY 2007 ‘‘unadjusted rate’’ ($38,086.04).
The RY 2008 ‘‘unadjusted rate’’ of
$38,086.04 would subsequently be
updated by the 0.71 percent update
factor finalized in the RY 2008 final
rule, resulting in a standard Federal rate
for RY 2008 of $38,356.45, which is the
same standard Federal rate that was
originally finalized in the RY 2008 final
rule. If we adopted this interpretation,
we believe that LTCH PPS payments
would be unaffected by section 114(e)(1)
of MMSEA. Therefore, we believe that
the term ‘‘base rate’’ used in section
114(e)(1) of MMSEA refers to the
standard Federal rate. In subsequent
sections of this preamble, we are using
the term standard Federal rate instead of
‘‘base rate’’ when referencing the
provision in section 114(e)(1) of
MMSEA in order to avoid further
confusion.
In the RY 2008 LTCH PPS final rule
(72 FR 26890), we established a
standard Federal rate of $38,356.45 for
the 2008 LTCH PPS rate year that was
based on the best available data and
policies established in that final rule. As
discussed above, section 114(e) of
MMSEA revises the standard Federal
rate for RY 2008 while specifying that
this rate ‘‘shall not apply to discharges
occurring on or after July 1, 2007, and
before April 1, 2008’’ (that is, the first
9 months of RY 2008). Specifically,
section 114(e)(1) of MMSEA provides
that under the new section 1886(m)(2)
of the Act, the standard Federal rate for
RY 2008 shall be the same as the
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Fmt 4700
Sfmt 4700
standard Federal rate for RY 2007. The
standard Federal rate for RY 2007 was
$38,086.04 (71 FR 27818). Thus, to
implement 114(e)(1) of the MMSEA, we
are establishing through this interim
final rule with comment period that the
RY 2008 standard Federal rate is
$38,086.04 (the same as the standard
Federal rate for 2007). However, section
114(e)(2) of MMSEA specifically delays
the application of the revised RY 2008
standard Federal rate. Specifically,
section 114(e)(2) of MMSEA states that
the revised RY 2008 standard Federal
rate ‘‘shall not apply to discharges
occurring on or after July 1, 2007, and
before April 1, 2008.’’ Therefore, LTCH
payments for discharges occurring on or
after July 1, 2007 through March 31,
2008, will continue to include an
adjustment of 0.71 percent, that is,
payments are based on the standard
Federal rate in § 412.523(c)(3)(iii) as
updated by 0.71 percent. Accordingly,
for discharges occurring on or after
April 1, 2008 through June 30, 2008, the
revised RY 2008 standard Federal rate of
$38,086.04 is applied, while payments
for discharges occurring from July 1,
2007 through March 31, 2008 are
determined based on the standard
Federal rate in § 412.523(c)(3)(iii)
increased by 0.71 percent that is,
$38,356.45. We are revising
§ 412.523(c)(iv) to conform to the
revision of the standard Federal rate for
RY 2008 under section 114(e) of
MMSEA and to specify how payments
are determined during RY 2008.
Furthermore, section 114(e) of
MMSEA affects the high cost outlier
fixed-loss amount currently in effect
since it revises the standard Federal rate
for RY 2008 and the standard Federal
rate is used to determine the fixed-loss
amount. Specifically, the current fixedloss amount was determined based on a
standard Federal rate of $38,356.45. (See
the RY 2008 LTCH PPS final rule (72 FR
26896 through 26899), as amended by
the RY 2008 correction notice (72 FR
36613), for a discussion of the
methodology and data used to
determine the current fixed-loss amount
for RY 2008.) Since for discharges
occurring on or after April 1, 2008
through June 30, 2008, payments will be
based on the revised RY 2008 standard
Federal rate of $38,086.04, consistent
with the existing regulations at
§ 412.525(a), in order to maintain
estimated total payments for high cost
outlier cases at 8 percent of the
estimated total payments, we are
revising the high cost outlier fixed-loss
amount. Accordingly, under the broad
authority conferred on the Secretary by
section 123 of the BBRA, as amended by
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section 307(b) of BIPA, to make
appropriate adjustments to the LTCH
PPS, the revised high cost outlier fixedloss amount effective for discharges
occurring on or after April 1, 2008
through June 30, 2008 is $20,707. This
revised fixed-loss amount was
determined using the same data and
methodology presented in the RY 2008
LTCH PPS final rule and takes into
account the revised RY 2008 standard
Federal rate as provided for in the
MMSEA (discussed above).
We note that in the RY 2009 LTCH
PPS proposed rule (73 FR 5362),
consistent with our historical practice,
we proposed to update the standard
Federal rate from the previous year
(which is $38,086.04 due to section
114(e) of MMSEA, as explained above)
to determine the proposed standard
Federal rate for RY 2009.
PWALKER on PROD1PC71 with RULES
III. Response to 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.
IV. Waiver of Proposed Rulemaking
We ordinarily publish a notice of
proposed rulemaking and invite public
comment on a proposed rule in
accordance with 5 U.S.C. section 553(b)
of the Administrative Procedure Act
(APA). In addition, section 1871(b)(1)
provides that the Secretary shall provide
for notice of the proposed regulation in
the Federal Register and a period of not
less than 60 days for public comment
thereon. Section 1871(b)(2) provides for
an exception to the requirement that the
Secretary provide for notice of a
proposed rulemaking and a period of
not less than 60 days for public
comment. Specifically, section
1871(b)(2)(B) of the Act provides an
exception to these requirements when a
law establishes a specific deadline for
the implementation of a provision and
the deadline is less than 150 days after
the date of the enactment of the statute
in which the deadline is contained.
Here, various provisions of the MMSEA
addressed in this interim final rule with
comment period, changed existing
LTCH PPS policies (it affected the shortstay outlier policy in § 412.529 and
revised the RY 2008 standard Federal
rate. Such changes were required to be
implemented: (1) Beginning December
29, 2007 (section 114(c)(3) of MMSEA),
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Jkt 214001
and (2) were effective for RY 2008 on
April 1, 2008 (section 114(e)(2) of
MMSEA). Thus, the statute’s deadline
for implementation of the MMSEArelated policies contained in this
interim final regulation was less than
150 days after the date of the enactment
of the statute in which the deadline was
contained. Therefore, under the
authority of section 1871(b)(2)(B) of the
Act, we are waiving notice and
comment procedures for the MMSEA
policy changes pertaining to the shortstay outlier policy, and the revised RY
2008 standard Federal rate.
Moreover, we also find good cause to
waive the requirement for publication of
a notice of proposed rulemaking and
comment on the grounds that it is
unnecessary, impracticable and contrary
to the public interest under the
authority of 5 U.S.C. 553(b)(B). In
general, this interim final rule with
comment period sets forth three
nondiscretionary provisions of the
MMSEA with respect to short-stay
outliers and the rate for RY 2008.
Therefore, we believe pursuing notice
and comment is unnecessary. Moreover,
because that process would prevent
timely implementation of
congressionally mandated policy
changes that are to be effective, as
described previously in this section, we
believe notice and comment procedures
are impracticable and contrary to the
public interest. In addition, notice and
comment would delay significantly the
issuance of essential guidance to the
public which is necessary to assist them
in making complex, time-sensitive
business decisions of significant
financial consequence with respect to
their efforts to comply with section 114
of the MMSEA. Failure to provide this
guidance would impede such business
decisions. This regulation also makes
three changes that are outside of the
MMSEA mandated changes discussed
above. Specifically, this regulation
makes minor technical corrections to
two incorrect cites that are embedded in
§ 412.529 and it revises the fixed-loss
amount for the period April 1, 2008,
through June 30, 2008. With respect to
the technical corrections of the two
embedded cites in § 412.529, notice and
comment is also unnecessary. The
revisions do not represent changes to
our policy, and the public interest
would, as a result, be best served by the
timely correction of these technical
errors. A delay in the applicability of
the nonsubstantive changes would be
contrary to the public interest because
the incorrect cites, if left in place, result
in confusion with respect to the
calculation of cost-to-charge ratios. We
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24877
also find good cause to waive notice and
comment procedures on the revised
fixed-loss amount for the period April 1,
2008, through June 30, 2008. The fixedloss amount under the LTCH PPS is
directly affected by the statutorily
mandated change to the standard
Federal rate for RY 2008 cited above.
The existing regulations limit estimated
high cost outlier payments under the
LTCH PPS to 8 percent of total
estimated LTCH PPS payments.
Accordingly, in order to assure that
estimated high cost outlier payments are
maintained at this 8 percent target, in
conjunction with the Congressionally
mandated change in the LTCH PPS
payments (that is, the standard Federal
rate) that applies April 1, 2008, it would
be contrary to the public interest if we
did not make this conforming change to
the high cost outlier fixed-loss amount,
which lowers the fixed-loss amount for
the period April 1, 2008, through June
30, 2008.
Section 1871(e)(1)(A) of the Act
provides that a substantive change in
regulations, manual instructions,
interpretative rules, statements of
policy, or guidelines of general
applicability under this title shall not be
applied (by extrapolation or otherwise)
retroactively to items and services
furnished before the effective date of the
change unless the Secretary determines
that (i) such retroactive application is
necessary to comply with statutory
requirements; or (ii) failure to apply the
change retroactively would be contrary
to the public interest. As explained in
the paragraph above, the MMSEA
requires the Secretary to implement
various policy changes
contemporaneously with the enactment
of the MMSEA on December 29, 2007.
Therefore, under the authority of section
1871(e)(1)(A)(i) of the Act, we are
making the provisions of this interim
final rule with comment period that
implement section 114(c)(3) of MMSEA
retroactive to December 29, 2007.
Additionally, as explained previously,
the Secretary also finds that it would be
contrary to the public interest if these
provisions were not made effective on
December 29, 2007, as explained above.
Also, as explained in the previous
paragraph, section 114(e)(1) of MMSEA
requires the Secretary to revise standard
Federal rate for RY 2008. However, the
Secretary shall not apply such revised
rate to discharges occurring on or after
July 1, 2007, and before April 1, 2008
(section 114(e)(2) of the Act).
Consequently, the regulations
implementing section 114(e)(2) of
MMSEA must be effective for a period
predating this interim final rule with
comment period under the authority of
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section 1871(e)(1)(A)(i) of the Act
(specifically, beginning April 1, 2008).
As explained previously, it would also
be contrary to the public interest if these
policies were not effective April 1, 2008.
In general, many of the provisions of
the MMSEA implemented in this
interim final regulation are beneficial to
LTCHs. If those MMSEA provisions of
this regulation were not effective under
the timeframes noted above, most
LTCHs would be deprived the full
benefit of these provisions. With respect
to the minor technical corrections to
§ 412.529, failure to make these
nonsubstantive changes applicable
beginning on December 29, 2007, would
be contrary to the public interest
because of the confusion that could
result from the incorrect citations in
§ 412.529. It is in the public interest to
make the correction to prevent
confusion among long-term care
hospitals attempting to calculate cost-tocharge ratios. It is also contrary to the
public interest as described above to not
make the change to the fixed-loss
amount applicable beginning April 1,
2008. Therefore, under the authority of
section 1871(e)(1)(A)(ii) of the Act, we
are making these changes effective
under the timeframes noted above. For
the same reasons noted above, we find
good cause under section 553(d)(3) of
the APA to waive the 30-day delay in
the effective date.
V. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995, we are required to provide 60day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
and Budget (OMB) for review and
approval. In order to fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we
solicit comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, and including
automated collection techniques.
We are soliciting public comment on
each of these issues for the following
sections of this document that contain
information collection requirements
(ICRs):
Section 412.529(f)(4) states that for
discharges occurring on or after October
1, 2006, short-stay outlier payments are
subject to certain provisions.
Specifically, § 412.529(f)(4)(i) states that
a hospital may also request that its fiscal
intermediary use a different (higher or
lower) cost-to-charge ratio and this
request must be approved by the
appropriate CMS Regional Office.
The burden associated with this
requirement is the time and effort
necessary for a hospital to collect
supporting evidence for submission, to
draft the request for alternative cost-tocharge ratio, and to submit the request
along with the supporting evidence to
the appropriate CMS Regional Office.
While this requirement is subject to the
PRA, the burden is currently approved
under OMB control number 0938–1020
with an expiration date of June 30, 2010.
TABLE 3.—ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN
OMB Control
No.
Regulation section(s)
Respondents
Responses
Burden per response (hours)
Total annual
burden (hours)
§ 412.529(f) ..........................................................................
0938–1020
18
18
8
144
Total ..............................................................................
........................
........................
........................
........................
144
PWALKER on PROD1PC71 with RULES
If you comment on these information
collection and recordkeeping
requirements, please do either of the
following:
1. Submit your comments
electronically as specified in the
ADDRESSES section of this proposed rule;
or
2. Mail copies to the address specified
in the ADDRESSES section of this
proposed rule and to the Office of
Information and Regulatory Affairs,
Office of Management and Budget,
Room 10235, New Executive Office
Building, Washington, DC 20503, Attn:
Carolyn L. Raffaelli, CMS Desk Officer,
CMS–1493–IFC,
Carolyn_L._Raffaelli@omb.eop.gov. Fax
(202) 395–6974.
VI. Regulatory Impact Analysis
We have examined the impacts of this
rule as required by Executive Order
12866 (September 1993, Regulatory
Planning and Review), the Regulatory
Flexibility Act (RFA) (September 19,
1980, Pub. L. 96–354), section 1102(b) of
the Social Security Act, the Unfunded
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Mandates Reform Act of 1995 (Pub. L.
104–4), Executive Order 13132 on
Federalism, and the Congressional
Review Act (5 U.S.C. 804 (2)).
Executive Order 12866 (as amended
by Executive Order 13258) 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 1 year).
As stated in section II.C. of this
preamble, section 114(e)(1) of the
Medicare, Medicaid, and SCHIP
Extension Act of 2007 at the new
1886(m)(2) of the Act revises the
standard Federal rate for RY 2008 by
providing that ‘‘for discharges occurring
during the rate year ending in 2008 for
a hospital, the base rate for such
discharges for the hospital shall be the
PO 00000
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Fmt 4700
Sfmt 4700
same as the base rate for discharges for
the hospital occurring during the rate
year ending in 2007’’ (in other words,
the standard Federal rate for RY 2008 is
the same as the standard Federal rate for
2007). Thus, the standard Federal rate
for RY 2008 is established in section
II.C. of this interim final rule with
comment period at $38,086.04 (the same
as the standard Federal rate for 2007).
However, as we discussed in section
II.D. of this interim final rule with
comment period, section 114(e)(2) of the
MMSEA specifically indicates that this
rate ‘‘shall not apply to discharges
occurring on or after July 1, 2007, and
before April 1, 2008.’’ Therefore,
payments for discharges occurring on or
after July 1, 2007 through March 31,
2008, are based on $38,356.45 (as
established in the RY 2008 LTCH PPS
final rule), while for discharges
occurring on or after April 1, 2008
through June 30, 2008, payments are
based on the RY 2008 standard Federal
rate which is $38,086.04. CMS’ Office of
the Actuary (OACT) estimates a
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projected decrease of approximately $5
million in estimated aggregate LTCH
PPS payments for RY 2008 resulting
from the change in payments for
discharges occurring on or after April 1,
2008 through June 30, 2008.
Additionally, as discussed in section
II.B. of this interim final rule with
comment period, section 114(c)(3) of
MMSEA requires a 3-year suspension of
our implementation of the revision to
the SSO policy at § 412.529(c)(3)(i) that
was finalized in the RY 2008 final rule.
OACT estimates that the SSO provision
included in the MMSEA will result in
a projected increase in estimated
aggregate LTCH PPS payments for RY
2008 of $20 million. Consequently, we
estimate the combined impact on
estimated aggregate LTCH PPS
payments for RY 2008 from the MMSEA
provisions that are presented in this
interim final rule with comment period
to be approximately $15 million.
Because the combined distributional
effects and estimated changes to the
Medicare program payments would not
be greater than $100 million, this
interim final rule with comment period
would not be considered a major
economic rule, as defined in this
section.
The RFA requires agencies to analyze
options for regulatory relief of small
businesses. For purposes of the RFA,
small entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most
hospitals and most other providers and
suppliers are small entities, either by
nonprofit status or by having revenues
of $6.5 million to $31.5 million in any
1 year. (For further information, see the
Small Business Administration’s
regulation at 70 FR 72577, December 6,
2005.) Individuals and States are not
included in the definition of a small
entity. Because we lack data on
individual hospital receipts, we cannot
determine the number of small
proprietary LTCHs. Therefore, we
assume that all LTCHs are considered
small entities for the purpose of this
impact discussion. Medicare FIs and
MACs are not considered to be small
entities. As we discuss in detail
throughout the preamble of this interim
final rule with comment period, we
believe that the provisions specified by
the MMSEA presented in this rule
would result in an increase in estimated
aggregate LTCH PPS payments.
Accordingly, the Secretary certifies that
this interim final rule with comment
period would not have a significant
economic impact on a substantial
number of small entities.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
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Jkt 214001
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 604 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a Metropolitan Statistical Area for
Medicare payment regulations and has
fewer than 100 beds. As stated above,
implementing the provisions specified
by the MMSEA that are discussed in
this rule would result in an increase in
estimated aggregate LTCH PPS
payments; therefore, we believe this rule
will not have a significant impact on
small rural hospitals. Accordingly, the
Secretary certifies that this interim final
rule with comment period would not
have a significant economic impact on
the operations of a substantial number
of small rural hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 also
requires that agencies assess anticipated
costs and benefits before issuing any
rule whose mandates require spending
in any 1 year of $100 million in 1995
dollars, updated annually for inflation.
In 2008, that threshold level is currently
approximately $130 million. This
interim final rule with comment period
would not mandate any requirements
for State, local, or tribal governments,
nor would it result in expenditures by
the private sector of $130 million or
more in any 1 year.
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.
Since this regulation does not impose
any costs on State or local governments,
the requirements of Executive Order
13132 are not applicable.
In accordance with the provisions of
Executive Order 12866, this regulation
was reviewed by the Office of
Management and Budget.
List of Subjects in 42 CFR Part 412
Administrative practice and
procedure, Health facilities, Medicare,
Puerto Rico, Reporting and
recordkeeping requirements.
For the reasons stated in the preamble
of this interim final rule with comment
period, the Centers for Medicare &
Medicaid Services is amending 42 CFR
Chapter IV as follows:
I
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24879
PART 412—PROSPECTIVE PAYMENT
SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
1. The authority citation for part 412
is revised to read as follows:
I
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
2. In § 412.1 paragraph (a)(4) is revised
to read as follows:
I
§ 412.1
Scope of part.
(a) * * *
(4) This part implements the
following regarding long-term care
hospitals—
(i) Section 123 of Public Law 106–
113, which provides for the
establishment of a prospective payment
system for the costs of inpatient hospital
services furnished to Medicare
beneficiaries by long-term care hospitals
described in section 1886(d)(1)(B)(iv) of
the Act, for cost reporting periods
beginning on or after October 1, 2002.
(ii) The provisions of section 307(b) of
Public Law 106–554, which state that
the Secretary shall examine and may
provide for appropriate adjustments to
the long-term care hospital prospective
payment system, including adjustments
to diagnosis-related group (DRG)
weights, area wage adjustments,
geographic reclassification, outlier
adjustments, updates, and
disproportionate share adjustments
consistent with section 1886(d)(5)(F) of
the Act.
(iii) Section 114 of Public Law 110–
173, which contains several provisions
regarding long-term care hospitals,
including the—
(A) Amendment of section 1886 of the
Act to add a new subsection (m) that
references section 123 of Public Law
106–113 and section 307(b) of Public
Law 106–554 for the establishment and
implementation of a prospective
payment system for payments under
title XVIII for inpatient hospital services
furnished by a long-term care hospital
described in section 1886(d)(1)(B)(iv) of
the Act.
(B) Revision of the standard Federal
rate for RY 2008.
*
*
*
*
*
I 3. Section 412.500 is amended by
revising paragraph (a) to read as follows:
§ 412.500
Basis and scope of subpart.
(a) Basis. This subpart implements the
following:
(1) Section 123 of Public Law 106–
113, which provides for the
implementation of a prospective
payment system for long-term care
hospitals described in section
1886(d)(1)(B)(iv) of the Act.
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Federal Register / Vol. 73, No. 88 / Tuesday, May 6, 2008 / Rules and Regulations
(2) Section 307 of Public Law 106–
554, which states that the Secretary
shall examine and may provide for
appropriate adjustments to that system,
including adjustments to DRG weights,
area wage adjustments, geographic
reclassification, outliers, updates, and
disproportionate share adjustments
consistent with section 1886(d)(5)(F) of
the Act.
(3) Section 114 of Public Law 110–
173, which contains several provisions
regarding long-term care hospitals,
including the—
(i) Amendment of section 1886 of the
Act to add a new subsection (m) that
references section 123 of Public Law
106–113 and section 307(b) of Public
Law 106–554 for the establishment and
implementation of a prospective
payment system for payments under
title XVIII for inpatient hospital services
furnished by a long-term care hospital
described in section 1886(d)(1)(B)(iv) of
the Act; and
(ii) Revision of the standard Federal
rate for RY 2008.
*
*
*
*
*
I 4. Section 412.523 is amended by
revising paragraph (c)(3)(iv) to read as
follows:
§ 412.523 Methodology for calculating the
Federal prospective payment rates.
PWALKER on PROD1PC71 with RULES
*
*
*
*
*
(c) * * *
(3) * * *
(iv) For long-term care hospital
prospective payment system rate year
beginning July 1, 2007 and ending June
30, 2008.
(A) The standard Federal rate for longterm care hospital prospective payment
system rate year beginning July 1, 2007
and ending June 30, 2008 is the same as
the standard Federal rate for the
previous long-term care hospital
prospective payment system rate year.
The standard Federal rate is adjusted, as
appropriate, as described in paragraph
(d) of this section.
(B) With respect to discharges
occurring on or after July 1, 2007 and
before April 1, 2008, payments are
based on the standard Federal rate in
paragraph (c)(3)(iii) of this section
updated by 0.71 percent.
*
*
*
*
*
I 5. Section 412.529 is amended by—
I A. Revising paragraphs (c)(1) through
(c)(3).
I B. Redesignating paragraph (c)(4) as
paragraph (f).
I C. Revising newly redesignated
paragraph (f).
§ 412.529 Special payment provision for
short-stay outliers.
*
*
*
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*
*
16:31 May 05, 2008
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(c) * * *
(1) Discharges occurring before July 1,
2006. For discharges from long-term
care hospitals described under
§ 412.23(e)(2)(i), occurring before July 1,
2006, the LTCH prospective payment
system adjusted payment amount for a
short-stay outlier case is the least of the
following amounts:
(i) One hundred and twenty (120)
percent of the LTC–DRG specific per
diem amount determined under
paragraph (d)(1) of this section.
(ii) One hundred and twenty (120)
percent of the estimated cost of the case
determined under paragraph (d)(2) of
this section.
(iii) The Federal prospective payment
for the LTC–DRG determined under
paragraph (d)(3) of this section.
(2) Discharges occurring on or after
July 1, 2006 and before July 1, 2007 and
discharges occurring on or after
December 29, 2007 and before
December 29, 2010. For discharges from
long-term care hospitals described
under § 412.23(e)(2)(i) occurring on or
after July 1, 2006 and before July 1, 2007
and discharges occurring on or after
December 29, 2007 and before December
29, 2010, the LTCH prospective
payment system adjusted payment
amount for a short-stay outlier case is
the least of the following amounts:
(i) One hundred and twenty (120)
percent of the LTC–DRG specific per
diem amount determined under
paragraph (d)(1) of this section.
(ii) One hundred (100) percent of the
estimated cost of the case determined
under paragraph (d)(2) of this section.
(iii) The Federal prospective payment
for the LTC–DRG as determined under
paragraph (d)(3) of this section.
(iv) An amount payable under subpart
O computed as a blend of an amount
comparable to the hospital inpatient
prospective payment system per diem
amount determined under paragraph
(d)(4)(i) of this section and the 120
percent of the LTC–DRG specific per
diem payment amount determined
under paragraph (d)(1) of this section.
(A) The blend percentage applicable
to the 120 percent of the LTC–DRG
specific per diem payment amount
determined under paragraph (d)(1) of
this section is determined by dividing
the covered length-of-stay of the case by
the lesser of five-sixths of the geometric
average length of stay of the LTC–DRG
or 25 days, not to exceed 100 percent.
(B) The blend percentage of the
amount determined under paragraph
(d)(4)(i) of this section is determined by
subtracting the percentage determined
in paragraph (A) from 100 percent.
(3) Discharges occurring on or after
July 1, 2007 and before December 29,
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Fmt 4700
Sfmt 4700
2007 and discharges occurring on or
after December 29, 2010. For discharges
from long-term care hospitals described
under § 412.23(e)(2)(i) occurring on or
after July 1, 2007 and before December
29, 2007 and discharges occurring on or
after December 29, 2010, the LTCH
prospective payment system adjusted
payment amount for a short-stay outlier
case is adjusted by either of the
following:
(i) If the covered length of stay of the
case assigned to a particular LTC–DRG
is less than or equal to one standard
deviation from the geometric ALOS of
the same DRG under the inpatient
prospective payment system (the IPPScomparable threshold), the LTCH
prospective payment system adjusted
payment amount for such a case is the
least of the following amounts:
(A) One hundred and twenty (120)
percent of the LTC–DRG specific per
diem amount determined under
paragraph (d)(1) of this section.
(B) One hundred (100) percent of the
estimated cost of the case determined
under paragraph (d)(2) of this section.
(C) The Federal prospective payment
for the LTC–DRG as determined under
paragraph (d)(3) of this section.
(D) An amount payable under subpart
O of this part comparable to the hospital
inpatient prospective payment system
per diem amount determined under
paragraph (d)(4) of this section.
(ii) If the covered length of stay of the
case assigned to a particular LTC–DRG
is greater than one standard deviation
from the geometric ALOS of the same
DRG under the inpatient prospective
payment system (the IPPS-comparable
threshold), the LTCH prospective
payment system adjusted payment
amount for such a case is determined
under paragraph (c)(2) of this section.
*
*
*
*
*
(f) Reconciliation of short-stay outlier
payments. Payments are reconciled in
accordance with one of the following:
(1) Discharges occurring on or after
October 1, 2002, and before August 8,
2003. For discharges occurring on or
after October 1, 2002, and before August
8, 2003, no reconciliations are made to
short-stay outlier payments upon cost
report settlement to account for
differences between cost-to-charge ratio
and the actual cost-to-charge ratio of the
case.
(2) Discharges occurring on or after
August 8, 2003, and before October 1,
2006. For discharges occurring on or
after August 8, 2003, and before October
1, 2006, short-stay outlier payments are
subject to the provisions of
§ 412.84(i)(1), (i)(3), and (i)(4) and (m)
for adjustments of cost-to-charge ratios.
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(3) Discharges occurring on or after
October 1, 2003, and before October 1,
2006. For discharges occurring on or
after October 1, 2003, and before
October 1, 2006, short-stay outlier
payments are subject to the provisions
of § 412.84(i)(2) for adjustments to costto-charge ratios.
(4) Discharges occurring on or after
October 1, 2006. For discharges
occurring on or after October 1, 2006,
short-stay outlier payments are subject
to the following provisions:
(i) CMS may specify an alternative to
the cost-to-charge ratio otherwise
applicable under paragraph (f)(4)(ii) of
this section. A hospital may also request
that its fiscal intermediary use a
different (higher or lower) cost-to-charge
ratio based on substantial evidence
presented by the hospital. This request
must be approved by the appropriate
CMS Regional Office.
(ii) The cost-to-charge ratio applied at
the time a claim is processed is based
on either the most recent settled cost
report or the most recent tentatively
settled cost report, whichever is from
the latest cost reporting period.
(iii) The fiscal intermediary may use
a statewide average cost-to-charge ratio,
which CMS establishes annually, if it is
unable to determine an accurate cost-tocharge ratio for a hospital in one of the
following circumstances:
(A) A new hospital that has not yet
submitted its first Medicare cost report.
(For this purpose, a new hospital is
defined as an entity that has not
accepted assignment of an existing
hospital’s provider agreement in
accordance with § 489.18 of this
chapter.)
(B) A hospital whose cost-to-charge
ratio is in excess of 3 standard
deviations above the corresponding
national geometric mean. CMS
establishes and publishes this mean
annually.
(C) Any other hospital for which data
to calculate a cost-to-charge ratio are not
available.
(iv) Any reconciliation of outlier
payments is based on the cost-to-charge
ratio calculated based on a ratio of costs
to charges computed from the relevant
cost report and charge data determined
at the time the cost report coinciding
with the discharge is settled.
(v) At the time of any reconciliation
under paragraph (f)(4)(iv) of this section,
outlier payments may be adjusted to
account for the time value of any
underpayments or overpayments. Any
adjustment is based upon a widely
available index to be established in
advance by the Secretary, and is applied
from the midpoint of the cost reporting
period to the date of reconciliation.
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(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance; and Program No. 93.774,
Medicare—Supplementary Medical
Insurance Program)
Dated: April 4, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: April 30, 2008.
Michael O. Leavitt,
Secretary.
[FR Doc. 08–1217 Filed 5–1–08; 4:00 pm]
BILLING CODE 4120–01–P
DEPARTMENT OF HOMELAND
SECURITY
48 CFR Part 3036
[Docket No. DHS–2007–0024]
RIN 1601–AA44
Department of Homeland Security
Acquisition Regulation; One-Step
Turnkey Design-Build Contracts for
United States Coast Guard (HSAR
Case 2007–002)
Department of Homeland
Security.
ACTION: Final rule.
AGENCY:
SUMMARY: The Department of Homeland
Security (DHS or Department) is
amending the Homeland Security
Acquisition Regulation (HSAR) to
incorporate delegation of one-step
turnkey design-build authority from the
Secretary of Homeland Security to the
United States Coast Guard (USCG or
Coast Guard). This rule implements
changes that result from the USCG
Authorization Act for Fiscal Year 2006.
DATES: Effective May 6, 2008.
FOR FURTHER INFORMATION CONTACT:
Kathy Strouss, Department of Homeland
Security, Office of the Chief
Procurement Officer, Acquisition Policy
and Legislation, (202) 447–5300.
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Public Comments
III. Regulatory Analyses
A. Executive Order 12866 Assessment
B. Regulatory Flexibility Act
I. Background
Under the United States Coast Guard
(USCG) Authorization Act for Fiscal
Year 2006, the Secretary of Homeland
Security was authorized to use one-step
turnkey design-build procedures when
entering into construction contracts. See
Public Law 109–241, sec. 205. On July
13, 2007, DHS published a proposed
rule, which would amend the
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Sfmt 4700
24881
Department of Homeland Security
Acquisition Regulation (HSAR) to
incorporate the delegation of turnkey
design-build authority from the
Secretary of Homeland Security to the
United States Coast Guard. See 72 FR
38548. DHS adopts the proposed rule as
a final rule without change.
II. Discussion of Public Comments
DHS received public comments from
6 sources on the proposed rule. The
public comments received and the
responses are summarized below:
Comment: Several comments were
opposed to this HSAR revision, which
would incorporate the delegation of
one-step turnkey design-build
procedures authority from the Secretary
of Homeland Security to the United
States Coast Guard. Most commenters
fully understood that DHS issued the
proposed rule to implement changes
enacted by Congress in section 205 of
Public Law 109–241; however, the
commenters still urged DHS not to
adopt the proposed regulation, believing
instead that the Department should
continue to follow the two-phase
design-build procedures laid out in the
Federal Acquisition Reform Act (FARA)
of 1996.
Response: DHS disagrees. The Coast
Guard has studied the one-step turnkey
design-build process and is fully
convinced that it is in the best interest
of both the Coast Guard and the
government to adopt this streamlined
acquisition method. The Coast Guard
delegation of one-step turnkey designbuild authority is consistent with
section 205 of Public Law 109–241.
Each construction acquisition is unique,
and one-step turnkey design-build
methods will be used where it is
reasonable, prudent, and offers the best
contracting strategy for the Coast Guard.
Comment: Other comments fully
supported the adoption of a universal
design-build methodology for all federal
design-build projects. The commenters
wrote, however, that the adoption of a
turnkey design-build (one-step) method
would unnecessarily confuse the private
sector with conflicting procurement
methodologies.
Response: DHS disagrees. The private
sector is very familiar with one-step
turnkey design-build and has been using
the process for years. The private sector
has gained experience with one-step
design-build use at other federal
agencies, such as the Department of
Defense (DoD) and the Department of
Transportation.
Comment: One commenter reminded
DHS that the Federal Acquisition
Regulation (FAR) Part 36 governs the
use of two-phase design-build
E:\FR\FM\06MYR1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 88 (Tuesday, May 6, 2008)]
[Rules and Regulations]
[Pages 24871-24881]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 08-1217]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 412
[CMS-1493-IFC]
RIN 0938-AP33
Medicare Program; Changes for Long-Term Care Hospitals Required
by Certain Provisions of the Medicare, Medicaid, SCHIP Extension Act of
2007: 3-Year Delay in the Application of Payment Adjustments for Short
Stay Outliers and Changes to the Standard Federal Rate
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Interim final rule with comment period.
-----------------------------------------------------------------------
SUMMARY: This interim final rule with comment period implements certain
provisions of section 114 of the Medicare, Medicaid, and SCHIP
Extension Act of 2007 relating to long term care hospitals (LTCHs).
These provisions include a 3-year delay in the application of certain
provisions of the payment adjustment for short-stay outliers and
revisions to the RY 2008 standard Federal rate.
DATES: Effective date: The provisions of Sec. 412.1 and Sec. 412.500
are effective June 5, 2008. The provisions of Sec. 412.529(c)(1)
through (c)(3) are effective on December 29, 2007. In accordance with
section 1871(e)(1)(A)(i) and (ii) of the Social Security Act (the Act),
the Secretary has determined that retroactive application of the
provisions of Sec. 412.529(c)(1) through (c)(3) is necessary to comply
with the statute and that failure to apply the changes retroactively
would be contrary to public interest. Also, in accordance with section
1871(e)(1)(A)(ii) of the Act, the technical corrections to Sec.
412.529(f)
[[Page 24872]]
(redesignated from Sec. 412.529(c)(4)) are effective on December 29,
2007. In accordance with section 1871(e)(1)(A)(ii) of the Act, the
Secretary has determined that failure to apply the technical
corrections in Sec. 412.529(f) retroactively would be contrary to
public interest. Additionally, in accordance with section
1871(e)(1)(A)(i) and (ii) of the Act, the provisions of Sec. 412.523
are effective April 1, 2008. Also, in accordance with section
1871(e)(1)(A)(ii) of the Act, the fixed loss-amount provision in
section II.D.2. of this preamble which revises the fixed-loss amount
for discharge occurring on or after April 1, 2008, and through June 30,
2008, is effective April 1, 2008.
Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on June 30, 2008.
ADDRESSES: In commenting, please refer to file code CMS-1493-IFC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the instructions for
``Comment or Submission'' and enter the filecode to find the document
accepting comments.
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-1493-IFC, P.O. Box 8013, Baltimore, MD 21244-8013.
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-1493-IFC, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
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 either of the following addresses:
a. Room 445-G, Hubert H. Humphrey Building, 200 Independence
Avenue, SW., Washington, DC 20201.
(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
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I. Background
A. Legislative and Regulatory Authority
Section 123 of the Medicare, Medicaid, and SCHIP [State Children's
Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106-113), as amended by section 307(b) of the Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA) (Pub. L. 106-554), provides for payment for both the operating
and capital-related costs of hospital inpatient stays in long-term care
hospitals (LTCHs) under Medicare Part A based on prospectively set
rates. The Medicare prospective payment system (PPS) for LTCHs applies
to hospitals described in section 1886(d)(1)(B)(iv) of the Social
Security Act (the Act), effective for cost reporting periods beginning
on or after October 1, 2002.
Section 1886(d)(1)(B)(iv)(I) of the Act defines a LTCH as ``a
hospital which has an average inpatient length of stay (as determined
by the Secretary) of greater than 25 days.'' Section
1886(d)(1)(B)(iv)(II) of the Act also provides an alternative
definition of LTCHs: specifically, a hospital that first received
payment under section 1886(d) of the Act in 1986 and has an average
inpatient length of stay (LOS) (as determined by the Secretary of
Health and Human Services (the Secretary)) of greater than 20 days and
has 80 percent or more of its annual Medicare inpatient discharges with
a principal diagnosis that reflects a finding of neoplastic disease in
the 12-month cost reporting period ending in fiscal year (FY) 1997.
Section 307(b)(1) of the BIPA, among other things, mandates that
the Secretary shall examine, and may provide for, adjustments to
payments under the LTCH PPS, including adjustments to diagnosis related
group (DRG) weights, area wage adjustments, geographic
reclassification, outliers, updates, and a disproportionate share
adjustment.
In the August 30, 2002 Federal Register, we issued a final rule
that implemented the LTCH PPS authorized under BBRA and BIPA (67 FR
55954). This system uses information from LTCH patient records to
classify patients into distinct long-term care diagnosis-related groups
(LTC-DRGs) based on clinical characteristics and expected resource
needs. Payments are calculated for each LTC-DRG and provisions are made
for appropriate payment adjustments. Payment rates under the LTCH PPS
are updated annually and published in the Federal Register.
[[Page 24873]]
In the August 30, 2002 final rule, we also presented an in-depth
discussion of the LTCH PPS, including the patient classification
system, relative weights, payment rates, additional payments (short-
stay outliers), and the budget neutrality requirements mandated by
section 123 of the BBRA. The same final rule that established
regulations for the LTCH PPS under 42 CFR part 412, subpart O, also
contained LTCH provisions related to covered inpatient services,
limitation on charges to beneficiaries, medical review requirements,
furnishing of inpatient hospital services directly or under
arrangement, and reporting and recordkeeping requirements. We refer
readers to the August 30, 2002 final rule for a comprehensive
discussion of the research and data that supported the establishment of
the LTCH PPS (67 FR 55954).
In the June 6, 2003 Federal Register, we published a final rule
that set forth the FY 2004 annual update of the payment rates for the
Medicare PPS for inpatient hospital services furnished by LTCHs (68 FR
34122). It also changed the annual period for which the payment rates
are effective. The annual updated rates are now effective from July 1
through June 30 instead of from October 1 through September 30. We
refer to the July through June time period as a ``long-term care
hospital rate year'' (LTCH PPS rate year (RY)). In addition, we changed
the publication schedule for the annual update to allow for an
effective date of July 1. The payment amounts and factors used to
determine the annual update of the LTCH PPS Federal rate are based on a
LTCH PPS rate year. While the LTCH payment rate update is effective
July 1, the annual update of the DRG classifications and relative
weights for LTCHs are linked to the annual adjustments of the acute
care hospital inpatient DRGs and are effective each October 1.
The most recent annual update to the LTCH PPS was presented in the
RY 2008 LTCH PPS final rule (72 FR 26870 through 27029). In that final
rule, among other things, we established a 0.71 percent update to the
Federal rate for RY 2008, as well as revising the existing payment
formula for certain short-stay outlier (SSO) cases and the
establishment of a payment adjustment policy applicable to LTCH and
LTCH satellite facility discharges that were admitted from hospitals
that are not co-located with the LTCH or LTCH satellite facility and
that exceed a certain percentage threshold. In addition, in the January
29, 2008 Federal Register, we presented the annual proposed rule for RY
2009. Among other things, this proposed rule presented a proposed
update for RY 2009 and other proposed payment rate and policy changes.
On December 29, 2007 the Medicare, Medicaid, and SCHIP Extension
Act (MMSEA) (Pub. L. 110-173) was enacted. Specifically, section 114 of
MMSEA, entitled ``Long-term care hospitals,'' made a number of changes
affecting payments to LTCHs for inpatient services. Several of the
provisions of section 114 of MMSEA are discussed in this interim final
rule with comment period.
B. Criteria for Classification as a LTCH
Under the existing regulations at Sec. 412.23(e)(1) and (e)(2)(i),
which implement section 1886(d)(1)(B)(iv)(I) of the Act, to qualify to
be paid under the LTCH PPS, a hospital must have a provider agreement
with Medicare and must have an average Medicare inpatient LOS of
greater than 25 days. Alternatively, Sec. 412.23(e)(2)(ii) states that
for cost reporting periods beginning on or after August 5, 1997, a
hospital that was first excluded from the PPS in 1986 and can
demonstrate that at least 80 percent of its annual Medicare inpatient
discharges in the 12-month cost reporting period ending in FY 1997 have
a principal diagnosis that reflects a finding of neoplastic disease
must have an average inpatient LOS for all patients, including both
Medicare and non-Medicare inpatients, of greater than 20 days.
Section 412.23(e)(3) currently provides that, subject to the
provisions of paragraphs (e)(3)(ii) through (e)(3)(iv) of this section,
the average Medicare inpatient LOS, specified under Sec.
412.23(e)(2)(i) is calculated by dividing the total number of covered
and noncovered days of stay for Medicare inpatients (less leave or pass
days; that is, days where the inpatient is not occupying a bed but has
not been discharged) by the number of total Medicare discharges for the
hospital's most recent complete cost reporting period. Currently, Sec.
412.23 also provides that subject to the provisions of paragraphs
(e)(3)(ii) through (e)(3)(iv) of this section, the average inpatient
LOS specified under Sec. 412.23(e)(2)(ii) is calculated by dividing
the total number of days for all patients, including both Medicare and
non-Medicare inpatients (less leave or pass days) by the number of
total discharges for the hospital's most recent complete cost reporting
period. The fiscal intermediaries (FIs) or Medicare Administrative
Contractors (MACs) verify that LTCHs meet the average LOS requirements.
We note that the inpatient days of a patient who is admitted to a LTCH
without any remaining Medicare days of coverage, regardless of the fact
that the patient is a Medicare beneficiary, will not be included in the
above calculation. Because Medicare would not be paying for any of the
patient's treatment, data on the patient's stay would not be included
in the Medicare claims processing systems. As described in Sec.
409.61, in order for both covered and noncovered days of a LTCH
hospitalization to be included, a patient admitted to the LTCH must
have at least 1 remaining-benefit day. (For a more detailed
explanation, see the June 6, 2003 final rule (68 FR 34123).)
The FI's or MAC's determination of whether or not a hospital
qualifies as an LTCH is based on the hospital's discharge data from the
hospital's most recent complete cost reporting period as specified in
Sec. 412.23(e)(3) and is effective at the start of the hospital's next
cost reporting period as specified in Sec. 412.22(d). However, if the
hospital does not meet the average LOS requirement as specified in
Sec. 412.23(e)(2)(i) and (ii), the hospital may provide the FI or MAC
with data indicating a change in the ALOS by the same method for the
period of at least 5 months of the immediately preceding 6-month period
(69 FR 25676). Our interpretation of existing Sec. 412.23(e)(3) is to
allow hospitals to submit data using a period of at least 5 months of
the most recent data from the immediately preceding 6-month period.
II. Provisions of This Interim Final Rule With Comment Period
Section 114 of MMSEA made a number of changes affecting payments to
long-term care hospitals (LTCHs) for inpatient services. This interim
final rule with comment period will implement the following provisions
affecting LTCH PPS payments:
Modification of payment adjustments to certain SSO cases.
Section 114(c)(3) of MMSEA specifies that the refinement of the SSO
policy implemented in RY 2008 shall not apply for a 3-year period
beginning with discharges occurring on or after December 29, 2007.
Specifically, the fourth SSO payment option in Sec. 412.529(c)(3)(i)
shall not apply for a 3-year period, as discussed in section II.B. of
this interim final rule with comment period.
Revision to the RY 2008 rate provision. Section 114(e)(1)
of MMSEA provides that the base rate for RY 2008 ``shall be the same as
the base rate for discharges for the hospital occurring during the rate
year ending in 2007.'' Furthermore, in accordance with section
[[Page 24874]]
114(e)(2) of MMSEA, the revised rate will not be applicable to
discharges occurring on or after July 1, 2007 and before April 1, 2008.
(See section II.C. of this interim final rule with comment period.)
We also note that section 114(c)(4) of MMSEA specifies that for a
3-year period beginning on December 29, 2007, the Secretary shall not
make the one-time prospective adjustment to the LTCH PPS payment rates
provided for in existing Sec. 412.523(d)(3). Since under existing
regulations the one-time prospective adjustment would have impacted the
update to the standard Federal rate for RY 2009, we have addressed this
provision in the LTCH PPS RY 2009 January 29, 2008 proposed rule (73 FR
5353 through 5360). While we did not propose the one-time prospective
adjustment in the RY 2009 proposed rule, we provided a possible
methodology for determining whether the one-time prospective adjustment
would be warranted. We solicited comments on the methodology and
indicated that we would take these comments into consideration in
proposing to implement a one-time prospective adjustment on or after
December 29, 2010, consistent with the requirements of section
114(c)(4) of MMSEA. Additionally, section 114(d) of MMSEA established a
3-year moratorium on the establishment and classification of new LTCHs,
LTCH satellite facilities, and on any increase in beds in existing
LTCHs and LTCH satellite facilities, with certain exceptions. Section
114(c)(1) and (2) of MMSEA established a 3-year delay in the
application of certain payment policies which apply a payment
adjustment for LTCH patients admitted from certain referring hospitals
that exceed various percentage thresholds. These provisions will be
addressed in a separate rulemaking.
We would also note that section 114 of MMSEA included additional
provisions focusing on LTCHs not directly related to payment policy
that are not in this interim final rule with comment period are as
follows:
Section 1861 of the Act is amended by adding a new
paragraph (ccc) defining LTCHs.
The Secretary is directed to conduct a study and submit a
report to the Congress within 18 months after the date of enactment of
MMSEA. The Secretary will conduct a study on the establishment of
national LTCH facility and patient criteria.
The Secretary is directed to provide an expanded review of
medical necessity for LTCH admission and continued stay.
A. Scope of the LTCH Regulations and Section 114 of MMSEA
Section 114(e)(1) of MMSEA amended section 1886 of the Act by
adding a new subsection m. New section 1886(m)(1) of the Act provides
that for provisions related to the establishment and implementation of
a prospective payment system for payments under this title for
inpatient hospital services furnished by a long-term care hospital
described in subsection (d)(1)(B)(iv) (see section 123 of BBRA and
section 307(b) of BIPA.) In addition, it added new section 1886(m)(2)
of the Act, which pertains to the standard Federal rate for RY 2008. We
are revising our regulations at Sec. 412.1(a)(4) and Sec. 412.500,
which contain the scope of the long-term care hospital regulations to
reference the statutory authority provided by section 114 of MMSEA and
to reference the amendment to section 1886 of the Act.
B. Short Stay Outlier (SSO) Cases
1. Background
In the RY 2003 LTCH PPS final rule (67 FR 55995), we established at
Sec. 412.529 a special payment policy for short-stay outlier (SSO)
cases, SSO cases are cases with a covered LOS that is less than or
equal to five-sixths of the geometric average LOS for each LTC-DRG.
When we established the SSO policy, we explained that ``[a] short stay
outlier case may occur when a beneficiary receives less than the full
course of treatment at the LTCH before being discharged'' (67 FR
55995). Therefore, under the LTCH PPS, we implemented a special payment
adjustment for SSO cases. Under the SSO policy established in the RY
2003 LTCH PPS final rule (67 FR 55995 through 56000), for LTCH PPS
discharges with a covered LOS of up to and including five-sixths the
geometric average LOS for the LTC-DRG, we adjusted the per discharge
payment under the LTCH PPS by the least of the following three options:
(1) 120 percent of the estimated cost of the case; (2) 120 percent of
the LTC-DRG specific per diem amount multiplied by the covered LOS of
that discharge; or (3) the full LTC-DRG payment.
Generally LTCHs are defined by statute as having an average LOS of
greater than 25 days. We believe that since a SSO case may occur when a
beneficiary receives less than the full course of treatment at the LTCH
before being discharged, the full LTC-DRG payment would generally not
be appropriate. Accordingly, based on an evaluation of data from more
than 3 years of the LTCH PPS which revealed that a large percentage of
SSOs had a covered LOS of 14 days or less, we further revised our
payment policy for SSO cases in the RY 2007 and RY 2008 LTCH PPS final
rules (71 FR 27845 through 27870 and 72 FR 26904 through 26918) for
LTCHs defined by section 1886(d)(1)(B)(iv)(I) of the Act. However, as
we discussed in detail in the RY 2007 and RY 2008 LTCH PPS final rules
(71 FR 27863 and 72 FR 26907), we did not believe that it was
appropriate to apply our RY 2007 and RY 2008 SSO policy revisions,
discussed below, to the unique situation of a LTCHs defined by section
1886(d)(1)(B)(iv)(II) of the Act.
For RY 2007, consistent with the Secretary's broad authority ``to
provide for appropriate adjustments to the long-term hospital payment
system * * *'' established under section 123 of the BBRA as amended by
section 307(b)(1) of BIPA, we reduced the cost-based option of the SSO
policy adjustment to 100 percent of the estimated costs of the case for
discharges occurring on or after July 1, 2006. Furthermore, in the RY
2007 LTCH PPS final rule, we added a fourth payment option to the SSO
policy, following an analysis of the FY 2004 MedPAR data that indicated
that even under the existing SSO policy, LTCHs were admitting short
stay patients that we believe could have continued treatment at the
acute care hospitals (paid for under the IPPS). Furthermore, we believe
that these types of admissions (that is, of patients from acute care
hospitals that result in short stay cases at the LTCH) could result in
unnecessary and inappropriate admissions to LTCHs. This fourth payment
alternative is a blend of an LTCH PPS amount that is comparable to the
IPPS per diem payment amount, and the 120 percent of the LTC-DRG per
diem payment amount. Specifically, the blended payment is based on a
percentage of an IPPS comparable amount computed as a per diem and
capped at the full IPPS-comparable amount, and a percentage of a
payment based on 120 percent of the LTC-DRG per diem amount so that as
the length of the stay increases, the percentage of the IPPS comparable
per diem amount will decrease and the percentage based on 120 percent
of the LTC-DRG per diem specific amount will increase. This reflects
our belief that as the length of a SSO stay increases, the case begins
to resemble a more ``typical'' LTCH stay and, therefore, it is
appropriate that incrementally, payment should be based more on what
would otherwise be payable under the LTCH PPS and less on the ``IPPS-
comparable'' amount. (Specifics of calculating the ``IPPS-
[[Page 24875]]
comparable'' amount are set forth in considerable detail in the RY 2007
LTCH PPS final rule (71 FR 27852 through 27853).)
In the RY 2008 LTCH PPS final rule (72 FR 26904 through 26918), we
further revised the SSO policy based upon additional analysis of the FY
2005 MedPAR data. Specifically, our analysis revealed that 42 percent
of LTCH SSO discharges, or approximately 19,750 cases, had covered
lengths of stay that were less than or equal to the ALOS plus one
standard deviation of an IPPS discharge for the same DRG as the LTC-DRG
to which the case was assigned. (For additional discussion of this
specific determination, see the RY 2008 LTCH PPS final rule (72 FR
26905).) At that time, we stated that we believed that the 42 percent
of LTCH SSO cases in the RY 2005 MedPAR files with LOS that are equal
to or less than the IPPS average LOS plus one standard deviation for
the same DRGs under the IPPS appeared to be comparable to typical stays
at acute care hospitals.
For this subgroup of SSO cases, we stated that even with the blend
option, we believe that payment in excess of what Medicare would have
paid under the IPPS is inappropriate. (We note that in the FY 2008 IPPS
final rule (72 FR 47130) the Medicare severity-diagnosis related groups
(MS-DRGs) and the Medicare severity-long-term care-diagnosis related
groups (MS-LTC-DRGs) were adopted for the IPPS and the LTCH PPS,
respectively. Therefore, for SSO policies that are applicable to LTCH
discharges occurring on or after October 1, 2007, all references to
DRGs and LTC-DRGs should be understood to represent MS-DRGs and MS-LTC-
DRGs (see Sec. 412.503). Accordingly, in the RY 2008 LTCH PPS final
rule we established an alternative fourth payment option for SSO cases
under the LTCH PPS for discharges occurring on or after July 1, 2007.
Specifically, the covered LOS of a SSO case which has been assigned to
a particular MS-LTC-DRG is compared to the average LOS plus one
standard deviation for the same DRG under the IPPS, which we call
``IPPS comparable threshold.'' For example, if the covered LOS of the
LTCH SSO case is equal to or less than the average LOS plus one
standard deviation for the same DRG under the IPPS, the LTCH SSO case
would be within the ``IPPS comparable threshold'' (72 FR 26870 and
26906). We note that the ``IPPS-comparable threshold'' is only
applicable if a particular stay is a SSO, that is, with a covered LOS
equal to or less than five-sixth of the average LOS of the applicable
MS-LTC-DRG. Thus, for a LTCH SSO case that is within the ``IPPS
comparable threshold,'' the fourth payment option would be based on an
amount comparable to the hospital IPPS per diem amount determined under
Sec. 412.529(d)(4). For a SSO case with a covered LOS that exceeds the
``IPPS-comparable'' threshold, the fourth payment option continues to
be the ``blend'' established in RY 2007, described above. For all SSO
cases, the first three SSO payment options are the same. To summarize,
as established in Sec. 412.529, for each SSO case treated at a LTCH
defined under section 1886(d)(1)(B)(iv)(I), Medicare will pay the least
of the following:
100 percent of the estimated cost of the case.
120 percent of the LTC-DRG specific per diem amount
multiplied by the covered LOS of the particular case.
The full LTC-DRG.
Comparing the covered LOS for a SSO case and the ``IPPS
comparable threshold'' one of the following:
++ The blend of the 120 percent of the LTC-DRG specific per diem
amount and an amount comparable to the IPPS per diem amount specified
in Sec. 412.529(c)(2)(iv), for cases where the covered LOS for a SSO
case is greater than the ``IPPS comparable threshold''.
++ An amount comparable to the hospital IPPS per diem amount
determined under Sec. 412.529(d)(4) for cases where the covered LOS
for a SSO is less than or equal to the ``IPPS comparable threshold.''
We note that the revisions of the SSO policy payment options that were
finalized beginning in RY 2007, (that is, the ``blend'' and reduction
of the 120 percent of the estimated cost to 100 percent), and RY 2008
(the ``IPPS-comparable'' threshold option) were not applied to the
unique situation of a hospital designated as a LTCH by the Congress
under section 1886(d)(1)(B)(iv)(II) of the Act, that is, (a ``subclause
(II)'' LTCH) (71 FR 27863 and 72 FR 26907).
2. Change to the SSO Policy Due to the Medicare, Medicaid, and SCHIP
Extension Act of 2007
Section 114(c)(3) of MMSEA provides that ``[t]he Secretary shall
not apply, for the 3-year period beginning on the date of the enactment
of this Act, the amendments finalized on May 11, 2007 (72 Federal
Register 26904, 26992) made to the short-stay outlier payment provision
for long-term care hospitals contained in section 412.529(c)(3)(i) of
title 42, Code of Federal Regulations, or any similar provision.''
Accordingly, for discharges beginning on or after December 29, 2007 and
before December 29, 2010, the fourth SSO payment option based on the
``IPPS comparable threshold'' as discussed above shall not apply.
Specifically, during the 3-year period specified above, for each SSO
case treated at a LTCH defined under section 1886(d)(1)(B)(iv)(I) of
the Act, Medicare will pay the least of: (1) 100 percent of the
estimated cost of the case; (2) 120 percent of the LTC-DRG specific per
diem amount multiplied by the covered LOS of the particular case; (3)
the full LTC-DRG; or (4) the blend of the 120 percent of the LTC-DRG
specific per diem amount and an amount comparable to the IPPS per diem
amount specified in Sec. 412.529(c)(2)(iv).
Accordingly, we are amending the appropriate regulations pertaining
to the payment of SSO to implement section 114(c)(3) of MMSEA.
Specifically, we made several heading changes and redesignated
paragraph (c)(4), which refers to the policy for reconciliation of SSO
payments, as the new paragraph (f). We note that we have not made any
substantive changes to the policy for reconciliation of SSO payment
(other than those associated with implementing section 114(c)(3) of
MMSEA) and that the redesignation of the paragraph (c)(4) as (f), in
addition the heading changes are simply reorganizational changes
intended to make the regulations in this section more accessible. We
also note that in amending the regulations, we discovered that several
citations under existing paragraph (c)(4) were incorrect, originating
from the RY 2008 final rule when we redesignated this paragraph from
(c)(3) to (c)(4) (which was also an organizational change and not a
substantive policy change to the policy on reconciliation of SSO
payment) but inadvertently did not change the citations to correspond
to the redesignation. In this interim final rule with comment period,
we have corrected the citations in the redesignated paragraph (f).
C. Standard Federal Rate for the 2008 LTCH PPS Rate Year
1. Background
As specified at Sec. 412.523(c)(3)(ii), for LTCH PPS rate years
beginning RY 2004 through RY 2006, we updated the standard Federal rate
by a factor to adjust for the most recent estimate of the increases in
prices of an appropriate market basket of goods and services for LTCHs.
When we moved the date of the annual update of the LTCH PPS from
October 1 to July l in the RY 2004 LTCH PPS final rule (68 FR 34126
through 34128), we revised Sec. 412.523(c)(3) accordingly.
[[Page 24876]]
In the RY 2007 LTCH PPS final rule (71 FR 27818), we explained that
rather than solely using the most recent estimate of the LTCH PPS
market basket as the basis of the update factor for the Federal rate at
RY 2007, we believed it is appropriate to adjust the Federal rate to
account for the changes in case mix that are due to changes in coding
practices (rather than an increase in patient severity) as indicated by
our ongoing monitoring activities. We established at Sec.
412.523(c)(3)(iii) that the update to the standard Federal rate for the
2007 LTCH PPS rate year was zero percent, based on the most recent
estimate of the LTCH PPS market basket at the time and an adjustment to
account for changes in case-mix in prior periods that are due to
changes in coding practices, rather than increased patient severity, in
FY 2004. Therefore, effective from July 1, 2006 through June 30, 2007,
the standard rate was $38,086 (71 FR 27818). For the following year, we
also considered changes in case mix in 2005 as opposed to 2004 that
were due to changes in coding practices (rather than increased patient
severity) in establishing the update to the Federal rate for the 2008
LTCH PPS rate year. In the RY 2008 LTCH final rule (72 FR 26887 through
26890), we adjusted the Federal rate based on the most recent estimate
of market basket (3.2 percent) and an adjustment to account for changes
in coding practices (2.49 percent) in FY 2005. Accordingly, we
established at Sec. 412.523(c)(3)(iv) that the update to the standard
Federal rate for RY 2008 was 0.71 percent and we established the LTCH
PPS standard Federal rate, effective from July 1, 2007 through June 30,
2008, at $38,356.45 (see 72 FR 26890).
2. Section 114(e)(1) and (2) of the Medicare, Medicaid, and SCHIP
Extension Act of 2007
Section 114(e)(1) of MMSEA revises the base rate for RY 2008.
Specifically, section 114(e)(1) of Public Law 110-173 adds a new
subsection 1886(m)(2) of the Act, which provides that the base rate for
RY 2008 ``shall be the same as the base rate for discharges for the
hospital occurring during the rate year ending in 2007.'' In addition,
section 114(e)(2) of Public Law 110-173 indicates that section
1886(m)(2) of the Act ``shall not apply to discharges occurring on or
after July 1, 2007, and before April 1, 2008'' (that is, the first 9
months of RY 2008). We note that the statute uses the term ``base
rate,'' which is an undefined term in both section 1886(m) of the Act
and in 42 CFR Part 412, subpart O. As we explained in the LTCH PPS RY
2009 proposed rule (73 FR 5361), we are interpreting that term to be
the standard Federal rate because we believe Congress meant to
eliminate the 0.71 percent update from the RY 2008 standard Federal
rate. Under this interpretation, the standard Federal rate for RY 2008
would be the same as the standard Federal rate for RY 2007, that is,
the 0.71 percent update finalized in the RY 2008 LTCH PPS final rule
would be reversed.
We do not believe that the term ``base rate'' could refer to the
``unadjusted rate'' because the unadjusted rate for RY 2008 would be
updated by the current year's update factor in order to determine the
standard Federal rate for RY 2008 (that is, to determine the standard
Federal rate for any given rate year, the previous year's standard
Federal rate, referred herein as the ``unadjusted rate,'' is updated by
the current year's update factor) and doing so would result in the same
Federal rate for RY 2008 as was adopted in the RY 2008 final rule. To
illustrate mathematically, if ``base rate'' is interpreted to mean
``unadjusted rate,'' the ``unadjusted rate'' for RY 2008 ($38,086.04)
would be the same as the RY 2007 ``unadjusted rate'' ($38,086.04). The
RY 2008 ``unadjusted rate'' of $38,086.04 would subsequently be updated
by the 0.71 percent update factor finalized in the RY 2008 final rule,
resulting in a standard Federal rate for RY 2008 of $38,356.45, which
is the same standard Federal rate that was originally finalized in the
RY 2008 final rule. If we adopted this interpretation, we believe that
LTCH PPS payments would be unaffected by section 114(e)(1) of MMSEA.
Therefore, we believe that the term ``base rate'' used in section
114(e)(1) of MMSEA refers to the standard Federal rate. In subsequent
sections of this preamble, we are using the term standard Federal rate
instead of ``base rate'' when referencing the provision in section
114(e)(1) of MMSEA in order to avoid further confusion.
In the RY 2008 LTCH PPS final rule (72 FR 26890), we established a
standard Federal rate of $38,356.45 for the 2008 LTCH PPS rate year
that was based on the best available data and policies established in
that final rule. As discussed above, section 114(e) of MMSEA revises
the standard Federal rate for RY 2008 while specifying that this rate
``shall not apply to discharges occurring on or after July 1, 2007, and
before April 1, 2008'' (that is, the first 9 months of RY 2008).
Specifically, section 114(e)(1) of MMSEA provides that under the new
section 1886(m)(2) of the Act, the standard Federal rate for RY 2008
shall be the same as the standard Federal rate for RY 2007. The
standard Federal rate for RY 2007 was $38,086.04 (71 FR 27818). Thus,
to implement 114(e)(1) of the MMSEA, we are establishing through this
interim final rule with comment period that the RY 2008 standard
Federal rate is $38,086.04 (the same as the standard Federal rate for
2007). However, section 114(e)(2) of MMSEA specifically delays the
application of the revised RY 2008 standard Federal rate. Specifically,
section 114(e)(2) of MMSEA states that the revised RY 2008 standard
Federal rate ``shall not apply to discharges occurring on or after July
1, 2007, and before April 1, 2008.'' Therefore, LTCH payments for
discharges occurring on or after July 1, 2007 through March 31, 2008,
will continue to include an adjustment of 0.71 percent, that is,
payments are based on the standard Federal rate in Sec.
412.523(c)(3)(iii) as updated by 0.71 percent. Accordingly, for
discharges occurring on or after April 1, 2008 through June 30, 2008,
the revised RY 2008 standard Federal rate of $38,086.04 is applied,
while payments for discharges occurring from July 1, 2007 through March
31, 2008 are determined based on the standard Federal rate in Sec.
412.523(c)(3)(iii) increased by 0.71 percent that is, $38,356.45. We
are revising Sec. 412.523(c)(iv) to conform to the revision of the
standard Federal rate for RY 2008 under section 114(e) of MMSEA and to
specify how payments are determined during RY 2008.
Furthermore, section 114(e) of MMSEA affects the high cost outlier
fixed-loss amount currently in effect since it revises the standard
Federal rate for RY 2008 and the standard Federal rate is used to
determine the fixed-loss amount. Specifically, the current fixed-loss
amount was determined based on a standard Federal rate of $38,356.45.
(See the RY 2008 LTCH PPS final rule (72 FR 26896 through 26899), as
amended by the RY 2008 correction notice (72 FR 36613), for a
discussion of the methodology and data used to determine the current
fixed-loss amount for RY 2008.) Since for discharges occurring on or
after April 1, 2008 through June 30, 2008, payments will be based on
the revised RY 2008 standard Federal rate of $38,086.04, consistent
with the existing regulations at Sec. 412.525(a), in order to maintain
estimated total payments for high cost outlier cases at 8 percent of
the estimated total payments, we are revising the high cost outlier
fixed-loss amount. Accordingly, under the broad authority conferred on
the Secretary by section 123 of the BBRA, as amended by
[[Page 24877]]
section 307(b) of BIPA, to make appropriate adjustments to the LTCH
PPS, the revised high cost outlier fixed-loss amount effective for
discharges occurring on or after April 1, 2008 through June 30, 2008 is
$20,707. This revised fixed-loss amount was determined using the same
data and methodology presented in the RY 2008 LTCH PPS final rule and
takes into account the revised RY 2008 standard Federal rate as
provided for in the MMSEA (discussed above).
We note that in the RY 2009 LTCH PPS proposed rule (73 FR 5362),
consistent with our historical practice, we proposed to update the
standard Federal rate from the previous year (which is $38,086.04 due
to section 114(e) of MMSEA, as explained above) to determine the
proposed standard Federal rate for RY 2009.
III. Response to 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.
IV. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking and invite
public comment on a proposed rule in accordance with 5 U.S.C. section
553(b) of the Administrative Procedure Act (APA). In addition, section
1871(b)(1) provides that the Secretary shall provide for notice of the
proposed regulation in the Federal Register and a period of not less
than 60 days for public comment thereon. Section 1871(b)(2) provides
for an exception to the requirement that the Secretary provide for
notice of a proposed rulemaking and a period of not less than 60 days
for public comment. Specifically, section 1871(b)(2)(B) of the Act
provides an exception to these requirements when a law establishes a
specific deadline for the implementation of a provision and the
deadline is less than 150 days after the date of the enactment of the
statute in which the deadline is contained. Here, various provisions of
the MMSEA addressed in this interim final rule with comment period,
changed existing LTCH PPS policies (it affected the short-stay outlier
policy in Sec. 412.529 and revised the RY 2008 standard Federal rate.
Such changes were required to be implemented: (1) Beginning December
29, 2007 (section 114(c)(3) of MMSEA), and (2) were effective for RY
2008 on April 1, 2008 (section 114(e)(2) of MMSEA). Thus, the statute's
deadline for implementation of the MMSEA-related policies contained in
this interim final regulation was less than 150 days after the date of
the enactment of the statute in which the deadline was contained.
Therefore, under the authority of section 1871(b)(2)(B) of the Act, we
are waiving notice and comment procedures for the MMSEA policy changes
pertaining to the short-stay outlier policy, and the revised RY 2008
standard Federal rate.
Moreover, we also find good cause to waive the requirement for
publication of a notice of proposed rulemaking and comment on the
grounds that it is unnecessary, impracticable and contrary to the
public interest under the authority of 5 U.S.C. 553(b)(B). In general,
this interim final rule with comment period sets forth three
nondiscretionary provisions of the MMSEA with respect to short-stay
outliers and the rate for RY 2008. Therefore, we believe pursuing
notice and comment is unnecessary. Moreover, because that process would
prevent timely implementation of congressionally mandated policy
changes that are to be effective, as described previously in this
section, we believe notice and comment procedures are impracticable and
contrary to the public interest. In addition, notice and comment would
delay significantly the issuance of essential guidance to the public
which is necessary to assist them in making complex, time-sensitive
business decisions of significant financial consequence with respect to
their efforts to comply with section 114 of the MMSEA. Failure to
provide this guidance would impede such business decisions. This
regulation also makes three changes that are outside of the MMSEA
mandated changes discussed above. Specifically, this regulation makes
minor technical corrections to two incorrect cites that are embedded in
Sec. 412.529 and it revises the fixed-loss amount for the period April
1, 2008, through June 30, 2008. With respect to the technical
corrections of the two embedded cites in Sec. 412.529, notice and
comment is also unnecessary. The revisions do not represent changes to
our policy, and the public interest would, as a result, be best served
by the timely correction of these technical errors. A delay in the
applicability of the nonsubstantive changes would be contrary to the
public interest because the incorrect cites, if left in place, result
in confusion with respect to the calculation of cost-to-charge ratios.
We also find good cause to waive notice and comment procedures on the
revised fixed-loss amount for the period April 1, 2008, through June
30, 2008. The fixed-loss amount under the LTCH PPS is directly affected
by the statutorily mandated change to the standard Federal rate for RY
2008 cited above. The existing regulations limit estimated high cost
outlier payments under the LTCH PPS to 8 percent of total estimated
LTCH PPS payments. Accordingly, in order to assure that estimated high
cost outlier payments are maintained at this 8 percent target, in
conjunction with the Congressionally mandated change in the LTCH PPS
payments (that is, the standard Federal rate) that applies April 1,
2008, it would be contrary to the public interest if we did not make
this conforming change to the high cost outlier fixed-loss amount,
which lowers the fixed-loss amount for the period April 1, 2008,
through June 30, 2008.
Section 1871(e)(1)(A) of the Act provides that a substantive change
in regulations, manual instructions, interpretative rules, statements
of policy, or guidelines of general applicability under this title
shall not be applied (by extrapolation or otherwise) retroactively to
items and services furnished before the effective date of the change
unless the Secretary determines that (i) such retroactive application
is necessary to comply with statutory requirements; or (ii) failure to
apply the change retroactively would be contrary to the public
interest. As explained in the paragraph above, the MMSEA requires the
Secretary to implement various policy changes contemporaneously with
the enactment of the MMSEA on December 29, 2007. Therefore, under the
authority of section 1871(e)(1)(A)(i) of the Act, we are making the
provisions of this interim final rule with comment period that
implement section 114(c)(3) of MMSEA retroactive to December 29, 2007.
Additionally, as explained previously, the Secretary also finds that it
would be contrary to the public interest if these provisions were not
made effective on December 29, 2007, as explained above.
Also, as explained in the previous paragraph, section 114(e)(1) of
MMSEA requires the Secretary to revise standard Federal rate for RY
2008. However, the Secretary shall not apply such revised rate to
discharges occurring on or after July 1, 2007, and before April 1, 2008
(section 114(e)(2) of the Act). Consequently, the regulations
implementing section 114(e)(2) of MMSEA must be effective for a period
predating this interim final rule with comment period under the
authority of
[[Page 24878]]
section 1871(e)(1)(A)(i) of the Act (specifically, beginning April 1,
2008). As explained previously, it would also be contrary to the public
interest if these policies were not effective April 1, 2008.
In general, many of the provisions of the MMSEA implemented in this
interim final regulation are beneficial to LTCHs. If those MMSEA
provisions of this regulation were not effective under the timeframes
noted above, most LTCHs would be deprived the full benefit of these
provisions. With respect to the minor technical corrections to Sec.
412.529, failure to make these nonsubstantive changes applicable
beginning on December 29, 2007, would be contrary to the public
interest because of the confusion that could result from the incorrect
citations in Sec. 412.529. It is in the public interest to make the
correction to prevent confusion among long-term care hospitals
attempting to calculate cost-to-charge ratios. It is also contrary to
the public interest as described above to not make the change to the
fixed-loss amount applicable beginning April 1, 2008. Therefore, under
the authority of section 1871(e)(1)(A)(ii) of the Act, we are making
these changes effective under the timeframes noted above. For the same
reasons noted above, we find good cause under section 553(d)(3) of the
APA to waive the 30-day delay in the effective date.
V. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, and including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
Section 412.529(f)(4) states that for discharges occurring on or
after October 1, 2006, short-stay outlier payments are subject to
certain provisions. Specifically, Sec. 412.529(f)(4)(i) states that a
hospital may also request that its fiscal intermediary use a different
(higher or lower) cost-to-charge ratio and this request must be
approved by the appropriate CMS Regional Office.
The burden associated with this requirement is the time and effort
necessary for a hospital to collect supporting evidence for submission,
to draft the request for alternative cost-to-charge ratio, and to
submit the request along with the supporting evidence to the
appropriate CMS Regional Office. While this requirement is subject to
the PRA, the burden is currently approved under OMB control number
0938-1020 with an expiration date of June 30, 2010.
Table 3.--Estimated Annual Reporting and Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
Burden per
Regulation section(s) OMB Control Respondents Responses response Total annual
No. (hours) burden (hours)
----------------------------------------------------------------------------------------------------------------
Sec. 412.529(f)............... 0938-1020 18 18 8 144
-------------------------------------------------------------------------------
Total....................... .............. .............. .............. .............. 144
----------------------------------------------------------------------------------------------------------------
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
2. Mail copies to the address specified in the ADDRESSES section of
this proposed rule and to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Room 10235, New Executive
Office Building, Washington, DC 20503, Attn: Carolyn L. Raffaelli, CMS
Desk Officer, CMS-1493-IFC, Carolyn_L._Raffaelli@omb.eop.gov. Fax
(202) 395-6974.
VI. Regulatory Impact Analysis
We have examined the impacts of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on
Federalism, and the Congressional Review Act (5 U.S.C. 804 (2)).
Executive Order 12866 (as amended by Executive Order 13258) 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 1 year).
As stated in section II.C. of this preamble, section 114(e)(1) of
the Medicare, Medicaid, and SCHIP Extension Act of 2007 at the new
1886(m)(2) of the Act revises the standard Federal rate for RY 2008 by
providing that ``for discharges occurring during the rate year ending
in 2008 for a hospital, the base rate for such discharges for the
hospital shall be the same as the base rate for discharges for the
hospital occurring during the rate year ending in 2007'' (in other
words, the standard Federal rate for RY 2008 is the same as the
standard Federal rate for 2007). Thus, the standard Federal rate for RY
2008 is established in section II.C. of this interim final rule with
comment period at $38,086.04 (the same as the standard Federal rate for
2007). However, as we discussed in section II.D. of this interim final
rule with comment period, section 114(e)(2) of the MMSEA specifically
indicates that this rate ``shall not apply to discharges occurring on
or after July 1, 2007, and before April 1, 2008.'' Therefore, payments
for discharges occurring on or after July 1, 2007 through March 31,
2008, are based on $38,356.45 (as established in the RY 2008 LTCH PPS
final rule), while for discharges occurring on or after April 1, 2008
through June 30, 2008, payments are based on the RY 2008 standard
Federal rate which is $38,086.04. CMS' Office of the Actuary (OACT)
estimates a
[[Page 24879]]
projected decrease of approximately $5 million in estimated aggregate
LTCH PPS payments for RY 2008 resulting from the change in payments for
discharges occurring on or after April 1, 2008 through June 30, 2008.
Additionally, as discussed in section II.B. of this interim final rule
with comment period, section 114(c)(3) of MMSEA requires a 3-year
suspension of our implementation of the revision to the SSO policy at
Sec. 412.529(c)(3)(i) that was finalized in the RY 2008 final rule.
OACT estimates that the SSO provision included in the MMSEA will result
in a projected increase in estimated aggregate LTCH PPS payments for RY
2008 of $20 million. Consequently, we estimate the combined impact on
estimated aggregate LTCH PPS payments for RY 2008 from the MMSEA
provisions that are presented in this interim final rule with comment
period to be approximately $15 million. Because the combined
distributional effects and estimated changes to the Medicare program
payments would not be greater than $100 million, this interim final
rule with comment period would not be considered a major economic rule,
as defined in this section.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6.5 million to $31.5 million in any 1 year. (For further information,
see the Small Business Administration's regulation at 70 FR 72577,
December 6, 2005.) Individuals and States are not included in the
definition of a small entity. Because we lack data on individual
hospital receipts, we cannot determine the number of small proprietary
LTCHs. Therefore, we assume that all LTCHs are considered small
entities for the purpose of this impact discussion. Medicare FIs and
MACs are not considered to be small entities. As we discuss in detail
throughout the preamble of this interim final rule with comment period,
we believe that the provisions specified by the MMSEA presented in this
rule would result in an increase in estimated aggregate LTCH PPS
payments. Accordingly, the Secretary certifies that this interim final
rule with comment period would not have a significant economic impact
on a substantial number of small entities.
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 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area for Medicare payment regulations and has fewer than
100 beds. As stated above, implementing the provisions specified by the
MMSEA that are discussed in this rule would result in an increase in
estimated aggregate LTCH PPS payments; therefore, we believe this rule
will not have a significant impact on small rural hospitals.
Accordingly, the Secretary certifies that this interim final rule with
comment period would not have a significant economic impact on the
operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2008, that
threshold level is currently approximately $130 million. This interim
final rule with comment period would not mandate any requirements for
State, local, or tribal governments, nor would it result in
expenditures by the private sector of $130 million or more in any 1
year.
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. Since this regulation does not impose any costs on State
or local governments, the requirements of Executive Order 13132 are not
applicable.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 412
Administrative practice and procedure, Health facilities, Medicare,
Puerto Rico, Reporting and recordkeeping requirements.
0
For the reasons stated in the preamble of this interim final rule with
comment period, the Centers for Medicare & Medicaid Services is
amending 42 CFR Chapter IV as follows:
PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
0
1. The authority citation for part 412 is revised to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
2. In Sec. 412.1 paragraph (a)(4) is revised to read as follows:
Sec. 412.1 Scope of part.
(a) * * *
(4) This part implements the following regarding long-term care
hospitals--
(i) Section 123 of Public Law 106-113, which provides for the
establishment of a prospective payment system for the costs of
inpatient hospital services furnished to Medicare beneficiaries by
long-term care hospitals described in section 1886(d)(1)(B)(iv) of the
Act, for cost reporting periods beginning on or after October 1, 2002.
(ii) The provisions of section 307(b) of Public Law 106-554, which
state that the Secretary shall examine and may provide for appropriate
adjustments to the long-term care hospital prospective payment system,
including adjustments to diagnosis-related group (DRG) weights, area
wage adjustments, geographic reclassification, outlier adjustments,
updates, and disproportionate share adjustments consistent with section
1886(d)(5)(F) of the Act.
(iii) Section 114 of Public Law 110-173, which contains several
provisions regarding long-term care hospitals, including the--
(A) Amendment of section 1886 of the Act to add a new subsection
(m) that references section 123 of Public Law 106-113 and section
307(b) of Public Law 106-554 for the establishment and implementation
of a prospective payment system for payments under title XVIII for
inpatient hospital services furnished by a long-term care hospital
described in section 1886(d)(1)(B)(iv) of the Act.
(B) Revision of the standard Federal rate for RY 2008.
* * * * *
0
3. Section 412.500 is amended by revising paragraph (a) to read as
follows:
Sec. 412.500 Basis and scope of subpart.
(a) Basis. This subpart implements the following:
(1) Section 123 of Public Law 106-113, which provides for the
implementation of a prospective payment system for long-term care
hospitals described in section 1886(d)(1)(B)(iv) of the Act.
[[Page 24880]]
(2) Section 307 of Public Law 106-554, which states that the
Secretary shall examine and may provide for appropriate adjustments to
that system, including adjustments to DRG weights, area wage
adjustments, geographic reclassification, outliers, updates, and
disproportionate share adjustments consistent with section
1886(d)(5)(F) of the Act.
(3) Section 114 of Public Law 110-173, which contains several
provisions regarding long-term care hospitals, including the--
(i) Amendment of section 1886 of the Act to add a new subsection
(m) that references section 123 of Public Law 106-113 and section
307(b) of Public Law 106-554 for the establishment and implementation
of a prospective payment system for payments under title XVIII for
inpatient hospital services furnished by a long-term care hospital
described in section 1886(d)(1)(B)(iv) of the Act; and
(ii) Revision of the standard Federal rate for RY 2008.
* * * * *
0
4. Section 412.523 is amended by revising paragraph (c)(3)(iv) to read
as follows:
Sec. 412.523 Methodology for calculating the Federal prospective
payment rates.
* * * * *
(c) * * *
(3) * * *
(iv) For long-term care hospital prospective payment system rate
year beginning July 1, 2007 and ending June 30, 2008.
(A) The standard Federal rate for long-term care hospital
prospective payment system rate year beginning July 1, 2007 and ending
June 30, 2008 is the same as the standard Federal rate for the previous
long-term care hospital prospective payment system rate year. The
standard Federal rate is adjusted, as appropriate, as described in
paragraph (d) of this section.
(B) With respect to discharges occurring on or after July 1, 2007
and before April 1, 2008, payments are based on the standard Federal
rate in paragraph (c)(3)(iii) of this section updated by 0.71 percent.
* * * * *
0
5. Section 412.529 is amended by--
0
A. Revising paragraphs (c)(1) through (c)(3).
0
B. Redesignating paragraph (c)(4) as paragraph (f).
0
C. Revising newly redesignated paragraph (f).
Sec. 412.529 Special payment provision for short-stay outliers.
* * * * *
(c) * * *
(1) Discharges occurring before July 1, 2006. For discharges from
long-term care hospitals described under Sec. 412.23(e)(2)(i),
occurring before July 1, 2006, the LTCH prospective payment system
adjusted payment amount for a short-stay outlier case is the least of
the following amounts:
(i) One hundred and twenty (120) percent of the LTC-DRG specific
per diem amount determined under paragraph (d)(1) of this section.
(ii) One hundred and twenty (120) percent of the estimated cost of
the case determined under paragraph (d)(2) of this section.
(iii) The Federal prospective payment for the LTC-DRG determined
under paragraph (d)(3) of this section.
(2) Discharges occurring on or after July 1, 2006 and before July
1, 2007 and discharges occurring on or after December 29, 2007 and
before December 29, 2010. For discharges from long-term care hospitals
described under Sec. 412.23(e)(2)(i) occurring on or after July 1,
2006 and before July 1, 2007 and discharges occurring on or after
December 29, 2007 and before December 29, 2010, the LTCH prospective
payment system adjusted payment amount for a short-stay outlier case is
the least of the following amounts:
(i) One hundred and twenty (120) percent of the LTC-DRG specific
per diem amount determine
