Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2009, 46416-46462 [E8-17948]
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Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 413
[CMS–1534–F]
RIN 0938–AP11
Medicare Program; Prospective
Payment System and Consolidated
Billing for Skilled Nursing Facilities for
FY 2009
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
AGENCY:
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SUMMARY: This final rule updates the
payment rates used under the
prospective payment system (PPS) for
skilled nursing facilities (SNFs), for
fiscal year (FY) 2009. It also discusses
our ongoing analysis of nursing home
staff time measurement data collected in
the Staff Time and Resource Intensity
Verification (STRIVE) project. Finally,
this final rule makes technical
corrections in the regulations text with
respect to Medicare bad debt payments
to SNFs and the reference to the
definition of urban and rural as applied
to SNFs.
DATES: Effective Date: This final rule
becomes effective on October 1, 2008.
FOR FURTHER INFORMATION CONTACT:
Ellen Berry, (410) 786–4528 (for
information related to clinical issues).
Jeanette Kranacs, (410) 786–9385 (for
information related to the development
of the payment rates and case-mix
indexes).
Bill Ullman, (410) 786–5667 (for
information related to level of care
determinations, consolidated billing,
and general information).
SUPPLEMENTARY INFORMATION: To assist
readers in referencing sections
contained in this document, we are
providing the following Table of
Contents.
Table of Contents
I. Background
A. Current System for Payment of Skilled
Nursing Facility Services Under Part A
of the Medicare Program
B. Requirements of the Balanced Budget
Act of 1997 (BBA) for Updating the
Prospective Payment System for Skilled
Nursing Facilities
C. The Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of 1999
(BBRA)
D. The Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection
Act of 2000 (BIPA)
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E. The Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (MMA)
F. Skilled Nursing Facility Prospective
Payment—General Overview
1. Payment Provisions—Federal Rate
2. Rate Updates Using the Skilled Nursing
Facility Market Basket Index
II. Summary of the Provisions of the FY 2009
Proposed Rule
III. Analysis of and Response to Public
Comments on the FY 2009 Proposed
Rule
A. General Comments on the FY 2009
Proposed Rule
B. Annual Update of Payment Rates Under
the Prospective Payment System for
Skilled Nursing Facilities
1. Federal Prospective Payment System
a. Costs and Services Covered by the
Federal Rates
b. Methodology Used for the Calculation of
the Federal Rates
2. Case-Mix Adjustments
a. Background
b. Development of the Case-Mix Indexes
3. Wage Index Adjustment to Federal Rates
a. Clarification of New England Deemed
Counties
b. Multi-Campus Hospital Wage Index Data
4. Updates to the Federal Rates
5. Relationship of RUG–III Classification
System to Existing Skilled Nursing
Facility Level-of-Care Criteria
6. Example of Computation of Adjusted
PPS Rates and SNF Payment
7. Other Issues
a. Staff Time and Resource Intensity
Verification (STRIVE) Project
b. Minimum Data Set (MDS) 3.0
c. Integrated Post Acute Care Payment
8. Miscellaneous Technical Corrections
and Clarifications
a. Bad Debt Payments
b. Additional Clarifications
IV. The Skilled Nursing Facility Market
Basket Index
A. Use of the Skilled Nursing Facility
Market Basket Percentage
B. Market Basket Forecast Error
Adjustment
C. Federal Rate Update Factor
V. Consolidated Billing
VI. Application of the SNF PPS to SNF
Services Furnished by Swing-Bed
Hospitals
VII. Provisions of the Final Rule
VIII. Collection of Information Requirements
IX. Regulatory Impact Analysis
A. Overall Impact
B. Anticipated Effects
C. Alternatives Considered
D. Accounting Statement
E. Conclusion
Regulation Text
Addendum: FY 2009 CBSA-Based Wage
Index Tables (Tables 8 & 9)
Abbreviations
Because of the many terms to which
we refer by abbreviation in this final
rule, we are listing these abbreviations
and their corresponding terms in
alphabetical order below:
AIDS Acquired Immune Deficiency
Syndrome
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ARD Assessment Reference Date
BBA Balanced Budget Act of 1997, Public
Law 105–33
BBRA Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of 1999,
Public Law 106–113
BIPA Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act
of 2000, Public Law 106–554
CAH Critical Access Hospital
CARE Continuity Assessment Record and
Evaluation
CBSA Core-Based Statistical Area
CFR Code of Federal Regulations
CMI Case-Mix Index
CMS Centers for Medicare & Medicaid
Services
DRA Deficit Reduction Act of 2005, Public
Law 109–171
FQHC Federally Qualified Health Center
FR Federal Register
FY Fiscal Year
GAO Government Accountability Office
HAC Hospital-Acquired Condition
HCPCS Healthcare Common Procedure
Coding System
HIPPS Health Insurance Prospective
Payment System
HIT Health Information Technology
IFC Interim Final Rule with Comment
Period
IPPS Hospital Inpatient Prospective
Payment System
MDS Minimum Data Set
MMA Medicare Prescription Drug,
Improvement, and Modernization Act of
2003, Public Law 108–173
MSA Metropolitan Statistical Area
MS-DRG Medicare Severity DiagnosisRelated Group
NRST Non-Resident Specific Time
NTA Non-Therapy Ancillary
OBRA Omnibus Budget Reconciliation Act
of 1987, Public Law 100–203
OIG Office of the Inspector General
OMB Office of Management and Budget
OMRA Other Medicare Required
Assessment
PAC–PRD Post-Acute Care Payment Reform
Demonstration
POA Present on Admission
PPS Prospective Payment System
RAI Resident Assessment Instrument
RAP Resident Assessment Protocol
RAVEN Resident Assessment Validation
Entry
RFA Regulatory Flexibility Act, Public Law
96–354
RHC Rural Health Clinic
RIA Regulatory Impact Analysis
RUG–III Resource Utilization Groups,
Version III
RUG–53 Refined 53–Group RUG–III CaseMix Classification System
RST Resident Specific Time
SCHIP State Children’s Health Insurance
Program
SNF Skilled Nursing Facility
STM Staff Time Measurement
STRIVE Staff Time and Resource Intensity
Verification
TEP Technical Expert Panel
UMRA Unfunded Mandates Reform Act,
Public Law 104–4
VBP Value-Based Purchasing
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I. Background
On May 7, 2008, we published a
proposed rule (73 FR 25918) in the
Federal Register (hereafter referred to as
the FY 2009 proposed rule), setting forth
updates to the payment rates used under
the prospective payment system (PPS)
for skilled nursing facilities (SNFs), for
fiscal year (FY) 2009. Annual updates to
the prospective payment system rates
for skilled nursing facilities are required
by section 1888(e) of the Social Security
Act (the Act), as added by section 4432
of the Balanced Budget Act of 1997
(BBA), and amended by the Medicare,
Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (BBRA), the
Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection
Act of 2000 (BIPA), and the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA). Our
most recent annual update occurred in
the August 3, 2007 final rule (72 FR
43412) that set forth updates to the SNF
PPS payment rates for FY 2008. We
subsequently published two correction
notices (72 FR 55085, September 28,
2007, and 72 FR 67652, November 30,
2007) with respect to those payment rate
updates.
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A. Current System for Payment of
Skilled Nursing Facility Services Under
Part A of the Medicare Program
Section 4432 of the BBA amended
section 1888 of the Act to provide for
the implementation of a per diem PPS
for SNFs, covering all costs (routine,
ancillary, and capital-related) of covered
SNF services furnished to beneficiaries
under Part A of the Medicare program,
effective for cost reporting periods
beginning on or after July 1, 1998. In
this final rule, we are updating the per
diem payment rates for SNFs for FY
2009. Major elements of the SNF PPS
include:
• Rates. As discussed in section I.F.1.
of this final rule, we established per
diem Federal rates for urban and rural
areas using allowable costs from FY
1995 cost reports. These rates also
included an estimate of the cost of
services that, before July 1, 1998, had
been paid under Part B but were
furnished to Medicare beneficiaries in a
SNF during a Part A covered stay. We
update the rates annually using a SNF
market basket index, and we adjust
them by the hospital inpatient wage
index to account for geographic
variation in wages. We also apply a
case-mix adjustment to account for the
relative resource utilization of different
patient types. This adjustment utilizes a
refined, 53-group version of the
Resource Utilization Groups, version III
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(RUG-III) case-mix classification system,
based on information obtained from the
required resident assessments using the
Minimum Data Set (MDS) 2.0.
Additionally, as noted in sections I.C
through I.E of this final rule, the
payment rates at various times have also
reflected specific legislative provisions,
including section 101 of the BBRA,
sections 311, 312, and 314 of the BIPA,
and section 511 of the MMA.
• Transition. Under sections
1888(e)(1)(A) and (e)(11) of the Act, the
SNF PPS included an initial, threephase transition that blended a facilityspecific rate (reflecting the individual
facility’s historical cost experience) with
the Federal case-mix adjusted rate. The
transition extended through the
facility’s first three cost reporting
periods under the PPS, up to and
including the one that began in FY
2001. Thus, the SNF PPS is no longer
operating under the transition, as all
facilities have been paid at the full
Federal rate effective with cost reporting
periods beginning in FY 2002. As we
now base payments entirely on the
adjusted Federal per diem rates, we no
longer include adjustment factors
related to facility-specific rates for the
coming FY.
• Coverage. The establishment of the
SNF PPS did not change Medicare’s
fundamental requirements for SNF
coverage. However, because the RUG-III
classification is based, in part, on the
beneficiary’s need for skilled nursing
care and therapy, we have attempted,
where possible, to coordinate claims
review procedures with the output of
beneficiary assessment and RUG-III
classifying activities. This approach
includes an administrative presumption
that utilizes a beneficiary’s initial
classification in one of the upper 35
RUGs of the refined 53-group system to
assist in making certain SNF level of
care determinations, as discussed in
greater detail in section III.B.5 of this
final rule.
• Consolidated Billing. The SNF PPS
includes a consolidated billing
provision that requires a SNF to submit
consolidated Medicare bills to its fiscal
intermediary or Medicare
Administrative Contractor for almost all
of the services that its residents receive
during the course of a covered Part A
stay. In addition, this provision places
with the SNF the Medicare billing
responsibility for physical,
occupational, and speech-language
therapy that the resident receives during
a noncovered stay. The statute excludes
a small list of services from the
consolidated billing provision
(primarily those of physicians and
certain other types of practitioners),
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which remain separately billable under
Part B when furnished to a SNF’s Part
A resident. A more detailed discussion
of this provision appears in section V.
of this final rule.
• Application of the SNF PPS to SNF
services furnished by swing-bed
hospitals. Section 1883 of the Act
permits certain small, rural hospitals to
enter into a Medicare swing-bed
agreement, under which the hospital
can use its beds to provide either acute
or SNF care, as needed. For critical
access hospitals (CAHs), Part A pays on
a reasonable cost basis for SNF services
furnished under a swing-bed agreement.
However, in accordance with section
1888(e)(7) of the Act, these services are
paid under the SNF PPS when
furnished by non-CAH rural hospitals,
effective with cost reporting periods
beginning on or after July 1, 2002. A
more detailed discussion of this
provision appears in section VI. of this
final rule.
B. Requirements of the Balanced Budget
Act of 1997 (BBA) for Updating the
Prospective Payment System for Skilled
Nursing Facilities
Section 1888(e)(4)(H) of the Act
requires that we publish annually in the
Federal Register:
1. The unadjusted Federal per diem
rates to be applied to days of covered
SNF services furnished during the FY.
2. The case-mix classification system
to be applied with respect to these
services during the FY.
3. The factors to be applied in making
the area wage adjustment with respect
to these services.
In the July 30, 1999 final rule (64 FR
41670), we indicated that we would
announce any changes to the guidelines
for Medicare level of care
determinations related to modifications
in the RUG–III classification structure
(see section III.B.5 of this final rule for
a discussion of the relationship between
the case-mix classification system and
SNF level of care determinations).
Along with other revisions outlined
later in this preamble, this final rule
provides the annual updates to the
Federal rates as mandated by the Act.
C. The Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of
1999 (BBRA)
There were several provisions in the
BBRA that resulted in adjustments to
the SNF PPS. We described these
provisions in detail in the SNF PPS final
rule for FY 2001 (65 FR 46770, July 31,
2001). In particular, section 101(a) of the
BBRA provided for a temporary 20
percent increase in the per diem
adjusted payment rates for 15 specified
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RUG–III groups. In accordance with
section 101(c)(2) of the BBRA, this
temporary payment adjustment expired
on January 1, 2006, with the
implementation of case-mix refinements
(see section I.F.1. of this final rule). We
included further information on BBRA
provisions that affected the SNF PPS in
Program Memorandums A–99–53 and
A–99–61 (December 1999).
Also, section 103 of the BBRA
designated certain additional services
for exclusion from the consolidated
billing requirement, as discussed in
greater detail in section V. of this final
rule. Further, for swing-bed hospitals
with more than 49 (but less than 100)
beds, section 408 of the BBRA provided
for the repeal of certain statutory
restrictions on length of stay and
aggregate payment for patient days,
effective with the end of the SNF PPS
transition period described in section
1888(e)(2)(E) of the Act. In the SNF PPS
final rule for FY 2002 (66 FR 39562, July
31, 2001), we made conforming changes
to the regulations at § 413.114(d),
effective for services furnished in cost
reporting periods beginning on or after
July 1, 2002, to reflect section 408 of the
BBRA.
D. The Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection
Act of 2000 (BIPA)
The BIPA also included several
provisions that resulted in adjustments
to the SNF PPS. We described these
provisions in detail in the SNF PPS final
rule for FY 2002 (66 FR 39562, July 31,
2001). In particular:
• Section 203 of the BIPA exempted
CAH swing-beds from the SNF PPS. We
included further information on this
provision in Program Memorandum A–
01–09 (Change Request #1509), issued
January 16, 2001, which is available
online at https://www.cms.hhs.gov/
transmittals/downloads/a0109.pdf.
• Section 311 of the BIPA revised the
statutory update formula for the SNF
market basket, and also directed us to
conduct a study of alternative case-mix
classification systems for the SNF PPS.
In 2006, we submitted a report to the
Congress on this study, which is
available online at https://
www.cms.hhs.gov/SNFPPS/Downloads/
RC_2006_PC-PPSSNF.pdf.
• Section 312 of the BIPA provided
for a temporary increase of 16.66
percent in the nursing component of the
case-mix adjusted Federal rate for
services furnished on or after April 1,
2001, and before October 1, 2002;
accordingly, this add-on is no longer in
effect. This section also directed the
Government Accountability Office
(GAO) to conduct an audit of SNF
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nursing staff ratios and submit a report
to the Congress on whether the
temporary increase in the nursing
component should be continued. The
report (GAO–03–176), which GAO
issued in November 2002, is available
online at https://www.gao.gov/
new.items/d03176.pdf.
• Section 313 of the BIPA repealed
the consolidated billing requirement for
services (other than physical,
occupational, and speech-language
therapy) furnished to SNF residents
during noncovered stays, effective
January 1, 2001. (A more detailed
discussion of this provision appears in
section V. of this final rule.)
• Section 314 of the BIPA corrected
an anomaly involving three of the RUGs
that the BBRA had designated to receive
the temporary payment adjustment
discussed above in section I.C. of this
final rule. (As noted previously, in
accordance with section 101(c)(2) of the
BBRA, this temporary payment
adjustment expired upon the
implementation of case-mix refinements
on January 1, 2006.)
• Section 315 of the BIPA authorized
us to establish a geographic
reclassification procedure that is
specific to SNFs, but only after
collecting the data necessary to establish
a SNF wage index that is based on wage
data from nursing homes. To date, this
has proven to be infeasible due to the
volatility of existing SNF wage data and
the significant amount of resources that
would be required to improve the
quality of that data.
We included further information on
several of the BIPA provisions in
Program Memorandum A–01–08
(Change Request #1510), issued January
16, 2001, which is available online at
https://www.cms.hhs.gov/transmittals/
downloads/a0108.pdf.
E. The Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (MMA)
The MMA included a provision that
resulted in further adjustment to the
SNF PPS. Specifically, section 511 of
the MMA amended section 1888(e)(12)
of the Act, to provide for a temporary
increase of 128 percent in the PPS per
diem payment for any SNF resident
with Acquired Immune Deficiency
Syndrome (AIDS), effective with
services furnished on or after October 1,
2004. This special AIDS add-on was to
remain in effect until ‘‘* * * such date
as the Secretary certifies that there is an
appropriate adjustment in the case mix
* * *.’’ The AIDS add-on is also
discussed in Program Transmittal #160
(Change Request #3291), issued on April
30, 2004, which is available online at
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https://www.cms.hhs.gov/transmittals/
downloads/r160cp.pdf. As discussed in
the SNF PPS final rule for FY 2006 (70
FR 45028, August 4, 2005), the
implementation of the case-mix
refinements did not address the
certification regarding the AIDS add-on,
allowing the temporary add-on payment
created by section 511 of the MMA to
continue in effect.
For the limited number of SNF
residents that qualify for the AIDS addon, implementation of this provision
results in a significant increase in
payment. For example, using FY 2006
data, we identified less than 2,700 SNF
residents with a diagnosis code of 042
(Human Immunodeficiency Virus (HIV)
Infection). For FY 2009, an urban
facility with a resident with AIDS in
RUG group ‘‘SSA’’ would have a casemix adjusted payment of $259.40 (see
Table 4) before the application of the
MMA adjustment. After an increase of
128 percent, this urban facility would
receive a case-mix adjusted payment of
$591.43.
In addition, section 410 of the MMA
contained a provision that excluded
from consolidated billing certain
practitioner and other services
furnished to SNF residents by rural
health clinics (RHCs) and Federally
Qualified Health Centers (FQHCs).
(Further information on this provision
appears in section V. of this final rule.)
F. Skilled Nursing Facility Prospective
Payment—General Overview
We implemented the Medicare SNF
PPS effective with cost reporting
periods beginning on or after July 1,
1998. This PPS pays SNFs through
prospective, case-mix adjusted per diem
payment rates applicable to all covered
SNF services. These payment rates
cover all costs of furnishing covered
skilled nursing services (routine,
ancillary, and capital-related costs)
other than costs associated with
approved educational activities.
Covered SNF services include posthospital services for which benefits are
provided under Part A and all items and
services that, before July 1, 1998, had
been paid under Part B (other than
physician and certain other services
specifically excluded under the BBA)
but furnished to Medicare beneficiaries
in a SNF during a covered Part A stay.
A comprehensive discussion of these
provisions appears in the May 12, 1998
interim final rule (63 FR 26252).
1. Payment Provisions—Federal Rate
The PPS uses per diem Federal
payment rates based on mean SNF costs
in a base year updated for inflation to
the first effective period of the PPS. We
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developed the Federal payment rates
using allowable costs from hospitalbased and freestanding SNF cost reports
for reporting periods beginning in FY
1995. The data used in developing the
Federal rates also incorporated an
estimate of the amounts that would be
payable under Part B for covered SNF
services furnished to individuals during
the course of a covered Part A stay in
a SNF.
In developing the rates for the initial
period, we updated costs to the first
effective year of the PPS (the 15-month
period beginning July 1, 1998) using a
SNF market basket index, and then
standardized for the costs of facility
differences in case-mix and for
geographic variations in wages. In
compiling the database used to compute
the Federal payment rates, we excluded
those providers that received new
provider exemptions from the routine
cost limits, as well as costs related to
payments for exceptions to the routine
cost limits. Using the formula that the
BBA prescribed, we set the Federal rates
at a level equal to the weighted mean of
freestanding costs plus 50 percent of the
difference between the freestanding
mean and weighted mean of all SNF
costs (hospital-based and freestanding)
combined. We computed and applied
separately the payment rates for
facilities located in urban and rural
areas. In addition, we adjusted the
portion of the Federal rate attributable
to wage-related costs by a wage index.
The Federal rate also incorporates
adjustments to account for facility casemix, using a classification system that
accounts for the relative resource
utilization of different patient types.
The RUG–III classification system uses
beneficiary assessment data from the
Minimum Data Set (MDS) completed by
SNFs to assign beneficiaries to one of 53
RUG–III groups. The original RUG–III
case-mix classification system included
44 groups. However, under refinements
that became effective on January 1,
2006, we added nine new groups—
comprising a new Rehabilitation plus
Extensive Services category—at the top
of the RUG hierarchy. The May 12, 1998
interim final rule (63 FR 26252)
included a detailed description of the
original 44-group RUG–III case-mix
classification system. A comprehensive
description of the refined 53-group
RUG–III case-mix classification system
(RUG–53) appeared in the proposed rule
for FY 2006 (70 FR 29070, May 19,
2005) and in the final rule for FY 2006
(70 FR 45026, August 4, 2005).
Further, in accordance with section
1888(e)(4)(E)(ii)(IV) of the Act, the
Federal rates in this final rule reflect an
update to the rates that we published in
the final rule for FY 2008 (72 FR 43412,
August 3, 2007) and the associated
correction notices published on
September 28, 2007 (72 FR 55085) and
November 30, 2007 (72 FR 67652), equal
to the full change in the SNF market
basket index. A more detailed
discussion of the SNF market basket
index and related issues appears in
sections I.F.2. and IV. of this final rule.
2. Rate Updates Using the Skilled
Nursing Facility Market Basket Index
Section 1888(e)(5) of the Act requires
us to establish a SNF market basket
index that reflects changes over time in
the prices of an appropriate mix of
goods and services included in covered
SNF services. We use the SNF market
basket index to update the Federal rates
on an annual basis. In the FY 2008 SNF
PPS final rule (72 FR 43425 through
43430, August 3, 2007), we revised and
rebased the market basket, which
included updating the base year from
FY 1997 to FY 2004. The proposed FY
2009 market basket increase was 3.1
percent. The final FY 2009 market
basket increase is 3.4 percent.
In addition, as explained in the SNF
PPS final rule for FY 2004 (66 FR 46058,
August 4, 2003) and in section IV.B. of
this final rule, the annual update of the
payment rates includes, as appropriate,
an adjustment to account for market
basket forecast error. As described in the
SNF PPS final rule for FY 2008 (72 FR
43425, August 3, 2007), the threshold
percentage that serves to trigger an
adjustment to account for market basket
forecast error is 0.5 percentage point
effective for FY 2008 and subsequent
years. This adjustment takes into
account the forecast error from the most
recently available FY for which there is
final data, and applies whenever the
difference between the forecasted and
actual change in the market basket
exceeds a 0.5 percentage point
threshold. For FY 2007 (the most
recently available FY for which there is
final data), the estimated increase in the
market basket index was 3.1 percentage
points, while the actual increase was 3.1
percentage points, resulting in no
difference. Accordingly, as the
difference between the estimated and
actual amount of change does not
exceed the 0.5 percentage point
threshold, the payment rates for FY
2009 do not include a forecast error
adjustment. Table 1 below shows the
forecasted and actual market basket
amounts for FY 2007.
TABLE 1—DIFFERENCE BETWEEN THE FORECASTED AND ACTUAL MARKET BASKET INCREASES FOR FY 2007
Index
Forecasted
FY 2007 increase *
Actual
FY 2007 increase **
FY 2007
difference ***
SNF ..............................................................................................
3.1
3.1
0.0
* Published in Federal Register; based on second quarter 2006 Global Insight Inc. forecast (97 index).
** Based on the second quarter 2008 Global Insight forecast (97 index).
*** The FY 2007 forecast error correction will be applied to the FY 2009 PPS update recommendations. Any forecast error less than 0.5 percentage points will not be reflected in the update recommendation.
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Requirements for Issuance of
Regulations
Section 902 of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA)
amended section 1871(a) of the Act and
requires the Secretary, in consultation
with the Director of the Office of
Management and Budget, to establish
and publish timelines for the
publication of Medicare final
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regulations based on the previous
publication of a Medicare proposed or
interim final regulation. Section 902 of
the MMA also states that the timelines
for these regulations may vary but shall
not exceed 3 years after publication of
the preceding proposed or interim final
regulation except under exceptional
circumstances.
This final rule finalizes provisions
proposed in the May 7, 2008 proposed
rule. In addition, this final rule has been
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published within the 3-year time limit
imposed by section 902 of the MMA.
Therefore, we believe that the final rule
is in accordance with the Congress’
intent to ensure timely publication of
final regulations.
II. Summary of the Provisions of the FY
2009 Proposed Rule
In the FY 2009 proposed rule (73 FR
25918, May 7, 2008), we proposed to
update the Federal payment rates used
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under the SNF PPS for FY 2009. We also
proposed to recalibrate the case-mix
indexes so that they would more
accurately reflect parity in expenditures
related to the implementation of casemix refinements in January 2006. In
addition, we discussed our ongoing
analysis of nursing home staff time
measurement data collected in the Staff
Time and Resource Intensity
Verification (STRIVE) project. We also
proposed to make technical corrections
in the regulations text with respect to
Medicare bad debt payments to SNFs
and the reference to the definition of
urban and rural as applied to SNFs.
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III. Analysis and Response to Public
Comments on the FY 2009 Proposed
Rule
In response to the publication of the
FY 2009 proposed rule, we received
over 100 timely items of correspondence
from the public. The comments
originated primarily from various trade
associations and major organizations,
but also from individual providers,
corporations, government agencies, and
private citizens.
Brief summaries of each proposed
provision, a summary of the public
comments that we received, and our
responses to the comments appear
below.
A. General Comments on the FY 2009
Proposed Rule
In addition to the comments that we
received on the proposed rule’s
discussion of specific aspects of the SNF
PPS (which we address later in this final
rule), commenters also submitted the
following, more general observations on
the payment system.
Comment: We received comments
similar to those discussed previously in
the SNF PPS final rule for FY 2008 (72
FR 43415 through 43416, August 3,
2007) regarding the need to address
certain perceived inadequacies in
payment for non-therapy ancillary
(NTA) services, including those services
relating to the provision of ventilator
care in SNFs. We also received
comments recommending that we
continue to monitor ongoing research,
and that we consider alternative casemix methodologies such as the recent
MedPAC proposal that appears on the
MedPAC Web site (see https://
www.MedPAC.gov.)
Response: As we noted in the August
3, 2007 FY 2008 final rule (72 FR
43416), we anticipate that the findings
from our current Staff Time and
Resource Intensity Verification
(STRIVE) project will assist us in
reviewing and addressing these types of
concerns. However, as noted in our
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December 2006 Report to Congress, our
analysis of NTA utilization has been
hindered by a lack of data. All Medicare
institutional providers except SNFs are
required to submit detailed line item
billing that shows each ancillary service
furnished during a Part A stay. SNFs
currently submit summary data that
shows total dollar amounts for each
ancillary service category, such as
radiology and pharmacy. As we
examine the data collected through the
STRIVE project, we will be evaluating
whether our current data requirements
are sufficient to move forward with
additional program enhancements. We
will also consider whether collecting
more detailed claims information on a
regular basis will allow us to establish
more accurate payment rates for NTA
services.
We also believe it is important to
monitor ongoing research activities, and
work with all stakeholders, including
MedPAC, to identify opportunities for
future program enhancements. At the
same time, we note that the SNF PPS
reimbursement structure will be
completely examined as part of the Post
Acute Care Payment Reform
Demonstration (PAC–PRD) project.
Under this major CMS initiative, we
intend to analyze the payment structure
currently used for all post-acute care
providers, and establish an integrated
payment model centered on beneficiary
needs and service utilization (including
the use of non-therapy ancillaries)
across settings. In considering future
changes to the SNF PPS, it will be
important to evaluate how shorter term
enhancements contribute to our
integrated post acute care strategy.
A discussion of the public comments
that we received on the STRIVE project
itself appears in section III.B.7.a of this
final rule.
B. Annual Update of Payment Rates
Under the Prospective Payment System
for Skilled Nursing Facilities
1. Federal Prospective Payment System
This final rule sets forth a schedule of
Federal prospective payment rates
applicable to Medicare Part A SNF
services beginning October 1, 2008. The
schedule incorporates per diem Federal
rates that provide Part A payment for all
costs of services furnished to a
beneficiary in a SNF during a Medicarecovered stay.
a. Costs and Services Covered by the
Federal Rates
In accordance with section
1888(e)(2)(B) of the Act, the Federal
rates apply to all costs (routine,
ancillary, and capital-related) of covered
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SNF services other than costs associated
with approved educational activities as
defined in § 413.85. Under section
1888(e)(2)(A)(i) of the Act, covered SNF
services include post-hospital SNF
services for which benefits are provided
under Part A (the hospital insurance
program), as well as all items and
services (other than those services
excluded by statute) that, before July 1,
1998, were paid under Part B (the
supplementary medical insurance
program) but furnished to Medicare
beneficiaries in a SNF during a Part A
covered stay. (These excluded service
categories are discussed in greater detail
in section V.B.2. of the May 12, 1998
interim final rule (63 FR 26295 through
26297).)
b. Methodology Used for the Calculation
of the Federal Rates
The FY 2009 rates reflect an update
using the full amount of the latest
market basket index. The FY 2009
market basket increase factor is 3.4
percent. A complete description of the
multi-step process used to calculate
Federal rates initially appeared in the
May 12, 1998 interim final rule (63 FR
26252), as further revised in subsequent
rules. We note that in accordance with
section 101(c)(2) of the BBRA, the
previous temporary increases in the per
diem adjusted payment rates for certain
designated RUGs, as specified in section
101(a) of the BBRA and section 314 of
the BIPA, are no longer in effect due to
the implementation of case-mix
refinements as of January 1, 2006.
However, the temporary increase of 128
percent in the per diem adjusted
payment rates for SNF residents with
AIDS, enacted by section 511 of the
MMA (and discussed previously in
section I.E of this final rule), remains in
effect.
We used the SNF market basket to
adjust each per diem component of the
Federal rates forward to reflect cost
increases occurring between the
midpoint of the Federal FY beginning
October 1, 2007, and ending September
30, 2008, and the midpoint of the
Federal FY beginning October 1, 2008,
and ending September 30, 2009, to
which the payment rates apply. In
accordance with section
1888(e)(4)(E)(ii)(IV) of the Act, we
update the payment rates for FY 2009 by
a factor equal to the full market basket
index percentage increase. (We note,
that the FY 2009 President’s Budget
includes a provision that would
establish a zero percent market basket
update for FYs 2009 through 2011,
contingent upon the enactment of
legislation by the Congress to adopt that
proposal.) We further adjust the rates by
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a wage index budget neutrality factor,
described later in this section. Tables 2
and 3 below reflect the updated
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components of the unadjusted Federal
rates for FY 2009.
TABLE 2—FY 2009 UNADJUSTED FEDERAL RATE PER DIEM—URBAN
Rate component
Nursing—
case-mix
Therapy—
case-mix
Therapy—noncase-mix
Non-case-mix
Per diem amount .............................................................................................
$151.74
$114.30
$15.05
$77.44
TABLE 3—FY 2009 UNADJUSTED FEDERAL RATE PER DIEM—RURAL
Rate component
Nursing—
case-mix
Therapy—
case-mix
Therapy—noncase-mix
Non-case-mix
Per diem amount .............................................................................................
$144.97
$131.80
$16.08
$78.87
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2. Case-Mix Adjustments
a. Background
Section 1888(e)(4)(G)(i) of the Act
requires the Secretary to make an
adjustment to account for case-mix. The
statute specifies that the adjustment is
to reflect both a resident classification
system that the Secretary establishes to
account for the relative resource use of
different patient types, as well as
resident assessment and other data that
the Secretary considers appropriate. In
first implementing the SNF PPS (we
refer readers to the May 12, 1998
interim final rule (63 FR 26252)), we
developed the Resource Utilization
Groups, version III (RUG–III) case-mix
classification system, which tied the
amount of payment to resident resource
use in combination with resident
characteristic information. Staff time
measurement (STM) studies conducted
in 1990, 1995, and 1997 provided
information on resource use (time spent
by staff members on residents) and
resident characteristics that enabled us
not only to establish RUG–III, but also
to create case-mix indexes.
Under the BBA, each update of the
SNF PPS payment rates must include
the case-mix classification methodology
applicable for the coming Federal FY.
As indicated previously in section I.F.1,
the payment rates set forth in this final
rule reflect the use of the refined RUG–
53 system that we discussed in detail in
the proposed and final rules for FY
2006.
When we introduced a new refined
RUG–53 classification model in January
2006, we used our authority for
establishing an appropriate case-mix
structure to construct a new case-mix
index for use with the RUG–53 model.
We calculated the new case-mix indexes
using the STM study data that were
collected during the 1990s and
originally used in creating the SNF PPS
case-mix classification system and case-
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mix indexes. As explained in greater
detail below, we then performed a
budget neutrality analysis, and
increased the RUG–53 case-mix weights
so that overall payments under the two
models (the original 44-group model
and the refined 53-group model) could
be expected to be equal.
In the following section of this final
rule, we discuss the adjustments to the
RUG–53 case-mix indexes structure that
we proposed in our FY 2009 proposed
rule.
b. Development of the Case-Mix Indexes
In the August 4, 2005 SNF PPS final
rule for FY 2006 (70 FR 45032), we
introduced two refinements to the SNF
PPS: (1) Nine new case-mix groups to
account for the care needs of
beneficiaries requiring both extensive
medical and rehabilitation services; and
(2) an adjustment to reflect the
variability in the use of non-therapy
ancillaries (NTAs). We made these
refinements by using the resource
minute data from the original 44-group
model to create a new set of relative
weights, or case-mix indexes (CMIs), for
the refined 53-group model. We then
compared the two models to ensure that
estimated total payments under the 53group model would not be greater or
less than the aggregate payments that
would have been made under the 44group model.
As explained in the FY 2009 proposed
rule (73 FR 25923), in conducting this
analysis for the FY 2006 final rule, we
used FY 2001 claims data (the most
current data available at the time) to
compare estimated aggregate payments
under the 44-group and 53-group
models. For each model, we multiplied
the estimated case-mix adjusted base
rate by the number of Medicare paid
days attributable to each RUG group.
For the 44-group RUG model, we used
the actual 2001 paid claims data to
determine the distribution of paid days.
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For the 53-group RUG model, we did
not have any actual claims data, and
had to estimate the number of days that
would be distributed across the 53
groups. Using our estimated
distribution, we found that payments
under the new 53-group model would
be lower than under the original 44group model. As the purpose of the
refinement was to better allocate
payment and not to reduce overall
expenditures, we adjusted the new CMIs
upward by applying a parity adjustment
factor. In this way, we attempted to
ensure that the RUG–III model was
expanded in a budget-neutral manner
(that is, one that would not cause any
change in the overall level of
expenditures). We then applied a
second adjustment to the CMIs to
account for the variability in the use of
NTA services. These two adjustments
resulted in a combined 17.9 percent
increase in the CMIs that went into
effect on January 1, 2006, as part of the
case-mix refinement implementation. A
detailed description of the methods
used to make these two adjustments to
the CMIs appears in the SNF PPS
proposed rule for FY 2006 (70 FR 29077
through 29078, May 19, 2005).
While we took all reasonable
precautions to establish an appropriate,
budget neutral conversion from the 44group to the 53-group classification
model, we recognized that the analyses
we used to compute the budget
neutrality adjustment were based solely
on estimated data and that actual
experience could be significantly
different. For this reason, in the SNF
PPS final rule for FY 2006 (70 FR 45031,
August 4, 2005), we committed to
monitoring the accuracy and
effectiveness of the CMIs used in the 53group model.
In monitoring recent claims data, we
observed that actual expenditures were
significantly higher than what we had
projected using the 2001 data. In
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particular, the proportion of dollars paid
for patients who grouped in the highest
paying RUG categories—combining high
therapy with extensive services—greatly
exceeded our projections. To determine
why expenditures so greatly exceeded
our projections, we repeated the budget
neutrality analyses described earlier in
this section (and as described in the FY
2006 SNF PPS proposed rule (70 FR
29077 through 29078, May 19, 2005)),
using actual 2006 claims data to
determine the distribution of paid days
across the 53-group RUG model. For this
analysis, we compared simulated
calendar year (CY) 2006 payments (the
first time period for which RUG–53 paid
days data were available) to payments
that would have been made under the
RUG–44 model. As the introduction of
the 9 new groups had not required a
change to the MDS used to classify
beneficiaries, we also had all of the data
necessary to calculate accurately the
distribution of paid days under the
RUG–44 model. We found that
estimated payments under the RUG–44
model were still higher than under the
RUG–53 model, but that our original
projections had overstated the
difference. In addition, as the original
budget neutrality adjustment was
overestimated, the percentage
adjustment made to the case-mix
weights (after the budget neutrality
adjustment was made) to account for
NTA variability also needed to be
recalibrated. Using the actual 2006 data,
we found that the adjustment necessary
to achieve budget neutrality was an
increase of 9.68 percent rather than the
17.9 percent increase that had been in
effect since January 2006. Thus, from
January 2006 to the present, using the
17.9 percent adjustment to the case-mix
weights resulted in overpayments far
exceeding our intention of paying in a
budget neutral manner. For FY 2009, we
estimate the amount of overpayment at
$780 million.
Although the 2001 data were the best
source available at the time the FY 2006
refinements were introduced, the
distribution of paid days, a key
component in adjusting the RUG–53
case-mix weights, was based solely on
estimated utilization. The 2006 data
provide a more recent and a more
accurate source of RUG–53 utilization
based on actual utilization, and are an
appropriate source to use for case-mix
adjustment.
We received a number of comments
questioning our legal authority to
recalibrate the case-mix weights, as well
as questions on the methodology used to
make the case-mix weight adjustments.
In the following discussion, we present
the concerns that the commenters raised
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on this issue, and we also take the
opportunity to address a number of
misconceptions about the proposed
recalibration that the comments
reflected. However, in view of the
potential ramifications of this proposal
and the complexity of the issues
involved, we believe that it would be
prudent to take additional time to
evaluate the proposal in order to further
consider consequences that may result
from it. Accordingly, we are not
proceeding with the proposed
recalibration at this time, pending
further analysis. We note that as we
continue to evaluate this issue, we fully
expect to implement such an adjustment
in the future. The comments that we
received on this issue, and our
responses, are as follows:
Comment: Several commenters stated
that the need for the recalibration arose
because CMS initial projections of
utilization under the refined case-mix
system proved to be inaccurate once
actual utilization data became available.
They then asserted that in view of this,
the proposed recalibration represents a
‘‘forecast error adjustment’’ that is not
covered under the statutory authority to
provide for an appropriate adjustment to
account for case mix (section
1888(e)(4)(G)(i) of the Act).
Response: It would be incorrect to
characterize the proposed recalibration
as a ‘‘forecast error adjustment,’’ as that
term refers solely to an adjustment that
compensates for an inaccurate forecast
of the annual inflation factor in the SNF
market basket. By contrast, the proposed
recalibration would serve to ensure that
the 2006 case-mix refinements are
implemented as intended. As such, it
would be integral to the process of
providing ‘‘* * * for an appropriate
adjustment to account for case mix’’ that
is based upon appropriate data in
accordance with section 1888(e)(4)(G)(i)
of the Act.
Comment: A number of comments
included references to the discussion of
the 2006 case-mix refinements in the
SNF PPS proposed rule for FY 2006 (70
FR 29079, May 19, 2005), in which we
explained that we were ‘‘* * *
advancing these proposed changes
under our authority in section 101(a) of
the BBRA to establish case-mix
refinements, and that the changes we
are hereby proposing will represent the
final adjustments made under this
authority’’ (emphasis added). The
commenters stated that this earlier
description of the 2006 case-mix
refinements as ‘‘final’’ effectively
precludes CMS from proceeding with a
recalibration, which they characterized
as representing a further refinement.
Similarly, several commenters also
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questioned our authority to recalibrate
the case-mix system prior to the
completion of the STRIVE staff time
measurement (STM) project. In
addition, several commenters
questioned whether CMS has the
authority to impose a budget neutrality
requirement on the introduction of a
new classification model.
Response: We wish to clarify that the
actual ‘‘refinement’’ that we proposed
and implemented in the FY 2006
rulemaking cycle consisted of our
introduction of the 9 new Rehabilitation
plus Extensive Services groups at the
top of the previous, 44-group RUG
hierarchy, along with the adjustment
recognizing the variability of NTA use,
which together fulfilled the provisions
of section 101(a) of the BBRA. The
accompanying adjustment to the casemix indexes (CMIs) was merely a
vehicle through which we implemented
that refinement. Rather than
representing a new or further
‘‘refinement’’ in itself, the proposed
recalibration merely serves to ensure
that we correctly accomplish a revision
to the CMIs that accompanied the FY
2006 case-mix refinements.
In the FY 2006 final rule (70 FR
45033, August 4, 2005), we addressed
the introduction of the refinements
within the broader context of ensuring
payment accuracy and beneficiary
access to care. We pointed out that
* * * this incremental change is part of this
ongoing process that will also include update
activities such as the upcoming STM study
and investigation of potential alternatives to
the RUG system itself. However, the
commitment to long term analysis and
refinement should not preclude the
introduction of more immediate
methodological and policy updates.
Finally, the budget neutrality factor
was applied to the unadjusted RUG 53
case-mix weights that were introduced
in January 2006. As stated above, our
initial analyses indicated that payments
would be lower under the RUG–53
model. As the purpose of the refinement
was to reallocate payments, and not to
reduce expenditures, we believe that
increasing the case-mix weights to
equalize payments under the two
models is an appropriate exercise of our
broad authority to establish an
appropriate case-mix system. We further
note that the FY 2006 refinement to the
case-mix classification system using
adjusted CMIs was implemented
through the rulemaking process, and we
received no comments on the use of a
budget neutrality adjustment at that
time.
We also received a number of
technical comments on the potential
effects of implementing this
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recalibration proposal on beneficiaries,
providers, and the overall economy.
These comments are summarized below.
Comment: Some commenters opposed
the recalibration of the budget neutrality
adjustment, believing that the change to
the case-mix weights would ‘‘take back’’
payments to providers that had
increased due to changes in case mix
between 2001 and 2006. Specifically,
several commenters expressed the belief
that by proposing to recalibrate the casemix weights put into place for the RUG–
53 system, we are incorrectly
identifying increased payments related
to treatment of higher case-mix patients
with an overpayment related to the use
of an incorrect budget neutrality
adjustment factor applied in January
2006. Another commenter believed that
the proposed recalibration could be
more accurately calculated using either
2005 data or a combination of 2005 and
2006 data.
Response: We agree that, on average,
the case-mix indexes for current SNF
patients are higher than they were in
2001. However, we believe this concern
erroneously equates the introduction of
a new classification model with the
regular SNF PPS annual update process.
Normally, changes in case mix are
accommodated as the classification
model identifies changes in case mix
and assigns the appropriate RUG group.
Actual payments will typically vary
from projections since case-mix
changes, which occur for a variety of
reasons, cannot be anticipated in an
impact analysis.
However, in January 2006, we did
more than just update the payment
rates; we introduced a new
classification model, the RUG–53 casemix system. As discussed above, the
purpose of this refined model was to
redistribute payments across the 53
groups while maintaining the same total
expenditure level that we would have
incurred had we retained the original
44-group RUG model.
In testing the two models, we used
2001 data because it was the best data
we had available, and found that using
the raw weights calculated for the RUG–
53 model, we could expect aggregate
payments to decrease as a result of
introducing the refinement. To prevent
this expected reduction in Medicare
expenditures, we applied an adjustment
to the RUG–53 case-mix weights as
described in detail earlier in this
section. Later analysis using actual 2006
data showed that, rather than achieving
budget neutrality between the two
models, expenditures were significantly
higher than intended. For FY 2009,
expenditures are estimated to be $780
million higher than intended.
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We do not agree that updating our
analysis using CY 2006 data captured
payments related to increased case mix
rather than establishing budget
neutrality between the two models.
First, by using 2006 data to estimate
expenditures under both models, the
same case-mix changes are incorporated
into the estimated expenditure levels for
RUG–44 as well as for RUG–53. Second,
we believe it is appropriate to
standardize the new model for the time
period in which it is being introduced.
The only reason we used 2001 data in
the original calculation is that it was the
best data available at the time. The CY
2006 data allowed us to calibrate the
RUG–53 model more precisely for its
first year of operation.
One commenter recommended using
alternative time periods in calculating
the budget neutrality adjustment.
However, while it might be possible to
use CY 2005 rather than CY 2006 data,
using CY 2005 data still requires us to
use a projection of the distributional
shift to the nine new groups in the
RUG–53 group model. We also looked at
a second recommended alternative,
which involved comparing quarterly
data periods directly before and after
implementation of the RUG–53 model;
that is, October through December 2005
for the RUG–44 model and January
through March 2006 for the RUG–53
model. Our preliminary analyses
confirmed that the proposed
recalibration would serve to ensure that
the 2006 case-mix refinements are
implemented as actually intended.
However, we believe that using actual
utilization data for CY 2006 is more
accurate, since actual case mix during
the calibration year is the basis for
computing the case-mix adjustment. We
have determined that using the 2006
data instead of the suggested
alternatives are the most appropriate to
adopt.
It is important to stress that this
recalibration was not designed to adjust
for aggregate payment differences that
result from changes in the coding or
classification of residents not reflective
of real changes in case mix; that is, casemix creep. Monitoring the changes in
case mix under RUG–53 over the years
since RUG–53 has been in place is part
of a longer-term effort. If we find that a
pattern of coding or the classification of
residents does not reflect real changes in
case mix over several years, we would
propose a documentation and coding
adjustment, pursuant to § 1888(e)(4)(F)
of the Act. By contrast, the original
application of a budget neutrality factor
and the recalibration of that factor
discussed in this final rule represented
the mechanism that we used to establish
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the appropriate baseline for
expenditures under the refined
classification model (that is, the change
from RUG–44 to RUG–53).
Comment: Some commenters argued
against implementing the proposed
recalibration, asserting that it is
important to maintain Medicare SNF
payments at their current levels in order
to cross-subsidize what they
characterized as inadequate payment
rates for nursing facilities under the
Medicaid program. Other commenters
asserted that a shift in patients from
Inpatient Rehabilitation Facilities (IRFs)
to SNFs results in savings to the
Medicare Trust Fund and that the
current SNF spending levels are needed
to treat the types of patients SNFs are
now receiving.
Response: Even though we are not
moving forward at this time with the
proposed recalibration, we wish to be
clear that it is not the appropriate role
of the Medicare SNF benefit to crosssubsidize nursing home payments made
under the Medicaid program. We note
that MedPAC stated it is inappropriate
for the Medicare program’s SNF
payments to cross-subsidize Medicaid
nursing facility rates. Specifically, on
page 152 of its March 2008 Report to the
Congress on Medicare Payment Policy
(which is available online at https://
medpac.gov/documents/
Mar08_EntireReport.pdf), MedPAC
stated:
There are several reasons why Medicare
cross-subsidization is not advisable policy for
the Medicare program. On average, Medicare
payments accounted for 21 percent of
revenues to freestanding SNFs in 2006. As a
result, the policy would use a minority of
Medicare payments to subsidize a majority of
Medicaid payments. If Medicare were to pay
still higher rates, facilities with high shares
of Medicare payments—presumably the
facilities that need revenues the least—would
receive the most in subsidies from the higher
Medicare payments. In other words, the
subsidy would be poorly targeted. Given the
variation among states in the level and
method of nursing home payments, the
impact of the subsidy would be highly
variable; in states where Medicaid payments
were adequate, it would have no positive
impact. In addition, increasing Medicare’s
payment rates could encourage states to
reduce Medicaid payments further and, in
turn, result in pressure to again raise
Medicare rates. It could also encourage
providers to select patients based on payer
source or to rehospitalize dual-eligible
patients so that they qualified for a Medicarecovered, and higher payment, stay.
We agree with MedPAC and,
therefore, do not agree with the
commenters that cited cross-subsidizing
Medicaid as a justification for
maintaining Medicare SNF payments at
any specific level.
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Regarding the comments about a shift
of patients from IRFs to SNFs producing
savings to the Medicare Trust Fund, and
the need to maintain current SNF
spending levels to treat the types of
patients SNFs are now receiving, we
note that a basic principle of the SNF
PPS is to pay appropriately for the
services provided. CMS data are
consistent with the commenters’
assertions that many patients formerly
being treated in IRFs are now being
treated in SNFs or Home Health
Agencies. In fact, the CY 2006
distribution used to recalibrate the casemix adjustments indicates that there are
more patients in the 9 new RUGs than
we originally anticipated and patients
shifting from IRFs could be a partial
explanation.
Patients who shifted to SNFs or other
settings from IRFs due to ‘‘75 Percent
Rule’’ compliance percentage
requirements represent a population
that was not appropriate for IRF care,
and CMS payments for those IRF stays
would represent an overpayment to
IRFs. For those former IRF patients who
are appropriate for SNF care, we must
pay the appropriate rate for the SNF
services provided, and cannot use a
reduction in IRF overpayments as a
reason to increase payments under the
SNF PPS. SNF patients with more
intensive therapy and extensive service
needs will be paid the higher amounts
associated with the 9 new groups. While
we are not moving forward with the
proposed recalibration at this time, it is
still important to understand that
recalibrating CMIs would not change the
relative nature of higher payments for
patients using more staff resources and
services.
Comment: One commenter claimed
that CMS did not make the data and
analysis underlying the proposed
recalibration of the budget neutrality
adjustment publicly available.
Response: We do not agree with the
commenter’s assertion. The
methodology used to establish the casemix adjustments is the same as that
described in detail in the FY 2006 SNF
PPS proposed rule (70 FR 29077
through 29078, May 19, 2005). In
addition, the data used to calculate the
adjustments are publicly available on
the CMS Web site. We used the CY 2006
days of service (available in the
downloads section of our Web site at
https://www.cms.hhs.gov/SNFPPS/
02_Highlights.asp#TopOfPage) for both
the RUG–44 and RUG–53 systems. We
multiplied the CY 2006 days of service
by the FY 2008 unadjusted Federal per
diem payment rate components (72 FR
43416) multiplied by the unadjusted
case-mix indexes (available in the
Downloads section of our Web site at
https://www.cms.hhs.gov/SNFPPS/
09_RUGRefinement.asp#TopOfPage) to
establish expenditures under the RUG–
44 and RUG–53 systems. The budget
neutrality adjustment was determined
as the percentage increase necessary for
the nursing CMIs to generate estimated
expenditure levels under the RUG–53
system that were equal to estimated
expenditure levels under the RUG–44
system. We then calculated a second
adjustment factor to increase the
baseline by an amount that served to
offset the variability in NTA utilization.
As discussed above, we are confident
that we employed the correct
methodology to evaluate the accuracy
with which we implemented the 2006
refinements. However, in view of the
widespread industry concern that a
recalibration could potentially have
adverse effects on beneficiaries and SNF
clinical staff, and could negatively affect
the quality of SNF care, we believe that
the most prudent course is to continue
to evaluate these issues carefully before
proceeding. Thus, we will not proceed
with the recalibration for FY 2009, but
will instead continue to evaluate the
data, and further consider consequences
that may result from the recalibration.
We note that as we continue to evaluate
this issue, we fully expect to implement
such an adjustment in the future.
Therefore, for FY 2009, the case-mix
indexes shown in Tables 4 and 5 below
remain the same as those adopted in FY
2006. As always, we list the case-mix
adjusted payment rates separately for
urban and rural SNFs, with the
corresponding case-mix values. We note
that these tables do not reflect the AIDS
add-on enacted by section 511 of the
MMA, which we apply only after
making all other adjustments (wage and
case-mix).
TABLE 4—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—URBAN
pwalker on PROD1PC71 with RULES3
RUG–III category
Nursing index
RUX ............................
RUL ............................
RVX ............................
RVL ............................
RHX ............................
RHL ............................
RMX ...........................
RML ............................
RLX ............................
RUC ...........................
RUB ............................
RUA ............................
RVC ............................
RVB ............................
RVA ............................
RHC ...........................
RHB ............................
RHA ............................
RMC ...........................
RMB ...........................
RMA ...........................
RLB ............................
RLA ............................
SE3 ............................
SE2 ............................
SE1 ............................
SSC ............................
VerDate Aug<31>2005
17:33 Aug 07, 2008
1.9
1.4
1.54
1.33
1.42
1.37
1.93
1.68
1.31
1.28
0.99
0.84
1.23
1.09
0.82
1.22
1.11
0.94
1.15
1.09
1.04
1.14
0.85
1.86
1.49
1.26
1.23
Jkt 214001
Therapy index
2.25
2.25
1.41
1.41
0.94
0.94
0.77
0.77
0.43
2.25
2.25
2.25
1.41
1.41
1.41
0.94
0.94
0.94
0.77
0.77
0.77
0.43
0.43
........................
........................
........................
........................
PO 00000
Frm 00010
Nursing
component
Therapy
component
288.31
212.44
233.68
201.81
215.47
207.88
292.86
254.92
198.78
194.23
150.22
127.46
186.64
165.40
124.43
185.12
168.43
142.64
174.50
165.40
157.81
172.98
128.98
282.24
226.09
191.19
186.64
Fmt 4701
Non-case mix
therapy comp
Non-case mix
component
257.18
257.18
161.16
161.16
107.44
107.44
88.01
88.01
49.15
257.18
257.18
257.18
161.16
161.16
161.16
107.44
107.44
107.44
88.01
88.01
88.01
49.15
49.15
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
15.05
15.05
15.05
15.05
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
Sfmt 4700
E:\FR\FM\08AUR3.SGM
08AUR3
Total rate
622.93
547.06
472.28
440.41
400.35
392.76
458.31
420.37
325.37
528.85
484.84
462.08
425.24
404.00
363.03
370.00
353.31
327.52
339.95
330.85
323.26
299.57
255.57
374.73
318.58
283.68
279.13
46425
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
TABLE 4—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—URBAN—Continued
RUG–III category
Nursing index
SSB ............................
SSA ............................
CC2 ............................
CC1 ............................
CB2 ............................
CB1 ............................
CA2 ............................
CA1 ............................
IB2 ..............................
IB1 ..............................
IA2 ..............................
IA1 ..............................
BB2 ............................
BB1 ............................
BA2 ............................
BA1 ............................
PE2 ............................
PE1 ............................
PD2 ............................
PD1 ............................
PC2 ............................
PC1 ............................
PB2 ............................
PB1 ............................
PA2 ............................
PA1 ............................
1.13
1.1
1.22
1.06
0.98
0.91
0.9
0.8
0.74
0.72
0.61
0.56
0.73
0.69
0.6
0.52
0.85
0.82
0.78
0.76
0.71
0.69
0.55
0.54
0.53
0.5
Therapy index
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
Nursing
component
Therapy
component
171.47
166.91
185.12
160.84
148.71
138.08
136.57
121.39
112.29
109.25
92.56
84.97
110.77
104.70
91.04
78.90
128.98
124.43
118.36
115.32
107.74
104.70
83.46
81.94
80.42
75.87
Non-case mix
therapy comp
Non-case mix
component
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
15.05
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
77.44
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
Total rate
263.96
259.40
277.61
253.33
241.20
230.57
229.06
213.88
204.78
201.74
185.05
177.46
203.26
197.19
183.53
171.39
221.47
216.92
210.85
207.81
200.23
197.19
175.95
174.43
172.91
168.36
TABLE 5—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—RURAL
pwalker on PROD1PC71 with RULES3
RUG–III category
Nursing index
RUX ............................
RUL ............................
RVX ............................
RVL ............................
RHX ............................
RHL ............................
RMX ...........................
RML ............................
RLX ............................
RUC ...........................
RUB ............................
RUA ............................
RVC ............................
RVB ............................
RVA ............................
RHC ...........................
RHB ............................
RHA ............................
RMC ...........................
RMB ...........................
RMA ...........................
RLB ............................
RLA ............................
SE3 ............................
SE2 ............................
SE1 ............................
SSC ............................
SSB ............................
SSA ............................
CC2 ............................
CC1 ............................
CB2 ............................
CB1 ............................
CA2 ............................
CA1 ............................
IB2 ..............................
IB1 ..............................
IA2 ..............................
VerDate Aug<31>2005
17:33 Aug 07, 2008
1.9
1.4
1.54
1.33
1.42
1.37
1.93
1.68
1.31
1.28
0.99
0.84
1.23
1.09
0.82
1.22
1.11
0.94
1.15
1.09
1.04
1.14
0.85
1.86
1.49
1.26
1.23
1.13
1.1
1.22
1.06
0.98
0.91
0.9
0.8
0.74
0.72
0.61
Jkt 214001
Therapy index
2.25
2.25
1.41
1.41
0.94
0.94
0.77
0.77
0.43
2.25
2.25
2.25
1.41
1.41
1.41
0.94
0.94
0.94
0.77
0.77
0.77
0.43
0.43
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
PO 00000
Frm 00011
Nursing
component
Therapy
component
275.44
202.96
223.25
192.81
205.86
198.61
279.79
243.55
189.91
185.56
143.52
121.77
178.31
158.02
118.88
176.86
160.92
136.27
166.72
158.02
150.77
165.27
123.22
269.64
216.01
182.66
178.31
163.82
159.47
176.86
153.67
142.07
131.92
130.47
115.98
107.28
104.38
88.43
Fmt 4701
Non-case mix
therapy comp
Non-case mix
component
296.55
296.55
185.84
185.84
123.89
123.89
101.49
101.49
56.67
296.55
296.55
296.55
185.84
185.84
185.84
123.89
123.89
123.89
101.49
101.49
101.49
56.67
56.67
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
Sfmt 4700
E:\FR\FM\08AUR3.SGM
08AUR3
Total rate
650.86
578.38
487.96
457.52
408.62
401.37
460.15
423.91
325.45
560.98
518.94
497.19
443.02
422.73
383.59
379.62
363.68
339.03
347.08
338.38
331.13
300.81
258.76
364.59
310.96
277.61
273.26
258.77
254.42
271.81
248.62
237.02
226.87
225.42
210.93
202.23
199.33
183.38
46426
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
TABLE 5—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—RURAL—Continued
RUG–III category
Nursing index
IA1 ..............................
BB2 ............................
BB1 ............................
BA2 ............................
BA1 ............................
PE2 ............................
PE1 ............................
PD2 ............................
PD1 ............................
PC2 ............................
PC1 ............................
PB2 ............................
PB1 ............................
PA2 ............................
PA1 ............................
0.56
0.73
0.69
0.6
0.52
0.85
0.82
0.78
0.76
0.71
0.69
0.55
0.54
0.53
0.5
Therapy index
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
pwalker on PROD1PC71 with RULES3
3. Wage Index Adjustment to Federal
Rates
Section 1888(e)(4)(G)(ii) of the Act
requires that we adjust the Federal rates
to account for differences in area wage
levels, using a wage index that we find
appropriate. Since the inception of a
PPS for SNFs, we have used hospital
wage data in developing a wage index
to be applied to SNFs. In the FY 2009
proposed rule, we proposed to continue
that practice, as we continue to believe
that in the absence of SNF-specific wage
data, using the hospital inpatient wage
index is appropriate and reasonable for
the SNF PPS. As explained in the SNF
PPS update notice for FY 2005 (69 FR
45786, July 30, 2004), the SNF PPS does
not use the hospital area wage index’s
occupational mix adjustment, as this
adjustment serves specifically to define
the occupational categories more clearly
in a hospital setting; moreover, the
collection of the occupational wage data
also excludes any wage data related to
SNFs. Therefore, we believe that using
the updated wage data exclusive of the
occupational mix adjustment continues
to be appropriate for SNF payments.
Since the implementation of the SNF
PPS, as set forth in § 413.337(a)(1)(ii), a
SNF’s wage index is determined based
on the location of the SNF in an urban
or rural area as defined in § 413.333 and
further defined in § 412.62(f)(1)(ii) and
§ 412.62(f)(1)(iii) as urban and rural
areas, respectively. In the SNF PPS final
rule for FY 2006 (70 FR 45041, August
4, 2005), we adopted revised labor
market area definitions based on CoreBased Statistical Area (CBSAs). At the
time, we noted that these were the same
labor market area definitions (based on
OMB’s new CBSA designations)
implemented under the Hospital
Inpatient Prospective Payment System
(IPPS) at § 412.64(b), which were
VerDate Aug<31>2005
17:33 Aug 07, 2008
Jkt 214001
Nursing
component
Therapy
component
81.18
105.83
100.03
86.98
75.38
123.22
118.88
113.08
110.18
102.93
100.03
79.73
78.28
76.83
72.49
Frm 00012
Fmt 4701
Non-case mix
component
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
16.08
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
78.87
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
effective for those hospitals beginning
October 1, 2004, as discussed in the
IPPS final rule for FY 2005 (69 FR at
49026 through 49034, August 11, 2004).
In the FY 2006 SNF PPS final rule, we
inadvertently omitted making a
conforming regulation text change to
§ 413.333. However, this did not alter
our decision to follow the IPPS
definitions of urban and rural. In the FY
2009 proposed rule, we proposed to
make that conforming regulation text
change to revise the definitions for rural
and urban areas effective for services
provided on or after October 1, 2005, to
reference the regulations at
§§ 412.64(b)(1)(ii)(A) through (C),
consistent with the revision under the
IPPS.
Comments on the wage index
adjustment to the Federal rates, and our
responses to those comments, are as
follows:
Comment: A few commenters
recommended that CMS develop a SNFspecific wage index. Other commenters
asked CMS to consider adopting certain
wage index policies in use under the
acute IPPS, because SNFs compete in a
similar labor pool as acute care
hospitals. The commenters indicated
that adoption of these measures under
the SNF PPS would allow SNFs to
benefit from the IPPS geographic
reclassification and/or rural floor
policies. (A discussion of the IPPS
reclassification and floor policies
appears on our Web site at https://
www.cms.hhs.gov/AcuteInpatientPPS/
01_overview.asp.)
Response: The regulations that govern
the SNF PPS currently do not provide
a mechanism for allowing providers to
seek geographic reclassification.
Moreover, as we have explained in the
past (most recently, in the SNF PPS
final rule for FY 2008 (72 FR 43420,
August 3, 2007)), while section 315 of
PO 00000
Non-case mix
therapy comp
Sfmt 4700
Total rate
176.13
200.78
194.98
181.93
170.33
218.17
213.83
208.03
205.13
197.88
194.98
174.68
173.23
171.78
167.44
the Benefits Improvement and
Protection Act of 2000 (BIPA, Pub. L.
106–554) does authorize us to establish
such a reclassification methodology
under the SNF PPS, it additionally
stipulates that such reclassification
cannot be implemented until we have
collected the data necessary to establish
a SNF-specific wage index. This, in
turn, has proven to be infeasible due to
‘‘* * * the volatility of existing SNF
wage data and the significant amount of
resources that would be required to
improve the quality of that data’’ (72 FR
43420, August 3, 2007). We continue to
believe that these factors make it
unlikely for such an approach to yield
meaningful improvements in our ability
to determine facility payments, or to
justify the significant increase in
administrative resources as well as
burden on providers that this type of
data collection would involve.
In addition, we reviewed the
Medicare Payment Advisory
Commission’s (MedPAC) wage index
recommendations as discussed in
MedPAC’s June 2007 report entitled,
‘‘Report to Congress: Promoting Greater
Efficiency in Medicare.’’ Although some
commenters recommend that we adopt
the IPPS wage index policies such as
reclassification and floor policies, we
note that MedPAC’s June 2007 report to
Congress recommends that Congress
‘‘repeal the existing hospital wage index
statute, including reclassification and
exceptions, and give the Secretary
authority to establish new wage index
systems.’’ We believe that adopting the
IPPS wage index policies (such as
reclassification or floor) would not be
prudent at this time, because MedPAC
suggests that the reclassification and
exception policies in the IPPS wage
index alters the wage index values for
one-third of IPPS hospitals. In addition,
MedPAC found that the exceptions may
E:\FR\FM\08AUR3.SGM
08AUR3
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
pwalker on PROD1PC71 with RULES3
lead to anomalies in the wage index. By
adopting the IPPS reclassification and
exceptions at this time, the SNF PPS
wage index could become vulnerable to
problems similar to those that MedPAC
identified in their June 2007 Report to
Congress. However, we will continue to
review and consider MedPAC’s
recommendations on a refined or
alternative wage index methodology for
the SNF PPS in future years.
We also note that section 106(b)(2) of
the Medicare Improvements and
Extension Act (MIEA) of 2006 (which is
Division B of the Tax Relief and Health
Care Act (TRHCA) of 2006, Pub. L. 109–
432, collectively referred to as ‘‘MIEA–
TRHCA’’) required the Secretary of
Health and Human Services, taking into
account MedPAC’s recommendations on
the Medicare wage index classification
system, to include in the FY 2009 IPPS
proposed rule one or more proposals to
revise the wage index adjustment
applied under section 1886(d)(3)(E) of
the Act for purposes of the IPPS. To
assist CMS in meeting the requirements
of section 106(b)(2) of MIEA–TRHCA, in
February 2008, CMS awarded a Task
Order under its Expedited Research and
Demonstration Contract, to Acumen,
LLC. A comparison of the current IPPS
wage index and MedPAC’s are
presented in the FY 2009 IPPS final
rule. We plan to continue monitoring
wage index research efforts and the
impact or influence they may have for
the SNF PPS wage index. Moreover, in
light of all of the pending research and
review of wage index issues in general,
we believe that it would be premature
at this time to initiate review of a SNFspecific wage index.
a. Clarification of New England Deemed
Counties
As we discussed in the SNF PPS
proposed rule for FY 2009 (73 FR 25926,
May 7, 2008), two New England
counties (Litchfield County, CT and
Merrimack County, NH) are deemed to
be urban areas under section 601(g) of
the Social Security Amendments of
1983, yet are considered rural by OMB
definitions. We proposed to clarify the
treatment of these two New England
counties in accordance with the FY
2008 IPPS final rule with comment
period (72 FR 47337 through 47338,
August 22, 2007), which revised the
regulations at § 412.64(b)(1)(ii)(B) so
that these counties are no longer
considered urban, effective for
discharges occurring on or after October
1, 2007. A more detailed discussion of
this proposal appears in the SNF PPS
proposed rule for FY 2009 (73 FR
24926). We note that all post-acute care
payment systems are clarifying this
VerDate Aug<31>2005
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Jkt 214001
policy to create consistency among
provider types.
We received no comments on this
aspect of the proposed rule, and we are
proceeding with this technical
clarification as proposed with no
change. Therefore, we are treating these
counties as rural for purposes of the
SNF PPS.
b. Multi-Campus Hospital Wage Index
Data
When a multi-campus hospital has
campuses located in different labor
market areas, wages and hours are
reported in a single labor market area
(CBSA) even though the hospital’s staff
is working at campuses in more than
one labor market area. Currently, the
wage data are reported in the labor
market area of the hospital campus
associated with the provider number. In
the SNF PPS proposed rule for FY 2009
(73 FR 25926, May 7, 2008), we
described a change in the way wage data
for multi-campus hospitals located in
different labor market areas (CBSAs)
would be apportioned, consistent with a
FY 2008 change in the IPPS rule. The
IPPS wage data used to determine the
FY 2009 SNF wage index apportion the
wage data for multi-campus hospitals
located in different labor market areas
(CBSAs) to each CBSA where the
campuses are located (72 FR 47317
through 47320, August 22, 2007). A
more detailed discussion of this
proposal appears in the SNF PPS
proposed rule for FY 2009 (73 FR
24926). Adopting the treatment of this
data is consistent with our use of the
pre-floor, pre-reclassified IPPS wage
data.
We received no comments on this
aspect of the proposed rule and we are
adopting this policy as proposed
without change, consistent with our use
of IPPS wage data. The wage index
values for the FY 2009 SNF PPS are
affected by this policy.
We also proposed to continue using
the same methodology discussed in the
SNF PPS final rule for FY 2008 (72 FR
43423) to address those geographic areas
in which there are no hospitals and,
thus, no hospital wage index data on
which to base the calculation of the FY
2009 SNF PPS wage index. For rural
geographic areas that do not have
hospitals and, therefore, lack hospital
wage data on which to base an area
wage adjustment, we would use the
average wage index from all contiguous
CBSAs as a reasonable proxy. This
methodology is used to construct the
wage index for rural Massachusetts.
However, as discussed in the FY 2008
SNF PPS proposed rule (72 FR 25539,
May 4, 2007), we are not applying this
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46427
methodology to rural Puerto Rico due to
the distinct economic circumstances
that exist there, but instead will
continue using the most recent wage
index previously available for that area.
For urban areas without specific
hospital wage index data, we will use
the average wage indexes of all of the
urban areas within the State to serve as
a reasonable proxy for the wage index
of that urban CBSA. The only urban area
without wage index data available is
CBSA (25980) Hinesville-Fort Stewart,
GA. We received no comments on this
issue and are finalizing our policy as
proposed without change.
In summary, in the FY 2009 proposed
rule, we proposed to use the FY 2009
wage index data (collected from cost
reports submitted by hospitals for cost
reporting periods beginning during FY
2005) to adjust SNF PPS payments
beginning October 1, 2008. We also
proposed to continue our policies for
calculating wage indexes for areas
without hospitals. We are finalizing the
wage index and associated policies as
proposed for the SNF PPS for FY 2009
without change. These data reflect the
multi-campus and New England
deemed counties policies discussed
above.
To calculate the SNF PPS wage index
adjustment, we apply the wage index
adjustment to the labor-related portion
of the Federal rate, which is 69.783
percent of the total rate. This percentage
reflects the labor-related relative
importance for FY 2009, using the
revised and rebased FY 2004-based
market basket. The labor-related relative
importance for FY 2008 was 70.249, as
shown in Table 11. We calculate the
labor-related relative importance from
the SNF market basket, and it
approximates the labor-related portion
of the total costs after taking into
account historical and projected price
changes between the base year and FY
2009. The price proxies that move the
different cost categories in the market
basket do not necessarily change at the
same rate, and the relative importance
captures these changes. Accordingly,
the relative importance figure more
closely reflects the cost share weights
for FY 2009 than the base year weights
from the SNF market basket.
We calculate the labor-related relative
importance for FY 2009 in four steps.
First, we compute the FY 2009 price
index level for the total market basket
and each cost category of the market
basket. Second, we calculate a ratio for
each cost category by dividing the FY
2009 price index level for that cost
category by the total market basket price
index level. Third, we determine the FY
2009 relative importance for each cost
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Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
category by multiplying this ratio by the
base year (FY 2004) weight. Finally, we
add the FY 2009 relative importance for
each of the labor-related cost categories
(wages and salaries, employee benefits,
non-medical professional fees, laborintensive services, and a portion of
capital-related expenses) to produce the
FY 2009 labor-related relative
importance. Tables 6 and 7 below show
the Federal rates by labor-related and
non-labor-related components.
TABLE 6—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT
RUG–III category
Labor
portion
Total rate
RUX .............................................................................................................................................
RUL ..............................................................................................................................................
RVX ..............................................................................................................................................
RVL ..............................................................................................................................................
RHX .............................................................................................................................................
RHL ..............................................................................................................................................
RMX .............................................................................................................................................
RML .............................................................................................................................................
RLX ..............................................................................................................................................
RUC .............................................................................................................................................
RUB .............................................................................................................................................
RUA .............................................................................................................................................
RVC .............................................................................................................................................
RVB ..............................................................................................................................................
RVA ..............................................................................................................................................
RHC .............................................................................................................................................
RHB .............................................................................................................................................
RHA .............................................................................................................................................
RMC .............................................................................................................................................
RMB .............................................................................................................................................
RMA .............................................................................................................................................
RLB ..............................................................................................................................................
RLA ..............................................................................................................................................
SE3 ..............................................................................................................................................
SE2 ..............................................................................................................................................
SE1 ..............................................................................................................................................
SSC ..............................................................................................................................................
SSB ..............................................................................................................................................
SSA ..............................................................................................................................................
CC2 ..............................................................................................................................................
CC1 ..............................................................................................................................................
CB2 ..............................................................................................................................................
CB1 ..............................................................................................................................................
CA2 ..............................................................................................................................................
CA1 ..............................................................................................................................................
IB2 ................................................................................................................................................
IB1 ................................................................................................................................................
IA2 ................................................................................................................................................
IA1 ................................................................................................................................................
BB2 ..............................................................................................................................................
BB1 ..............................................................................................................................................
BA2 ..............................................................................................................................................
BA1 ..............................................................................................................................................
PE2 ..............................................................................................................................................
PE1 ..............................................................................................................................................
PD2 ..............................................................................................................................................
PD1 ..............................................................................................................................................
PC2 ..............................................................................................................................................
PC1 ..............................................................................................................................................
PB2 ..............................................................................................................................................
PB1 ..............................................................................................................................................
PA2 ..............................................................................................................................................
PA1 ..............................................................................................................................................
622.93
547.06
472.28
440.41
400.35
392.76
458.31
420.37
325.37
528.85
484.84
462.08
425.24
404.00
363.03
370.00
353.31
327.52
339.95
330.85
323.26
299.57
255.57
374.73
318.58
283.68
279.13
263.96
259.40
277.61
253.33
241.20
230.57
229.06
213.88
204.78
201.74
185.05
177.46
203.26
197.19
183.53
171.39
221.47
216.92
210.85
207.81
200.23
197.19
175.95
174.43
172.91
168.36
434.70
381.75
329.57
307.33
279.38
274.08
319.82
293.35
227.05
369.05
338.34
322.45
296.75
281.92
253.33
258.20
246.55
228.55
237.23
230.88
225.58
209.05
178.34
261.50
222.31
197.96
194.79
184.20
181.02
193.72
176.78
168.32
160.90
159.84
149.25
142.90
140.78
129.13
123.84
141.84
137.61
128.07
119.60
154.55
151.37
147.14
145.02
139.73
137.61
122.78
121.72
120.66
117.49
Non-labor
portion
188.23
165.31
142.71
133.08
120.97
118.68
138.49
127.02
98.32
159.80
146.50
139.63
128.49
122.08
109.70
111.80
106.76
98.97
102.72
99.97
97.68
90.52
77.23
113.23
96.27
85.72
84.34
79.76
78.38
83.89
76.55
72.88
69.67
69.22
64.63
61.88
60.96
55.92
53.62
61.42
59.58
55.46
51.79
66.92
65.55
63.71
62.79
60.50
59.58
53.17
52.71
52.25
50.87
TABLE 7—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT
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RUG–III category
RUX
RUL
RVX
RVL
RHX
RHL
Total rate
.................................................................................................................................................................
..................................................................................................................................................................
..................................................................................................................................................................
..................................................................................................................................................................
.................................................................................................................................................................
..................................................................................................................................................................
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E:\FR\FM\08AUR3.SGM
650.86
578.38
487.96
457.52
408.62
401.37
08AUR3
Labor
portion
454.19
403.61
340.51
319.27
285.15
280.09
Non-labor
portion
196.67
174.77
147.45
138.25
123.47
121.28
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
46429
TABLE 7—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT—
Continued
RUG–III category
Total rate
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RMX .................................................................................................................................................................
RML .................................................................................................................................................................
RLX ..................................................................................................................................................................
RUC .................................................................................................................................................................
RUB .................................................................................................................................................................
RUA .................................................................................................................................................................
RVC .................................................................................................................................................................
RVB ..................................................................................................................................................................
RVA ..................................................................................................................................................................
RHC .................................................................................................................................................................
RHB .................................................................................................................................................................
RHA .................................................................................................................................................................
RMC .................................................................................................................................................................
RMB .................................................................................................................................................................
RMA .................................................................................................................................................................
RLB ..................................................................................................................................................................
RLA ..................................................................................................................................................................
SE3 ..................................................................................................................................................................
SE2 ..................................................................................................................................................................
SE1 ..................................................................................................................................................................
SSC ..................................................................................................................................................................
SSB ..................................................................................................................................................................
SSA ..................................................................................................................................................................
CC2 ..................................................................................................................................................................
CC1 ..................................................................................................................................................................
CB2 ..................................................................................................................................................................
CB1 ..................................................................................................................................................................
CA2 ..................................................................................................................................................................
CA1 ..................................................................................................................................................................
IB2 ....................................................................................................................................................................
IB1 ....................................................................................................................................................................
IA2 ....................................................................................................................................................................
IA1 ....................................................................................................................................................................
BB2 ..................................................................................................................................................................
BB1 ..................................................................................................................................................................
BA2 ..................................................................................................................................................................
BA1 ..................................................................................................................................................................
PE2 ..................................................................................................................................................................
PE1 ..................................................................................................................................................................
PD2 ..................................................................................................................................................................
PD1 ..................................................................................................................................................................
PC2 ..................................................................................................................................................................
PC1 ..................................................................................................................................................................
PB2 ..................................................................................................................................................................
PB1 ..................................................................................................................................................................
PA2 ..................................................................................................................................................................
PA1 ..................................................................................................................................................................
Section 1888(e)(4)(G)(ii) of the Act
also requires that we apply this wage
index in a manner that does not result
in aggregate payments that are greater or
less than would otherwise be made in
the absence of the wage adjustment. For
FY 2009 (Federal rates effective October
1, 2008), we apply an adjustment to
fulfill the budget neutrality requirement.
We meet this requirement by
multiplying each of the components of
the unadjusted Federal rates by a budget
neutrality factor equal to the ratio of the
weighted average wage adjustment
factor for FY 2008 to the weighted
average wage adjustment factor for FY
2009. For this calculation, we use the
same 2006 claims utilization data for
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17:33 Aug 07, 2008
Jkt 214001
both the numerator and denominator of
this ratio. We define the wage
adjustment factor used in this
calculation as the labor share of the rate
component multiplied by the wage
index plus the non-labor share of the
rate component. The final budget
neutrality factor for this year is 1.0009.
The wage index applicable to FY 2009
appears in Tables 8 and 9, which are
included in the Addendum of this final
rule.
In the FY 2006 SNF PPS final rule (70
FR 45026, August 4, 2005), we adopted
the changes discussed in the Office of
Management and Budget (OMB)
Bulletin No. 03–04 (June 6, 2003),
available online at https://
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460.15
423.91
325.45
560.98
518.94
497.19
443.02
422.73
383.59
379.62
363.68
339.03
347.08
338.38
331.13
300.81
258.76
364.59
310.96
277.61
273.26
258.77
254.42
271.81
248.62
237.02
226.87
225.42
210.93
202.23
199.33
183.38
176.13
200.78
194.98
181.93
170.33
218.17
213.83
208.03
205.13
197.88
194.98
174.68
173.23
171.78
167.44
Labor
portion
321.11
295.82
227.11
391.47
362.13
346.95
309.15
294.99
267.68
264.91
253.79
236.59
242.20
236.13
231.07
209.91
180.57
254.42
217.00
193.72
190.69
180.58
177.54
189.68
173.49
165.40
158.32
157.30
147.19
141.12
139.10
127.97
122.91
140.11
136.06
126.96
118.86
152.25
149.22
145.17
143.15
138.09
136.06
121.90
120.89
119.87
116.84
Non-labor
portion
139.04
128.09
98.34
169.51
156.81
150.24
133.87
127.74
115.91
114.71
109.89
102.44
104.88
102.25
100.06
90.90
78.19
110.17
93.96
83.89
82.57
78.19
76.88
82.13
75.13
71.62
68.55
68.12
63.74
61.11
60.23
55.41
53.22
60.67
58.92
54.97
51.47
65.92
64.61
62.86
61.98
59.79
58.92
52.78
52.34
51.91
50.60
www.whitehouse.gov/omb/bulletins/
b03-04.html, which announced revised
definitions for Metropolitan Statistical
Areas (MSAs), and the creation of
Micropolitan Statistical Areas and
Combined Statistical Areas. In addition,
OMB published subsequent bulletins
regarding CBSA changes, including
changes in CBSA numbers and titles. As
indicated in the FY 2008 SNF PPS final
rule (72 FR 43423, August 3, 2007), this
and all subsequent SNF PPS rules and
notices are considered to incorporate
the CBSA changes published in the
most recent OMB bulletin that applies
to the hospital wage data used to
determine the current SNF PPS wage
index. The OMB bulletins may be
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Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
accessed online at https://
www.whitehouse.gov/omb/bulletins/
index.html.
In adopting the OMB CBSA
geographic designations, we provided
for a 1-year transition with a blended
wage index for all providers. For FY
2006, the wage index for each provider
consisted of a blend of 50 percent of the
FY 2006 MSA-based wage index and 50
percent of the FY 2006 CBSA-based
wage index (both using FY 2002
hospital data). We referred to the
blended wage index as the FY 2006 SNF
PPS transition wage index. As discussed
in the SNF PPS final rule for FY 2006
(70 FR 45041), subsequent to the
expiration of this 1-year transition on
September 30, 2006, we used the full
CBSA-based wage index values, as now
presented in Tables 8 and 9 in the
Addendum to this final rule.
4. Updates to the Federal Rates
In accordance with section
1888(e)(4)(E) of the Act, as amended by
section 311 of the BIPA, the payment
rates in this final rule reflect an update
equal to the full SNF market basket,
estimated at 3.4 percentage points. We
continue to disseminate the rates, wage
index, and case-mix classification
methodology through the Federal
Register before the August 1 that
precedes the start of each succeeding
FY.
5. Relationship of RUG-III Classification
System to Existing Skilled Nursing
Facility Level-of-Care Criteria
As discussed in § 413.345, we include
in each update of the Federal payment
rates in the Federal Register the
designation of those specific RUGs
under the classification system that
represent the required SNF level of care,
as provided in § 409.30. This
designation reflects an administrative
presumption under the refined RUG–53
classification system that beneficiaries
who are correctly assigned to one of the
upper 35 of the RUG–53 groups on the
initial 5-day, Medicare-required
assessment are automatically classified
as meeting the SNF level of care
definition up to and including the
assessment reference date on that
assessment.
A beneficiary assigned to any of the
lower 18 groups is not automatically
classified as either meeting or not
meeting the definition, but instead
receives an individual level of care
determination using the existing
administrative criteria. This
presumption recognizes the strong
likelihood that beneficiaries assigned to
one of the upper 35 groups during the
immediate post-hospital period require
a covered level of care, which would be
significantly less likely for those
beneficiaries assigned to one of the
lower 18 groups.
In this final rule, we are continuing
the designation of the upper 35 groups
for purposes of this administrative
presumption, consisting of the following
RUG–53 classifications: All groups
within the Rehabilitation plus Extensive
Services category; all groups within the
Ultra High Rehabilitation category; all
groups within the Very High
Rehabilitation category; all groups
within the High Rehabilitation category;
all groups within the Medium
Rehabilitation category; all groups
within the Low Rehabilitation category;
all groups within the Extensive Services
category; all groups within the Special
Care category; and, all groups within the
Clinically Complex category.
6. Example of Computation of Adjusted
PPS Rates and SNF Payment
Using the hypothetical SNF XYZ
described in Table 10 below, the
following shows the adjustments made
to the Federal per diem rate to compute
the provider’s actual per diem PPS
payment. SNF XYZ’s 12-month cost
reporting period begins October 1, 2008.
SNF XYZ’s total PPS payment would
equal $30,968. The Labor and Non-labor
columns are derived from Table 6.
TABLE 10—RUG–53 SNF XYZ: LOCATED IN CEDAR RAPIDS, IA (URBAN CBSA 16300) WAGE INDEX: 0.8924
RUG group
Wage
index
Labor
RVX ..............................................
RLX ..............................................
RHA ..............................................
CC2 ..............................................
IA2 ................................................
$329.57
227.05
228.55
193.72
129.13
0.8919
0.8919
0.8919
0.8919
0.8919
Adj. labor
Non-labor
$293.94
202.51
203.84
172.78
115.17
$142.71
98.32
98.97
83.89
55.92
Adj. rate
$436.65
300.83
302.81
256.67
171.09
Percent
adj
$436.65
300.83
302.81
* 585.21
171.09
Medicare
days
Payment
14
30
16
10
30
$6,113.00
9,025.00
4,845.00
5,852.00
5,133.00
100
30,968.00
* Reflects a 128 percent adjustment from section 511 of the MMA.
7. Other Issues
In the SNF PPS proposed rule for FY
2009 (73 FR 25930, May 7, 2008), we
discussed several issues that relate to
the SNF PPS for which we made no
specific proposals, but solicited
comments. These issues are noted
below.
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a. Staff Time and Resource Intensity
Verification (STRIVE) Project
The SNF PPS proposed rule for FY
2009 (73 FR 25930, May 7, 2008)
included a more detailed discussion of
the current status of the STRIVE project.
Specific comments on this issue, and
our responses to those comments, are as
follows:
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Comment: Specifically referencing the
STRIVE Technical Expert Panel (TEP)
described in the proposed rule, one
commenter expressed concern about
whether registered nurses (RNs) have
been adequately represented in the
STRIVE process.
Response: We understand that nurses
have been well represented as the
STRIVE contractor has sought input
from a variety of individual
stakeholders. Two RNs directly
representing nursing associations have
attended STRIVE TEPs as observers,
who not only observe the proceedings,
but can also offer comments and ask
questions of the STRIVE team. Other
people with backgrounds as RNs
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constitute a significant percentage of
TEP attendees overall. In fact, the
STRIVE contractor has received insights
from RNs attending not only as
observers, but as participants, who
directly interact with the STRIVE team
during TEP presentations.
Comment: One commenter voiced
concerns regarding whether STRIVE
collected the RN staff time associated
with residents separately from that of
other personnel; for example, LPNs and
nursing aides.
Response: STRIVE collected all
nursing staff time over 2 days using
personal digital assistants (PDAs). In
each PDA, the name of each nursing
staff member was linked to his or her
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Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
pwalker on PROD1PC71 with RULES3
individual job title (including RN, LPN,
and CNA). STRIVE does not represent
the first instance in which CMS (or,
rather, its predecessor, HCFA) has
separately tracked different nursing staff
positions as it collected time data. In the
FY 2006 refinements that added nine
new RUG categories, CMS calculated
case-mix indexes based on nursing staff
time collected in the prior time studies.
That data accounted for three different
disciplines: RNs, LPNs, and Aides. In
fact, CMS published on its Web site a
spreadsheet containing populationweighted time for each of those three
positions. These data appear on the
RUG refinement page of the SNF PPS
Web site: https://www.cms.hhs.gov/
SNFPPS/09_RUG
Refinement.asp#TopOfPage. Under
‘‘Downloads’’ near the bottom of the
page, that data can be unzipped after
linking to Unadjusted nursing weights
[Zip, 15kb].
b. Minimum Data Set (MDS) 3.0
The SNF PPS proposed rule for FY
2009 (73 FR 25931, May 7, 2008)
included a more detailed discussion of
the new version (3.0) of the MDS that is
currently under development. Specific
comments, and our responses to those
comments, are as follows:
Comment: One commenter was
concerned that because CMS does not
currently require a resident assessment
instrument to be completed at
admission and at discharge, the changes
in a patient’s condition cannot be
accurately measured and outcomes
assessed, making it more difficult to tie
Medicare’s payments to patient
outcomes.
Response: We note that the current
SNF PPS is based upon the amount of
resources used by a particular patient
due to their unique clinical needs, and
that it is not an outcome-based system.
However, as noted in section III.B.7.c. of
this final rule, we are currently
evaluating the appropriateness of
introducing certain pay for performance
initiatives in the SNF setting. In the
interim, although the current SNF PPS
design does not provide for the
completion of an assessment at
admission and then again at discharge,
the current Post Acute Care Payment
Reform Demonstration (PAC–PRD) does
provide for this. It is our intention to
monitor this particular aspect of the
PAC–PRD to determine both its
administrative and financial impact, in
order to understand the effect it could
have on SNFs should it be adopted
under the SNF PPS.
Comment: A commenter
recommended revising the MDS to
gather information solely about services
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17:33 Aug 07, 2008
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furnished during the SNF stay, so that
payments to SNFs are not based on
services provided during the preceding
hospital stay. Another stated that the
draft MDS 3.0 represents an excellent
modification of the current MDS, and
applauded CMS for retaining the
critically necessary look-back periods
that, in their view, help clinicians more
thoroughly evaluate and follow-up on
conditions and treatments related to the
hospital stay.
Response: The development of the
MDS 3.0 has been and will continue to
be a collaborative effort designed to
maximize the quality of care provided to
Medicare beneficiaries and to ensure
proper payment under the SNF PPS.
Under the STRIVE project, we are
currently assessing each of the data
elements used in the payment
methodology, as well as other items that
may affect resource utilization. We
appreciate the commenter’s concern and
also recognize the role of clinicians in
ensuring proper care, and will take
these comments into consideration as
we finalize the design of the MDS 3.0.
Comment: One commenter
recommended that CMS change the look
back period for therapies in section O
on the MDS 3.0 from 5 days to 7 days,
as it is currently on the MDS 2.0. The
same commenter suggested that we
continue to collect minutes for
respiratory therapy on the MDS 3.0.
Response: We note that, contrary to
the commenter’s impression, CMS did
not change the look back for therapy
services on the MDS 3.0 to 5 days. In
fact, the instructions for Section O4—
Therapies states ‘‘Record the number of
days each of the following therapies was
administered for at least 15 minutes a
day in the last 7 Days’’ (emphasis
added). The January draft version of the
MDS 3.0 appears at the following link:
https://www.cms.hhs.gov/
NursingHomeQualityInits/Downloads/
MDS30DraftVersion.pdf. We will post
the CMS Draft MDS 2.0/3.0 Crosswalk
on the CMS web site. This draft version
contains all of the items that potentially
may appear in the final version of the
MDS 3.0. We have added an item to
collect the minutes of respiratory
therapy services, as well as other items.
The CMS Draft MDS 2.0/3.0 Crosswalk
(July 2008) will be available on the MDS
3.0 Web site, which appears at the
following link: https://www.cms.hhs.gov/
NursingHomeQualityInits/
25_NHQIMDS30.asp.
c. Integrated Post Acute Care Payment
In the proposed rule, we discussed
our ongoing examination of possible
steps toward achieving a more seamless
system for the delivery and payment of
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post-acute care (PAC) services in
various care settings. These include the
PAC Payment Reform Demonstration
(PAC–PRD) and its standardized patient
assessment tool, the Continuity
Assessment Record and Evaluation
(CARE) tool. In the related area of valuebased purchasing (VBP) initiatives, we
described the IPPS preventable hospitalacquired conditions (HAC) payment
provision, which is designed to ensure
that the occurrence of selected,
preventable conditions during
hospitalization does not have the
unintended effect of generating higher
Medicare payments under the IPPS. We
then discussed the potential application
of this same underlying principle to
other care settings in addition to IPPS
hospitals. For a more detailed
discussion of this issue as it pertains to
the SNF setting, we refer readers to the
SNF PPS proposed rule for FY 2009 (73
FR 25932, May 7, 2008).
The comments that we received, and
our responses to those comments, are as
follows:
Comment: We received several
comments concerning the use of the
CARE tool. While most of these
comments acknowledged that the CARE
tool holds long-term promise in terms of
potentially facilitating the efficient flow
of secure electronic patient information,
they also cautioned that it would be far
too premature at this point in time to
draw any definitive conclusions about
its use, given the very early stage of the
research currently being conducted in
this area.
Response: We agree with the
commenters’ observations about the
CARE tool, both in terms of its
significant future potential and the need
to await the results of ongoing research
before reaching any specific conclusions
about its use. We will continue to
evaluate the CARE tool closely during
the remainder of the current
demonstration, and we plan to keep the
commenters’ concerns in mind as we
proceed with our research in this area.
Comment: A number of commenters
stressed the need for external research
in the area of PAC payment reform, as
well as the importance of obtaining
input from the stakeholder community.
Response: We agree with the
commenters regarding the value of
obtaining stakeholder input, and believe
that this is, in fact, crucial to the success
of our PAC payment reform efforts. We
also recognize the importance of
obtaining the benefit of all available
findings from any research that is
currently underway. We note that our
own activities in this regard primarily
involve applied research through our
demonstration projects and internal
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analysis of changes in program policy.
However, we also encourage interested
parties to engage in external research
projects on PAC payment reform.
Comment: We received a number of
comments regarding the HAC payment
provision under the IPPS, and the
possible adoption of a similar approach
in care settings other than IPPS
hospitals. The commenters
recommended that CMS conduct a
thorough evaluation of the HAC policy’s
implementation under the IPPS to
determine its actual impact and efficacy
before considering whether to adopt this
type of approach in other care settings.
Some commenters also questioned the
legal authority under existing Medicare
law to expand the HAC payment
provision beyond the IPPS hospital
setting. Other commenters raised
concerns about the specific implications
of applying this type of policy to the
SNF setting. They cited hospitalacquired infections, dementia, and falls
as examples of things that might be less
appropriately characterized as ‘‘never
events’’ in long-term care settings than
in the acute setting. These commenters
also observed that it would be unfair to
penalize a SNF financially for a
condition that actually developed
during the preceding hospital stay but
was not detected until after transfer to
the SNF.
One commenter specifically noted
that a SNF should not be expected to
assume the financial liability for the
care of a resident’s decubitus ulcer if it
was acquired during the preceding
hospital stay. In addition, the
commenters indicated that it may be
difficult to differentiate a preventable
healthcare-acquired complication from a
normal, unavoidable aspect of a
terminal illness, and also asserted that
it is difficult to define the extent to
which an adverse event is ‘‘reasonably
preventable.’’
Response: We appreciate the
commenters’ thoughtful input about
application of the principal embodied in
the IPPS HAC payment provision to the
SNF setting. While we acknowledge that
infections, dementia, and falls are
among the selected HACs in the IPPS
acute care setting that potentially have
relevance for the SNF setting as well, we
agree that these and other conditions
may have different implications in the
SNF setting. We agree with the
commenters that it would be unfair to
penalize a SNF financially for a
condition that developed in another
care setting. We note that the IPPS HAC
payment provision uses Present on
Admission (POA) indicator data to
exclude from payment those conditions
that develop outside of the IPPS acute
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care stay, and a similar mechanism
would be needed to apply this type of
payment provision to the SNF setting
should such an approach be adopted
there. Regarding the commenters’
concerns about the difficulty of
determining which adverse events are
‘‘reasonably preventable,’’ we would
expect to work closely with
stakeholders to determine which
conditions could reasonably be
prevented through the application of
evidence-based guidelines. With regard
to the comments that questioned the
existing legal authority for expanding
the HAC payment provision beyond the
IPPS hospital setting, we note that in
this final rule, we are not establishing
any new Medicare policies in this area.
However, we will keep the commenters’
concerns in mind as our
implementation of VBP for all Medicare
payment systems proceeds. We look
forward to working with stakeholders in
continuing to explore possible ways to
reduce the occurrence of these
preventable conditions in various care
settings. Finally, we note that in
addition to the comments on those
aspects of PAC payment reform and
VBP that we discussed in the proposed
rule, we also received some comments
on the current Nursing Home VBP
Demonstration (referenced previously in
the SNF PPS update notice for FY 2007
(71 FR 43172, July 31, 2006); however,
those comments, which offered specific
suggestions about the design and
conduct of the demonstration, are
beyond the scope of this rulemaking.
8. Miscellaneous Technical Corrections
and Clarifications
In the FY 2009 proposed rule, we set
forth certain technical corrections and
clarifications, as discussed below.
a. Bad Debt Payments
In the SNF PPS proposed rule for FY
2009 (73 FR 25932, May 7, 2008), we
proposed to make a technical revision in
the regulations text at § 413.335(b), in
order to reflect our longstanding policy
regarding Medicare bad debt payments
to SNFs.
We received no comments on this
aspect of the proposed rule. We are
proceeding with this technical
correction as proposed with no change.
b. Additional Clarifications
In the FY 2009 proposed rule (73 FR
25932 through 25933, May 7, 2008), we
also discussed the following
clarifications in two other areas:
• The circumstances under which a
SNF is paid at the ‘‘default rate,’’ a
reduced payment made in lieu of the
full SNF PPS rate that would have been
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payable had the SNF’s resident been
assessed in a timely manner; and
• The role of rehabilitation services
evaluations in SNFs.
The comments that we received, and
our responses, are as follows:
Comment: One commenter asserted
that in some of the circumstances that
we specified as triggering payment of
the default rate (for example, when the
SNF does not receive timely notification
of a Medicare Secondary Payer denial,
or of the revocation of a payment ban),
the SNF is not at fault and, accordingly,
should be permitted to complete an
assessment retroactively.
Response: We note that SNFs are not
permitted to backdate any portion of the
medical record, including the resident
assessment. It is for precisely this reason
that we strongly encourage SNFs to
follow the Medicare-required
assessment schedule in any instance
where there is even a possibility of
Medicare payment; otherwise, the SNF
risks being paid at the default rate. We
also note that if a SNF has performed an
‘‘OBRA’’ assessment (that is, one
conducted to meet the basic assessment
schedule prescribed in the nursing
home reform provisions of OBRA 1987
rather than the supplemental SNF PPS
schedule for Medicare-required
assessments) during this period which
also happens to fall within the window
for a Medicare-required assessment, the
OBRA assessment can be used for
Medicare payment purposes as well.
Comment: One commenter was
concerned that CMS did not allow the
billing of the default code when a SNF
PPS assessment is inadvertently
omitted, referring to an instruction in
the Resident Assessment Instrument
(RAI) regarding the use of the default
code when an assessment was not
completed. The commenter also asked
whether there is a time limit on the
filing of a late assessment.
Response: To bill for Part A services
provided under the SNF PPS, the SNF
is required to submit a HIPPS rate code
and the assessment reference date (ARD)
associated with the applicable RAI on
the claim, except as provided in the five
specific circumstances described in the
FY 2009 proposed rule (73 FR 25933),
under which payment is available at the
default rate. In order to obtain the
HIPPS code, the SNF is required to
submit the RAI to the State RAI
database, and to receive a Final
Validation Report prior to filing the
claim in order to establish the correct
RUG code for billing purposes. For these
reasons, the SNF cannot simply bill the
default code if it misses a Medicarerequired assessment. Instead, we have
always provided for payment at the
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default rate for what is referred to as a
‘‘late assessment.’’ A late assessment
occurs when the ARD for the Medicarerequired assessment is set outside of the
prescribed assessment window. In order
to bill the default code, the SNF must
prepare a late assessment that is
completed prior to the date of discharge
from Medicare Part A. If no assessment
is completed prior to discharge from
Medicare Part A, no payment is made.
The statement in the RAI that the
commenter cited is more fully described
in the situations set forth in Chapter 2,
Section 2.9 of the RAI. We are currently
in the process of revising the RAI
instructions to ensure greater clarity.
Comment: One commenter expressed
the belief that CMS was further
penalizing SNFs for not completing
Medicare-required assessments by
having the SNF absorb all of the liability
for SNF-level care provided to their
beneficiaries, by limiting the use of the
default code (outside of a late
assessment) to the following situations:
• When the stay is less than 8 days
within a spell of illness (that is, benefit
period);
• The SNF is notified on an untimely
basis or is unaware of a Medicare
Secondary Payer denial;
• The SNF is notified on an untimely
basis of the revocation of a payment
ban;
• The beneficiary requests a demand
bill; or,
• The SNF is notified on an untimely
basis or is unaware of a beneficiary’s
disenrollment from a Medicare
Advantage program.
Response: As we stated in the FY
2009 proposed rule (73 FR 25933),
program instructions have been issued
through the Provider Reimbursement
Manual and the Medicare Claims
Processing Manual since the inception
of the SNF PPS to allow for the use of
the default code in the first four
situations described above. The
proposed rule simply reiterated these
policies in order to remind providers of
the procedures on the use of the default
code in circumstances other than that of
a late assessment. We also took this
opportunity to clarify that in those
situations where a beneficiary was
enrolled in a Medicare Advantage (MA)
plan and the SNF was subsequently
unaware or notified untimely of a
beneficiary’s disenrollment from an MA
plan, the SNF could use the default
code to receive payment for services
provided.
Comment: One commenter asked that
CMS explain why the default code is
allowed to be billed when the stay is
less than 8 days within a spell of illness
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(that is, benefit period) when the
beneficiary dies or is discharged.
Response: In those situations where
the beneficiary dies or is discharged
before day 8 of the covered stay upon
initial admission to the SNF following
the qualifying three-day hospital stay,
CMS has instructed SNFs either to
complete an assessment to the best of
their ability or to submit a claim using
the default rate without the necessity of
completing an assessment. The decision
to allow for payment at the default rate
without the completion of an
assessment in this case is predicated on
the administrative presumption that the
beneficiary meets the SNF level of care
requirements through the ARD on the
Medicare-required 5-day assessment
completed upon initial admission
following the qualifying three-day
hospital stay. The ARD on a Medicarerequired 5-day assessment must be set
no later than the eighth day of the
covered stay.
Comment: A commenter asked that
CMS explain why the default code is
allowed to be billed when a beneficiary
requests that the SNF submit a demand
bill.
Response: As stated above, a HIPPS
rate code must be present on the claim
in order to receive payment under the
SNF PPS. However, a SNF is not
required to assess a beneficiary to
classify that beneficiary into a RUG
using the RAI when the SNF determines
that the care is noncovered, or where
the beneficiary has not met the technical
requirements for a SNF stay. Therefore,
a SNF may submit a claim using the
default code in order to ensure payment
in the event that the SNF’s
determination of noncoverage is
subsequently reversed.
Comment: A commenter requested
clarification of the term ‘‘most recent
clinical assessment,’’ in the context of
current program instructions that
provide for payment at other than the
default rate when the SNF is notified
untimely or is unaware of a Medicare
secondary payer (MSP) denial or the
revocation of a payment ban. The
commenter also requested guidance on
how to handle an untimely notification
of a beneficiary’s disenrollment from a
Medicare Advantage program. The
commenter additionally requested clear
instructions on the proper way to use
clinical assessments in place of
Medicare PPS assessments when the
‘‘most recent clinical assessment’’ does
not accurately represent the level of
resources currently being utilized by the
beneficiary (including the number of
days that can be billed using the ‘‘most
recent clinical assessment’’).
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46433
Response: A SNF that finds itself in
these circumstances had no reason to
expect payment under the SNF PPS and
is generally not required to perform
Medicare-required assessments; as a
result, the SNF is left without a HIPPS
code that would be required to bill for
payment under the SNF PPS.
Instructions relating to MSP denials in
the Provider Reimbursement Manual
and revocation of payment bans in the
Medicare Claims Processing Manual
have allowed SNFs to use the most
recent assessment that was completed in
accordance with the schedule outlined
in 42 CFR 483.20(b)(4) in order to
receive payment under the Medicare
program. However, the commenter
makes a valid point in asking whether
it is proper to submit an MDS that does
not reflect the level of resources
currently being utilized by beneficiaries.
After careful consideration of this
question, we are revising our policy to
allow the 14-day assessment required
under 42 CFR 483.20(b)(4) to be used to
bill for all days of covered care
associated with a Medicare-required 5day and 14-day assessment. This is the
case even if the beneficiary is no longer
receiving therapy services that were
identified under the most recent clinical
assessment. For covered days associated
with the Medicare-required 30-, 60-, or
90-day assessment, the SNF must have
an assessment that falls within the
window of the Medicare-required
assessment in order to receive full
payment at the RUG level in which the
resident grouped. If no assessment was
completed, the SNF may submit a claim
requesting payment at the default rate.
This revision recognizes that the level
of resources used by a resident changes
throughout the stay, and that the 14-day
assessment required under
§ 483.20(b)(4) is less likely to represent
the beneficiary’s clinical status later in
the stay.
We will also apply this policy to
situations where the SNF is notified on
an untimely basis or is unaware of a
beneficiary’s disenrollment from a
Medicare Advantage program.
Comment: A commenter asked if
guidance involving the ‘‘special
payment modifiers’’ was forthcoming,
noting that it was overdue.
Response: Instructions are currently
being revised to provide for the proper
use of the ‘‘special payment modifiers.’’
Comment: One commenter wanted to
know, if a SNF can demonstrate that an
ARD was determined on a document
other than the MDS, whether the SNF
could use such documentation to ‘‘set’’
the ARD in order to avoid payment at
the default rate.
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Response: It is not acceptable to
backdate an MDS or to use any
documentation other than the MDS
itself to establish the ARD.
Comment: In a situation where the
SNF receives no payment under Part A
because it fails to do Medicare-required
assessment before the date of discharge
from Medicare Part A, a commenter
questioned whether the SNF could bill
Medicare Part B for services rendered,
as the SNF would receive no Part A
reimbursement.
Response: In situations where the
SNF fails to assess the beneficiary and
fails to issue the proper Notification of
Non-Coverage, the SNF is liable for all
services normally covered under the
Medicare Part A benefit. Since the
beneficiary is receiving benefits, the
days will be considered Part A days and
charged against the beneficiary’s benefit
period. The SNF may collect any
applicable copayment amounts.
Services that would have been payable
to the SNF as Part A benefits cannot be
billed to either the FI or the carrier as
Part B services.
Comment: A commenter questioned
why CMS was issuing a technical
clarification regarding the requirement
for a therapy evaluation before therapy
minutes can be counted in Section P
and Section T of the MDS. The
commenter was concerned that while
the proposed change appears to be
consistent with the practices of its
therapy members, questions have been
raised as to whether in making this
clarification, CMS inadvertently may be
changing the instructions for Subpart T
as they relate to projected therapy
services.
Response: Due to several recent
inquiries on the need for therapy
evaluations, we sought to ensure that
SNFs and other non-therapy ancillary
providers are clear as to the requirement
for a therapy evaluation for each
discipline before minutes can be
included on the MDS on Section P and
Section T. Moreover, in the case of
Section T, the projection must be based
upon the evaluation performed for each
discipline that reflects the needs of the
patient.
IV. The Skilled Nursing Facility Market
Basket Index
Section 1888(e)(5)(A) of the Act
requires us to establish a SNF market
basket index (input price index) that
reflects changes over time in the prices
of an appropriate mix of goods and
services included in the SNF PPS. In the
FY 2009 proposed rule, we stated that
the proposed rule incorporated the
latest available projections of the SNF
market basket index. In this final rule,
we are updating projections based on
the latest available projections at the
time of publication. Accordingly, we
have developed a SNF market basket
index that encompasses the most
commonly used cost categories for SNF
routine services, ancillary services, and
capital-related expenses.
Each year, we calculate a revised
labor-related share based on the relative
importance of labor-related cost
categories in the input price index.
Table 11 below summarizes the final
updated labor-related share for FY 2009.
TABLE 11—LABOR-RELATED RELATIVE IMPORTANCE, FY 2008 AND FY 2009
Relative importance,
labor-related,
FY 2008 (04 index)
07:2 forecast
Relative importance,
labor-related,
FY 2009 (04 index)
08:2 forecast
Wages and salaries .................................................................................................................
Employee benefits ...................................................................................................................
Nonmedical professional fees .................................................................................................
Labor-intensive services ..........................................................................................................
Capital-related (.391) ...............................................................................................................
51.218
11.720
1.333
3.456
2.522
51.003
11.547
1.331
3.434
2.468
Total ..................................................................................................................................
70.249
69.783
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Source: Global Insight, Inc., formerly DRI–WEFA.
A. Use of the Skilled Nursing Facility
Market Basket Percentage
Section 1888(e)(5)(B) of the Act
defines the SNF market basket
percentage as the percentage change in
the SNF market basket index from the
average of the previous FY to the
average of the current FY. For the
Federal rates established in this final
rule, we use the percentage increase in
the SNF market basket index to compute
the update factor for FY 2009. We use
the Global Insight, Inc. (GII, formerly
DRI–WEFA), 2nd quarter 2008 (2008q2)
forecasted percentage increase in the FY
2004-based SNF market basket index for
routine, ancillary, and capital-related
expenses, described in the previous
section, to compute the update factor.
Finally, as discussed previously in
section I.A. of this final rule, we no
longer compute update factors to adjust
a facility-specific portion of the SNF
PPS rates because the initial three-phase
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transition period from facility-specific
to full Federal rates that started with
cost reporting periods beginning in July
1998 has expired.
B. Market Basket Forecast Error
Adjustment
As discussed in the FY 2004
supplemental proposed rule (68 FR
34768, June 10, 2003) and finalized in
the FY 2004 final rule (68 FR 46067,
August 4, 2003), regulations at
§ 413.337(d)(2) provide for an
adjustment to account for market basket
forecast error. The initial adjustment
applied to the update of the FY 2003
rate for FY 2004, and took into account
the cumulative forecast error for the
period from FY 2000 through FY 2002.
Subsequent adjustments in succeeding
FYs take into account the forecast error
from the most recently available FY for
which there is final data, and apply
whenever the difference between the
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forecasted and actual change in the
market basket exceeds a specified
threshold. We originally used a 0.25
percentage point threshold for this
purpose; however, for the reasons
specified in the FY 2008 SNF PPS final
rule (72 FR 43425, August 3, 2007), we
adopted a 0.5 percentage point
threshold effective with FY 2008. As
discussed previously in section I.F.2. of
this final rule, as the difference between
the estimated and actual amounts of
increase in the market basket index for
FY 2007 (the most recently available FY
for which there is final data) does not
exceed the 0.5 percentage point
threshold, the payment rates for FY
2009 do not include a forecast error
adjustment.
The following is a specific comment
that we received on the market basket
forecast error adjustment, and our
response:
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Comment: A few commenters
suggested that CMS apply a cumulative
forecast error to account for all of the
variations in the market basket forecasts
since FY 2004 (that is, as of when CMS
implemented the market basket forecast
error correction policy.)
Response: For FY 2004, CMS applied
a one-time, cumulative forecast error
correction of 3.26 percent (68 FR
46036). Since that time, the forecast
errors have been relatively small and
clustered near zero. We believe the
forecast error correction should be
applied only when the forecast error in
any given year reflects a percentage
such that the SNF PPS base payment
rate does not adequately reflect the
historical price changes faced by SNFs.
We continue to believe that the forecast
error adjustment mechanism should
appropriately be reserved for the type of
major, unexpected change that initially
gave rise to this policy, rather than the
minor variances that are a routine and
inherent aspect of this type of statistical
measurement.
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C. Federal Rate Update Factor
Section 1888(e)(4)(E)(ii)(IV) of the Act
requires that the update factor used to
establish the FY 2009 Federal rates be
at a level equal to the full market basket
percentage change. Accordingly, to
establish the update factor, we
determined the total growth from the
average market basket level for the
period of October 1, 2007 through
September 30, 2008 to the average
market basket level for the period of
October 1, 2008 through September 30,
2009. Using this process, the market
basket update factor for FY 2009 SNF
Federal rates is 3.4 percent. We used
this update factor to compute the
Federal portion of the SNF PPS rate
shown in Tables 2 and 3.
We received one comment expressing
support for our proposed full market
basket increase for FY 2009. We thank
the commenter and again note that the
final update factor for FY 2009 is 3.4
percent.
V. Consolidated Billing
Section 4432(b) of the BBA
established a consolidated billing
requirement that places with the SNF
itself the Medicare billing responsibility
for virtually all of the services that the
SNF’s residents receive, except for a
small number of services that the statute
specifically identifies as being excluded
from this provision. Section 103 of the
BBRA amended this provision by
further excluding a number of
individual ‘‘high-cost, low-probability’’
services, identified by the Healthcare
Common Procedure Coding System
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(HCPCS) codes, within several broader
categories (chemotherapy and its
administration, radioisotope services,
and customized prosthetic devices) that
otherwise remained subject to the
provision. We discuss this BBRA
amendment in greater detail in the FY
2001 SNF PPS proposed rule (65 FR
19231 through 19232, April 10, 2000),
and the FY 2001 SNF PPS final rule (65
FR 46790 through 46795, July 31, 2000),
as well as in Program Memorandum
AB–00–18 (Change Request #1070),
issued March 2000, which is available
online at https://www.cms.hhs.gov/
transmittals/downloads/ab001860.pdf.
Section 313 of the BIPA further
amended this provision by repealing its
Part B aspect; that is, its applicability to
services furnished to a resident during
a SNF stay that Medicare does not
cover. (However, physical,
occupational, and speech-language
therapy remain subject to consolidated
billing, regardless of whether the
resident who receives these services is
in a covered Part A stay.) We discuss
this BIPA amendment in greater detail
in the FY 2002 SNF PPS proposed rule
(66 FR 24020 through 24021, May 10,
2001), and the FY 2002 SNF PPS final
rule (66 FR 39587 through 39588, July
31, 2001).
In addition, section 410 of the MMA
amended this provision by excluding
certain practitioner and other services
furnished to SNF residents by RHCs and
FQHCs. We discuss this MMA
amendment in greater detail in the SNF
PPS update notice for FY 2005 (69 FR
45818 through 45819, July 30, 2004), as
well as in Program Transmittal #390
(Change Request #3575), issued
December 10, 2004, which is available
online at https://www.cms.hhs.gov/
transmittals/downloads/r390cp.pdf.
To date, the Congress has enacted no
further legislation affecting the
consolidated billing provision.
However, as noted above and explained
in the FY 2001 SNF PPS proposed rule
(65 FR 19232, April 10, 2000), the
amendments enacted in section 103 of
the BBRA not only identified for
exclusion from this provision a number
of particular service codes within four
specified categories (that is,
chemotherapy items, chemotherapy
administration services, radioisotope
services, and customized prosthetic
devices), but also gave the Secretary
‘‘* * * the authority to designate
additional, individual services for
exclusion within each of the specified
service categories.’’ In the FY 2001 SNF
PPS proposed rule, we also noted that
the BBRA Conference report (H.R. Rep.
No. 106–479 at 854 (1999) (Conf. Rep.))
characterizes the individual services
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46435
that this legislation targets for exclusion
as, ‘‘* * * high-cost, low probability
events that could have devastating
financial impacts because their costs far
exceed the payment [SNFs] receive
under the prospective payment
system* * *.’’ According to the
conferees, section 103(a) ‘‘* * * is an
attempt to exclude from the PPS certain
services and costly items that are
provided infrequently in SNFs * * *
For example, * * * chemotherapy
drugs [that] are not typically
administered in a SNF, or are
exceptionally expensive, or are given as
infusions, thus requiring special staff
expertise to administer.’’ By contrast,
we noted that the Congress declined to
designate for exclusion any of the
remaining services within those four
categories (thus leaving all of those
services subject to SNF consolidated
billing), because they ‘‘* * * are
relatively inexpensive and are
administered routinely in SNFs’’.
As we further explained in the FY
2001 SNF PPS final rule (65 FR 46790,
July 31, 2000), any additional service
codes that we might designate for
exclusion under our discretionary
authority must meet the same criteria
that the Congress used in identifying the
original codes excluded from
consolidated billing under section
103(a) of the BBRA: Our longstanding
policy is that they must fall within one
of the four service categories specified
in the BBRA, and they also must meet
the same standards of high cost and low
probability in the SNF setting.
Accordingly, we characterized this
statutory authority to identify additional
service codes for exclusion ‘‘ * * * as
essentially affording the flexibility to
revise the list of excluded codes in
response to changes of major
significance that may occur over time
(for example, the development of new
medical technologies or other advances
in the state of medical practice)’’ (65 FR
46791). In the FY 2009 proposed rule
(73 FR 25934, May 7, 2008), we
specifically invited public comments
identifying codes in any of these four
service categories (chemotherapy items,
chemotherapy administration services,
radioisotope services, and customized
prosthetic devices) representing recent
medical advances that might meet our
criteria for exclusion from SNF
consolidated billing.
Specific comments on this issue and
our responses to those comments are as
follows:
Comment: Several commenters
submitted additional chemotherapy
codes that they recommended for
exclusion from consolidated billing.
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Response: We note that the law (at
section 1888(e)(2)(A)(iii)(II) of the Act)
describes the chemotherapy code ranges
that the BBRA identified for exclusion
in terms of the version of the HCPCS
codes that was in existence ‘‘as of July
1, 1999.’’ In the SNF PPS final rule for
FY 2006 (70 FR 45048, August 4, 2005),
we reiterated our belief that the
authority granted by the BBRA to
identify additional codes for exclusion
within this category was ‘‘* * *
essentially affording the flexibility to
revise the list of excluded codes in
response to changes of major
significance that may occur over time
(for example, the development of new
medical technologies or other advances
in the state of medical practice)’’
(emphasis added). Accordingly, we
view this discretionary authority as
applying only to codes that were created
subsequent to that point, and not to
those codes that were in existence as of
July 1, 1999.
A review of the particular
chemotherapy codes that commenters
submitted in response to the proposed
rule’s solicitation for comment revealed
that many of them were codes that had
already been submitted for
consideration in previous years, and
that we had previously decided not to
exclude. Other codes that commenters
submitted were themselves already in
existence as of July 1, 1999, but did not
fall within the specific code ranges
statutorily designated for exclusion in
the BBRA. As the statute does not
specifically exclude these alreadyexisting codes, we are not adding them
to the exclusion list. Most of the other
codes submitted represent services that,
for various reasons, do not meet the
statutory criteria for exclusion. For
example, some represent oral
medications that can be administered
routinely in SNFs and are not
reasonably characterized as ‘‘requiring
special staff expertise to administer.’’
Others represent drugs that are
administered in conjunction with
chemotherapy to address side effects
such as nausea; however, as such drugs
are not in themselves inherently
chemotherapeutic in nature, they do not
fall within the excluded chemotherapy
category designated in the BBRA.
Finally, some other codes that were
submitted represent services that, in
fact, are already excluded from
consolidated billing under existing
instructions.
Comment: Although the FY 2008 SNF
PPS proposed rule specifically invited
comments on possible exclusions
within the particular service categories
identified in the BBRA legislation, a
number of commenters took this
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opportunity to reiterate concerns about
other aspects of consolidated billing.
For example, some commenters
reiterated past suggestions that CMS
unbundle additional service categories
such as specialized wound care
procedures (including hyperbaric
oxygen therapy) and ambulance
services. Another commenter advocated
the exclusion of custom fabricated
orthotics, stating that in the absence of
such an exclusion SNFs might deny
access to needed orthotic treatments
during the Medicare-covered portion of
the stay.
Response: As we have consistently
stated (most recently, in the SNF PPS
final rule for FY 2008 (72 FR 43431,
August 3, 2007)), the BBRA authorizes
us to identify additional services for
exclusion only within those particular
service categories—chemotherapy and
its administration; radioisotope services;
and, customized prosthetic devices (a
term which does not encompass
orthotics)—that it has designated for
this purpose, and does not give us the
authority to create additional categories
of excluded services beyond those
specified in the law. Accordingly, as the
particular services that these
commenters recommended for
exclusion do not fall within one of the
specific service categories designated for
this purpose in the statute itself, these
services remain subject to consolidated
billing. Regarding the concern about the
possibility of a SNF withholding access
to a needed item or service during the
covered portion of a stay because it is
bundled, we note that the requirements
for program participation at § 483.25
require participating SNFs to provide
the necessary care and services to attain
or maintain each resident’s ‘‘* * *
highest practicable state of physical,
mental, and psychosocial well-being
* * *.’’ Thus, a SNF which delays or
denies access to needed care could
jeopardize its Medicare program
certification.
Comment: One commenter stated that
the existing exclusion of certain
customized prosthetic devices should be
expanded to encompass all prosthetics
that are designated by an L code.
Response: When the Congress enacted
the selective consolidated billing
exclusion (by HCPCS code) of certain
customized prosthetic devices in section
103 of the BBRA, it specifically
identified certain designated L codes for
exclusion, while omitting others from
the exclusion list. Accordingly, we
believe it is clear that the assignment of
an L code to a particular prosthetic does
not, in itself, automatically serve to
qualify that item for exclusion from
consolidated billing.
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Comment: Several commenters took
this opportunity to revisit the existing
set of administrative exclusions for
certain high-intensity outpatient
hospital services under the regulations
in 42 CFR § 411.15(p)(3)(iii), and
expressed the view that these exclusions
should not be limited to only those
services that actually occur in the
hospital setting, but rather, should also
encompass services performed in other,
non-hospital settings as well. As
examples, they cited services such as
magnetic resonance imaging (MRIs) and
computerized axial tomography (CT)
scans furnished in freestanding imaging
centers, and radiation therapy furnished
in physicians’ clinics or ambulatory care
centers, all of which may be less
expensive and more accessible in
certain particular localities (such as
rural areas) than those furnished by
hospitals.
Response: We believe the comments
that reflect previous suggestions for
expanding this administrative exclusion
to encompass services furnished in nonhospital settings indicate a continued
misunderstanding of the underlying
purpose of this provision. As we have
consistently noted in response to
comments on this issue in previous
years (most recently, in the SNF PPS
final rule for FY 2008 (72 FR 43431,
August 3, 2007), and as also explained
in Medicare Learning Network (MLN)
Matters article SE0432 (available online
at https://www.cms.hhs.gov/
MLNMattersArticles/downloads/
SE0432.pdf), the rationale for
establishing this exclusion was to
address those types of services that are
so far beyond the normal scope of SNF
care that they require the intensity of the
hospital setting in order to be furnished
safely and effectively.
Moreover, we note that when the
Congress enacted the consolidated
billing exclusion for certain RHC and
FQHC services in section 410 of the
MMA, the accompanying legislative
history’s description of present law
acknowledged that the existing
exclusions for exceptionally intensive
outpatient services are specifically
limited to ‘‘* * * certain outpatient
services from a Medicare-participating
hospital or critical access hospital
* * *’’ (emphasis added). (See the
House Ways and Means Committee
Report (H. Rep. No. 108–178, Part 2 at
209), and the Conference Report (H.
Conf. Rep. No. 108–391 at 641).)
Therefore, these services are excluded
from SNF consolidated billing only
when furnished in the outpatient
hospital or CAH setting, and not when
furnished in other, freestanding (nonhospital or non-CAH) settings.
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Accordingly, establishing a categorical
exclusion for these services that would
apply irrespective of the setting in
which they are furnished would require
the enactment of legislation by the
Congress to amend the law itself.
Comment: Other commenters
reiterated previous suggestions on
expanding the existing chemotherapy
exclusion to encompass related drugs
that are commonly administered in
conjunction with chemotherapy in order
to treat the side effects of the
chemotherapy drugs. The commenters
cited examples such as anti-emetics
(anti-nausea drugs), erythropoietin
(EPO), and Reclast, an osteoporosis drug
administered via a once-yearly infusion.
Response: As we have noted
previously in this final rule and in
response to comments on this issue in
the past (most recently, in the SNF PPS
final rule for FY 2008 (72 FR 43432,
August 3, 2007), the BBRA authorizes us
to identify additional services for
exclusion only within those particular
service categories—chemotherapy and
its administration; radioisotope services;
and, customized prosthetic devices—
that it has designated for this purpose,
and does not give us the authority to
exclude other services which, though
they may be related, fall outside of the
specified service categories themselves.
Thus, while anti-emetics, for example,
are commonly administered in
conjunction with chemotherapy, they
are not themselves inherently
chemotherapeutic in nature and,
consequently, do not fall within the
excluded chemotherapy category
designated in the BBRA. In the case of
Reclast, in the FY 2008 SNF PPS final
rule (72 FR 43432, August 3, 2007), we
discussed the specific rationale for our
decision not to exclude this particular
drug, explaining that such an exclusion
could not be accomplished
administratively under our existing
authority. We also explained in the FY
2008 final rule that the existing
statutory exclusion from consolidated
billing for EPO is effectively defined by
the scope of coverage under the Part B
EPO benefit at section 1861(s)(2)(O) of
the Act; that benefit, in turn, specifically
limits EPO coverage to dialysis patients,
and does not provide for such coverage
in any other, non-dialysis situations
such as chemotherapy (72 FR 43432).
VI. Application of the SNF PPS to SNF
Services Furnished by Swing-Bed
Hospitals
In accordance with section 1888(e)(7)
of the Act, as amended by section 203
of the BIPA, Part A pays CAHs on a
reasonable cost basis for SNF services
furnished under a swing-bed agreement.
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However, effective with cost reporting
periods beginning on or after July 1,
2002, the swing-bed services of nonCAH rural hospitals are paid under the
SNF PPS. As explained in the FY 2002
SNF PPS final rule (66 FR 39562, July
31, 2001), we selected this effective date
consistent with the statutory provision
to integrate swing-bed rural hospitals
into the SNF PPS by the end of the SNF
transition period, June 30, 2002.
Accordingly, all non-CAH swing-bed
rural hospitals have come under the
SNF PPS as of June 30, 2003. Therefore,
all rates and wage indexes outlined in
earlier sections of this final rule, also
apply to all non-CAH swing-bed rural
hospitals. A complete discussion of
assessment schedules, the MDS and the
transmission software (RAVEN–SB for
Swing Beds) appears in the final rule for
FY 2002 (66 FR 39562, July 31, 2001).
The latest changes in the MDS for
swing-bed rural hospitals appear on our
SNF PPS Web site, https://
www.cms.hhs.gov/snfpps.
We received no comments on this
aspect of the proposed rule and are
making no changes in this final rule.
VII. Provisions of the Final Rule
In this final rule, in addition to
accomplishing the required annual
update of the SNF PPS payment rates,
we are making the following revisions
in the regulations text:
• Revise the existing SNF PPS
definitions of ‘‘urban’’ and ‘‘rural’’ areas
that appear in § 413.333 to include
updated cross-references to the
corresponding IPPS definitions in Part
412, subpart D.
• Make a technical revision at
§ 413.335(b) to reflect Medicare bad debt
payments to SNFs.
VIII. Collection of Information
Requirements
This document does not impose
information collection and
recordkeeping requirements.
Consequently, it need not be reviewed
by the Office of Management and
Budget under the authority of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.).
IX. Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this
final rule as required by Executive
Order 12866 (September 1993,
Regulatory Planning and Review), the
Regulatory Flexibility Act (September
19, 1980, RFA, Pub. L. 96–354), section
1102(b) of the Social Security Act (the
Act), the Unfunded Mandates Reform
Act of 1995 (UMRA, Pub. L. 104–4),
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46437
Executive Order 13132 on Federalism,
and the Congressional Review Act (5
U.S.C. 804(2)).
Executive Order 12866, as amended,
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).
This final rule is a major rule, as defined
in Title 5, United States Code, section
804(2), because we estimate the FY 2009
impact of the standard update will be to
increase payments to SNFS by
approximately $780 million dollars. We
are also considering this an
economically significant rule under
Executive Order 12866.
The update set forth in this final rule
would apply to payments in FY 2009.
Accordingly, the analysis that follows
only describes the impact of this single
year. In accordance with the
requirements of the Act, we will publish
a notice for each subsequent FY that
will provide for an update to the
payment rates and include an associated
impact analysis.
The RFA requires agencies to analyze
options for regulatory relief of small
entities. For purposes of the RFA, small
entities include small businesses,
nonprofit organizations, and small
government jurisdictions. Most SNFs
and most other providers and suppliers
are small entities, either by their
nonprofit status or by having revenues
of $11.5 million or less in any 1 year.
For purposes of the RFA, approximately
53 percent of SNFs are considered small
businesses according to the Small
Business Administration’s latest size
standards, with total revenues of $11.5
million or less in any 1 year (for further
information, see 65 FR 69432,
November 17, 2000). Individuals and
States are not included in the definition
of a small entity. In addition,
approximately 29 percent of SNFs are
nonprofit organizations.
This final rule updates the SNF PPS
rates published in the FY 2008 SNF PPS
final rule (72 FR 43412, August 3, 2007)
and the associated correction notices
published on September 28, 2007 (72 FR
55085) and on November 30, 2007 (72
FR 67652), resulting in a net change in
payments of an estimated $780 million
for FY 2009. As indicated in Table 12,
the effect on facilities will be a net
positive impact of 3.4 percent. We note
that while all providers will experience
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an overall net increase in payments,
some providers may experience larger
increases than others due to the
distributional impact of the FY 2009
wage indexes and the degree of
Medicare utilization.
The Department of Health and Human
Services generally uses a revenue
impact of 3 to 5 percent as a significance
threshold under the RFA. While this
final rule is considered major, its
relative impact on SNFs overall is
positive due to the application of the 3.4
percent market basket adjustment. Thus,
while the overall impact is positive on
the industry as a whole, and on small
entities specifically, it is highly variable,
with the majority of SNFs having
significantly lower Medicare utilization.
Therefore, for most facilities, the impact
on total facility revenues, considering
all payers, should be substantially less
than those shown in Table 12. However,
in view of the potential economic
impact on small entities, we have
considered regulatory alternatives.
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 and has
fewer than 100 beds. This final rule
affects small rural hospitals that furnish
SNF services under a swing-bed
agreement, or that have a hospital-based
SNF. We anticipate that the impact on
small rural hospitals will be similar to
the impact on SNF providers overall.
Section 202 of the UMRA 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 is approximately
$130 million. This final rule will not
have a substantial effect on State, local,
or tribal governments, or on private
sector costs.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates
regulations that impose substantial
direct requirement costs on State and
local governments, preempts State law,
or otherwise has Federalism
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implications. As stated above, this final
rule will have no substantial effect on
State and local governments.
B. Anticipated Effects
This final rule sets forth updates of
the SNF PPS rates contained in the FY
2008 final rule (72 FR 43412, August 3,
2007) and the associated correction
notices published on September 28,
2007 (72 FR 55085) and on November
30, 2008 (72 FR 67652). Based on the
above, we estimate the FY 2009 impact
would be a net increase of $780 million
in payments to SNFs. The impact
analysis of this final rule represents the
projected effects of the changes in the
SNF PPS from FY 2008 to FY 2009. We
estimate the effects by estimating
payments while holding all other
payment variables constant. We use the
best data available, but we do not
attempt to predict behavioral responses
to these changes, and we do not make
adjustments for future changes in such
variables as days or case-mix.
We note that certain events may
combine to limit the scope or accuracy
of our impact analysis, because an
analysis is future-oriented and, thus,
very susceptible to changes in provider
behavior related to such events as
newly-legislated general Medicare
program funding changes by the
Congress. Although these changes may
not be specific to the SNF PPS, the
nature of the Medicare program is that
the changes may interact, and the
complexity of the interaction of these
changes could make it difficult to
predict accurately the full scope of the
impact upon SNFs.
In accordance with section
1888(e)(4)(E) of the Act, we update the
payment rates for FY 2008 by a factor
equal to the full market basket index
percentage increase plus the FY 2007
forecast error adjustment to determine
the payment rates for FY 2009. The
special AIDS add-on established by
section 511 of the MMA remains in
effect until ‘‘* * * such date as the
Secretary certifies that there is an
appropriate adjustment in the case mix
* * *.’’ We have not provided a
separate impact analysis for this MMA
provision. Our latest estimates indicate
that there are less than 2,700
beneficiaries who qualify for the AIDS
add-on payment. The impact on
Medicare is included in the ‘‘total’’
column of Table 12. In updating the
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rates for FY 2009, we made a number of
standard annual revisions and
clarifications mentioned elsewhere in
this final rule (for example, the update
to the wage and market basket indexes
used for adjusting the Federal rates).
These revisions would increase
payments to SNFs by approximately
$780 million for FY 2009.
The impacts are shown in Table 12.
The breakdown of the various categories
of data in the table follows.
The first column shows the
breakdown of all SNFs by urban or rural
status, hospital-based or freestanding
status, and census region.
The first row of figures in the first
column describes the estimated effects
of the various changes on all facilities.
The next six rows show the effects on
facilities split by hospital-based,
freestanding, urban, and rural
categories. The urban and rural
designations are based on the location of
the facility under the CBSA designation.
The next twenty-two rows show the
effects on urban versus rural status by
census region.
The second column in the table shows
the number of facilities in the impact
database.
The third column of the table shows
the effect of the annual update to the
wage index. This represents the effect of
using the most recent wage data
available. The total impact of this
change is zero percent; however, there
are distributional effects of the change.
The fourth column shows the effect of
all of the changes on the FY 2009
payments. The market basket increase of
3.4 percentage points is constant for all
providers and, though not shown
individually, is included in the total
column. It is projected that aggregate
payments will increase by 3.4 percent,
assuming facilities do not change their
care delivery and billing practices in
response.
As can be seen from this table, the
effects of the changes vary by specific
types of providers and by location. For
example, all facilities experience
payment increases, however, some
providers (for example, those in the
urban Pacific region) show a greater
increase. In fact, payment increases for
facilities in the urban and rural Pacific
areas of the country are the highest for
any of the provider categories at 4.9
percent and 4.5 percent, respectively.
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TABLE 12—PROJECTED IMPACT TO THE SNF PPS FOR FY 2009
Number of
facilities
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Total .........................................................................................................................................................
Urban ................................................................................................................................................
Rural .................................................................................................................................................
Hospital based urban ...............................................................................................................................
Freestanding urban ..................................................................................................................................
Hospital based rural .................................................................................................................................
Freestanding rural ....................................................................................................................................
Urban by region:
New England ....................................................................................................................................
Middle Atlantic ..................................................................................................................................
South Atlantic ...................................................................................................................................
East North Central ............................................................................................................................
East South Central ...........................................................................................................................
West North Central ...........................................................................................................................
West South Central ..........................................................................................................................
Mountain ...........................................................................................................................................
Pacific ...............................................................................................................................................
Outlying .............................................................................................................................................
Rural by region:
New England ....................................................................................................................................
Middle Atlantic ..................................................................................................................................
South Atlantic ...................................................................................................................................
East North Central ............................................................................................................................
East South Central ...........................................................................................................................
West North Central ...........................................................................................................................
West South Central ..........................................................................................................................
Mountain ...........................................................................................................................................
Pacific ...............................................................................................................................................
Outlying .............................................................................................................................................
Ownership:
Government ......................................................................................................................................
Proprietary ........................................................................................................................................
Voluntary ...........................................................................................................................................
We received one comment on the
regulatory impact section. The comment
and our response to the comment is as
follows:
Comment: One commenter asserted
that the regulatory impact analysis
understates the effects of the policy
changes associated with the proposed
recalibration of the case-mix weights (as
discussed in the FY 2009 SNF PPS
proposed rule) on state and local
governments, as well as small entities.
The commenter stated that the loss of
tax revenues for State and local
governments will be substantial.
Response: As we have decided not to
pursue the recalibration of the case-mix
weights at this time, SNFs will see an
increase of approximately 3.4 percent in
their payments. However, should we
decide to recalibrate the case-mix
weights in the future, we wish to make
clear that the law and regulations that
govern SNF payment rate updates do
not provide for considering indirect
effects, induced effects, or ripple effects
on economic activity. Moreover, as such
secondary effects, if any, would occur
within the context of a dynamic,
market-based economy, we expect that
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the market would properly adjust its
economic resources in reaction to the
appropriately recalibrated SNF PPS
payments. For these reasons, we believe
that the regulatory impact analysis
adequately estimates the proposed rule’s
economic impact.
C. Alternatives Considered
Section 1888(e) of the Act establishes
the SNF PPS for the payment of
Medicare SNF services for cost reporting
periods beginning on or after July 1,
1998. This section of the statute
prescribes a detailed formula for
calculating payment rates under the
SNF PPS, and does not provide for the
use of any alternative methodology. It
specifies that the base year cost data to
be used for computing the SNF PPS
payment rates must be from FY 1995
(October 1, 1994, through September 30,
1995). In accordance with the statute,
we also incorporated a number of
elements into the SNF PPS (for example,
case-mix classification methodology, the
MDS assessment schedule, a market
basket index, a wage index, and the
urban and rural distinction used in the
development or adjustment of the
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Updated
wage data
(percent)
Total FY
2009
change
(percent)
15,373
10,497
4,876
1,528
8,969
1,154
3,722
0.0
0.0
0.0
¥0.1
0.0
0.0
0.0
3.4
3.4
3.4
3.3
3.4
3.4
3.4
840
1,490
1,734
2,010
530
827
1,166
472
1,420
8
0.2
¥0.5
¥0.3
¥0.5
0.0
0.6
0.2
0.0
1.5
0.6
3.6
2.9
3.1
2.9
3.4
4.0
3.6
3.4
4.9
4.0
150
257
603
940
552
1,144
821
259
148
2
¥1.8
¥0.2
0.0
¥0.6
0.3
0.5
0.5
¥0.1
1.1
0.4
1.6
3.2
3.4
2.8
3.7
4.0
3.9
3.3
4.5
3.9
665
11,286
3,422
¥0.1
0.0
¥0.1
3.3
3.4
3.3
Federal rates). Further, section
1888(e)(4)(H) of the Act specifically
requires us to disseminate the payment
rates for each new FY through the
Federal Register, and to do so before the
August 1 that precedes the start of the
new FY. Accordingly, we are not
pursuing alternatives with respect to the
payment methodology as discussed
above.
In finalizing our decision on the
proposed FY 2009 recalibration of the
case-mix adjustment, we reviewed the
options considered in the proposed rule
and took into consideration comments
received during the public comment
period as discussed in the preamble.
Although the 2001 data were the best
source available at the time the FY 2006
refinements were introduced, the
distribution of paid days, a key
component in adjusting the RUG–53
case-mix weights, was based solely on
estimated utilization. The 2006 data
provide a more recent and a more
accurate source of RUG–53 utilization
based on actual utilization, and are an
appropriate source to use for case-mix
adjustment. However, in light of the
potential ramifications of this proposal
E:\FR\FM\08AUR3.SGM
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and the complexity of the issues
involved, we believe that it would be
prudent to take additional time to
evaluate the proposal in order to further
consider consequences that may result
from it. Accordingly, we are not
proceeding with the proposed
recalibration at this time, pending
further analysis. We note that as we
continue to evaluate this issue, we fully
expect to implement such an adjustment
in the future.
D. Accounting Statement
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/omb/circulars/
a004/a-4.pdf), in Table 13 below, we
have prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of this final rule. This table
provides our best estimate of the change
in Medicare payments under the SNF
PPS as a result of the policies in this
final rule based on the data for 15,373
SNFs in our database. All expenditures
are classified as transfers to Medicare
providers (that is, SNFs).
TABLE 13—ACCOUNTING STATEMENT:
CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM THE 2008 SNF
PPS FISCAL YEAR TO THE 2009
SNF PPS FISCAL YEAR
[In millions]
Category
Transfers
Annualized Monetized
Transfers.
From Whom to
Whom?
areas will experience a 3.4 percent
increase in estimated payments
compared with FY 2008. Providers in
the urban Pacific region and the rural
Pacific region show the greatest
increases in payments of 4.9 percent
and 4.5 percent, respectively.
Finally, 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 413
Health facilities, Kidney diseases,
Medicare, Reporting and recordkeeping
requirements.
I For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR
chapter IV as follows:
PART 413—PRINCIPLES OF
REASONABLE COST
REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE
SERVICES; PROSPECTIVELY
DETERMINED PAYMENT RATES FOR
SKILLED NURSING FACILITIES
1. The authority citation for part 413
continues to read as follows:
I
Authority: Secs. 1102, 1812(d), 1814(b),
1815, 1833(a), (i), and (n), 1861(v), 1871,
1881, 1883, and 1886 of the Social Security
Act (42 U.S.C. 1302, 1395d(d), 1395f(b),
1395g, 1395l(a), (i), and (n), 1395x(v),
1395hh, 1395rr, 1395tt, and 1395ww); and
sec. 124 of Public Law 106–133 (113 Stat.
1501A–332).
Subpart J—Prospective Payment for
Skilled Nursing Facilities
$780 million.
Federal Government
to SNF Medicare
Providers.
2. In § 413.333, the definitions of the
terms ‘‘rural area’’ and ‘‘urban area’’ are
revised to read as follows:
I
§ 413.333
E. Conclusion
Overall estimated payments for SNFs
in FY 2009 are projected to increase by
$780 million dollars compared with
those in FY 2008. We estimate that
SNFs in urban areas will experience a
positive change of 3.4 percent in
estimated payments compared with FY
2008. We estimate that SNFs in rural
Definitions.
*
*
*
*
*
Rural area means, for services
provided on or after July 1, 1998, but
before October 1, 2005, an area as
defined in § 412.62(f)(1)(iii) of this
chapter. For services provided on or
after October 1, 2005, rural area means
an area as defined in § 412.64(b)(1)(ii)(C)
of this chapter.
Urban area means, for services
provided on or after July 1, 1998, but
before October 1, 2005, an area as
defined in § 412.62(f)(1)(ii) of this
chapter. For services provided on or
after October 1, 2005, urban area means
an area as defined in
§ 412.64(b)(1)(ii)(A) and
§ 412.64(b)(1)(ii)(B) of this chapter.
§ 413.335
[Amended]
3. Section 413.335 is amended by
revising paragraph (b) to read as follows:
I
§ 413.335
Basis of payment.
*
*
*
*
*
(b) Payment in full. (1) The payment
rates represent payment in full (subject
to applicable coinsurance as described
in subpart G of part 409 of this chapter)
for all costs (routine, ancillary, and
capital-related) associated with
furnishing inpatient SNF services to
Medicare beneficiaries other than costs
associated with approved educational
activities as described in § 413.85.
(2) In addition to the Federal per diem
payment amounts, SNFs receive
payment for bad debts of Medicare
beneficiaries, as specified in § 413.89 of
this part.
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance Program; and No. 93.774,
Medicare—Supplementary Medical
Insurance Program)
Dated: July 18, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Dated: July 31, 2008.
Michael O. Leavitt,
Secretary.
[Note: The following Addendum will
not appear in the Code of Federal
Regulations]
Addendum—FY 2009 CBSA Wage
Index Tables
In this addendum, we provide the wage
index tables referred to in the preamble to
this final rule. Tables 8 and 9 display the
CBSA-based wage index values for urban and
rural providers.
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS
Urban area (constituent counties)
10180 .......
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Abilene, TX ........................................................................................................................................................................
Callahan County, TX
Jones County, TX
Taylor County, TX
´
Aguadilla-Isabela-San Sebastian, PR ...............................................................................................................................
Aguada Municipio, PR
Aguadilla Municipio, PR
˜
Anasco Municipio, PR
Isabela Municipio, PR
Lares Municipio, PR
10380 .......
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46441
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
10420 .......
10500 .......
10580 .......
10740 .......
10780 .......
10900 .......
11020 .......
11100 .......
11180 .......
11260 .......
11300 .......
11340 .......
11460 .......
11500 .......
11540 .......
11700 .......
12020 .......
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Moca Municipio, PR
´
Rincon Municipio, PR
´
San Sebastian Municipio, PR
Akron, OH .........................................................................................................................................................................
Portage County, OH
Summit County, OH
Albany, GA ........................................................................................................................................................................
Baker County, GA
Dougherty County, GA
Lee County, GA
Terrell County, GA
Worth County, GA
Albany-Schenectady-Troy, NY ..........................................................................................................................................
Albany County, NY
Rensselaer County, NY
Saratoga County, NY
Schenectady County, NY
Schoharie County, NY
Albuquerque, NM ..............................................................................................................................................................
Bernalillo County, NM
Sandoval County, NM
Torrance County, NM
Valencia County, NM
Alexandria, LA ...................................................................................................................................................................
Grant Parish, LA
Rapides Parish, LA
Allentown-Bethlehem-Easton, PA-NJ ...............................................................................................................................
Warren County, NJ
Carbon County, PA
Lehigh County, PA
Northampton County, PA
Altoona, PA .......................................................................................................................................................................
Blair County, PA
Amarillo, TX .......................................................................................................................................................................
Armstrong County, TX
Carson County, TX
Potter County, TX
Randall County, TX
Ames, IA ............................................................................................................................................................................
Story County, IA
Anchorage, AK ..................................................................................................................................................................
Anchorage Municipality, AK
Matanuska-Susitna Borough, AK
Anderson, IN .....................................................................................................................................................................
Madison County, IN
Anderson, SC ....................................................................................................................................................................
Anderson County, SC
Ann Arbor, MI ....................................................................................................................................................................
Washtenaw County, MI
Anniston-Oxford, AL ..........................................................................................................................................................
Calhoun County, AL
Appleton, WI ......................................................................................................................................................................
Calumet County, WI
Outagamie County, WI
Asheville, NC .....................................................................................................................................................................
Buncombe County, NC
Haywood County, NC
Henderson County, NC
Madison County, NC
Athens-Clarke County, GA ................................................................................................................................................
Clarke County, GA
Madison County, GA
Oconee County, GA
Oglethorpe County, GA
Atlanta-Sandy Springs-Marietta, GA .................................................................................................................................
Barrow County, GA
Bartow County, GA
Butts County, GA
Carroll County, GA
Cherokee County, GA
Clayton County, GA
Cobb County, GA
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0.8917
0.8703
0.8707
0.9210
0.8130
0.9499
0.8521
0.8927
0.9487
1.1931
0.8760
0.9570
1.0445
0.7927
0.9440
0.9142
0.9591
0.9754
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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
12100 .......
12220 .......
12260 .......
12420 .......
12540 .......
12580 .......
12620 .......
12700 .......
12940 .......
12980 .......
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13020 .......
13140 .......
13380 .......
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Urban area (constituent counties)
Wage index
Coweta County, GA
Dawson County, GA
DeKalb County, GA
Douglas County, GA
Fayette County, GA
Forsyth County, GA
Fulton County, GA
Gwinnett County, GA
Haralson County, GA
Heard County, GA
Henry County, GA
Jasper County, GA
Lamar County, GA
Meriwether County, GA
Newton County, GA
Paulding County, GA
Pickens County, GA
Pike County, GA
Rockdale County, GA
Spalding County, GA
Walton County, GA
Atlantic City-Hammonton, NJ ............................................................................................................................................
Atlantic County, NJ
Auburn-Opelika, AL ...........................................................................................................................................................
Lee County, AL
Augusta-Richmond County, GA-SC ..................................................................................................................................
Burke County, GA
Columbia County, GA
McDuffie County, GA
Richmond County, GA
Aiken County, SC
Edgefield County, SC
Austin-Round Rock, TX ....................................................................................................................................................
Bastrop County, TX
Caldwell County, TX
Hays County, TX
Travis County, TX
Williamson County, TX
Bakersfield, CA .................................................................................................................................................................
Kern County, CA
Baltimore-Towson, MD ......................................................................................................................................................
Anne Arundel County, MD
Baltimore County, MD
Carroll County, MD
Harford County, MD
Howard County, MD
Queen Anne’s County, MD
Baltimore City, MD
Bangor, ME .......................................................................................................................................................................
Penobscot County, ME
Barnstable Town, MA ........................................................................................................................................................
Barnstable County, MA
Baton Rouge, LA ...............................................................................................................................................................
Ascension Parish, LA
East Baton Rouge Parish, LA
East Feliciana Parish, LA
Iberville Parish, LA
Livingston Parish, LA
Pointe Coupee Parish, LA
St. Helena Parish, LA
West Baton Rouge Parish, LA
West Feliciana Parish, LA
Battle Creek, MI ................................................................................................................................................................
Calhoun County, MI
Bay City, MI .......................................................................................................................................................................
Bay County, MI
Beaumont-Port Arthur, TX ................................................................................................................................................
Hardin County, TX
Jefferson County, TX
Orange County, TX
Bellingham, WA .................................................................................................................................................................
Whatcom County, WA
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1.1973
0.7544
0.9615
0.9536
1.1189
1.0055
1.0174
1.2643
0.8163
1.0120
0.9248
0.8479
1.1640
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46443
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
13460 .......
Bend, OR ..........................................................................................................................................................................
Deschutes County, OR
Bethesda-Frederick-Gaithersburg, MD .............................................................................................................................
Frederick County, MD
Montgomery County, MD
Billings, MT ........................................................................................................................................................................
Carbon County, MT
Yellowstone County, MT
Binghamton, NY ................................................................................................................................................................
Broome County, NY
Tioga County, NY
Birmingham-Hoover, AL ....................................................................................................................................................
Bibb County, AL
Blount County, AL
Chilton County, AL
Jefferson County, AL
St. Clair County, AL
Shelby County, AL
Walker County, AL
Bismarck, ND ....................................................................................................................................................................
Burleigh County, ND
Morton County, ND
Blacksburg-Christiansburg-Radford, VA ...........................................................................................................................
Giles County, VA
Montgomery County, VA
Pulaski County, VA
Radford City, VA
Bloomington, IN .................................................................................................................................................................
Greene County, IN
Monroe County, IN
Owen County, IN
Bloomington-Normal, IL ....................................................................................................................................................
McLean County, IL
Boise City-Nampa, ID .......................................................................................................................................................
Ada County, ID
Boise County, ID
Canyon County, ID
Gem County, ID
Owyhee County, ID
Boston-Quincy, MA ...........................................................................................................................................................
Norfolk County, MA
Plymouth County, MA
Suffolk County, MA
Boulder, CO ......................................................................................................................................................................
Boulder County, CO
Bowling Green, KY ............................................................................................................................................................
Edmonson County, KY
Warren County, KY
Bradenton-Sarasota-Venice, FL ........................................................................................................................................
Manatee County, FL
Sarasota County, FL
Bremerton-Silverdale, WA .................................................................................................................................................
Kitsap County, WA
Bridgeport-Stamford-Norwalk, CT .....................................................................................................................................
Fairfield County, CT
Brownsville-Harlingen, TX .................................................................................................................................................
Cameron County, TX
Brunswick, GA ...................................................................................................................................................................
Brantley County, GA
Glynn County, GA
McIntosh County, GA
Buffalo-Niagara Falls, NY .................................................................................................................................................
Erie County, NY
Niagara County, NY
Burlington, NC ...................................................................................................................................................................
Alamance County, NC
Burlington-South Burlington, VT .......................................................................................................................................
Chittenden County, VT
Franklin County, VT
Grand Isle County, VT
Cambridge-Newton-Framingham, MA ...............................................................................................................................
Middlesex County, MA
13644 .......
13740 .......
13780 .......
13820 .......
13900 .......
13980 .......
14020 .......
14060 .......
14260 .......
14484 .......
14500 .......
14540 .......
14600 .......
14740 .......
14860 .......
15180 .......
15260 .......
15380 .......
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15540 .......
15764 .......
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08AUR3
1.1375
1.0548
0.8805
0.8574
0.8792
0.7148
0.8155
0.8979
0.9323
0.9268
1.1897
1.0302
0.8388
0.9900
1.0770
1.2868
0.8916
0.9567
0.9537
0.8736
0.9254
1.1086
46444
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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
15804 .......
Camden, NJ ......................................................................................................................................................................
Burlington County, NJ
Camden County, NJ
Gloucester County, NJ
Canton-Massillon, OH .......................................................................................................................................................
Carroll County, OH
Stark County, OH
Cape Coral-Fort Myers, FL ...............................................................................................................................................
Lee County, FL
Carson City, NV ................................................................................................................................................................
Carson City, NV
Casper, WY .......................................................................................................................................................................
Natrona County, WY
Cedar Rapids, IA ...............................................................................................................................................................
Benton County, IA
Jones County, IA
Linn County, IA
Champaign-Urbana, IL ......................................................................................................................................................
Champaign County, IL
Ford County, IL
Piatt County, IL
Charleston, WV .................................................................................................................................................................
Boone County, WV
Clay County, WV
Kanawha County, WV
Lincoln County, WV
Putnam County, WV
Charleston-North Charleston-Summerville, SC ................................................................................................................
Berkeley County, SC
Charleston County, SC
Dorchester County, SC
Charlotte-Gastonia-Concord, NC-SC ................................................................................................................................
Anson County, NC
Cabarrus County, NC
Gaston County, NC
Mecklenburg County, NC
Union County, NC
York County, SC
Charlottesville, VA .............................................................................................................................................................
Albemarle County, VA
Fluvanna County, VA
Greene County, VA
Nelson County, VA
Charlottesville City, VA
Chattanooga, TN-GA ........................................................................................................................................................
Catoosa County, GA
Dade County, GA
Walker County, GA
Hamilton County, TN
Marion County, TN
Sequatchie County, TN
Cheyenne, WY ..................................................................................................................................................................
Laramie County, WY
Chicago-Naperville-Joliet, IL .............................................................................................................................................
Cook County, IL
DeKalb County, IL
DuPage County, IL
Grundy County, IL
Kane County, IL
Kendall County, IL
McHenry County, IL
Will County, IL
Chico, CA ..........................................................................................................................................................................
Butte County, CA
Cincinnati-Middletown, OH-KY-IN .....................................................................................................................................
Dearborn County, IN
Franklin County, IN
Ohio County, IN
Boone County, KY
Bracken County, KY
Campbell County, KY
Gallatin County, KY
15940 .......
15980 .......
16180 .......
16220 .......
16300 .......
16580 .......
16620 .......
16700 .......
16740 .......
16820 .......
16860 .......
16940 .......
16974 .......
17020 .......
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1.0346
0.8841
0.9396
1.0128
0.9579
0.8919
0.9461
0.8275
0.9209
0.9595
0.9816
0.8878
0.9276
1.0399
1.0897
0.9687
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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
17300 .......
17420 .......
17460 .......
17660 .......
17780 .......
17820 .......
17860 .......
17900 .......
17980 .......
18020 .......
18140 .......
18580 .......
18700 .......
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19060 .......
19124 .......
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Urban area (constituent counties)
Wage index
Grant County, KY
Kenton County, KY
Pendleton County, KY
Brown County, OH
Butler County, OH
Clermont County, OH
Hamilton County, OH
Warren County, OH
Clarksville, TN-KY .............................................................................................................................................................
Christian County, KY
Trigg County, KY
Montgomery County, TN
Stewart County, TN
Cleveland, TN ...................................................................................................................................................................
Bradley County, TN
Polk County, TN
Cleveland-Elyria-Mentor, OH ............................................................................................................................................
Cuyahoga County, OH
Geauga County, OH
Lake County, OH
Lorain County, OH
Medina County, OH
Coeur d’Alene, ID ..............................................................................................................................................................
Kootenai County, ID
College Station-Bryan, TX ................................................................................................................................................
Brazos County, TX
Burleson County, TX
Robertson County, TX
Colorado Springs, CO .......................................................................................................................................................
El Paso County, CO
Teller County, CO
Columbia, MO ...................................................................................................................................................................
Boone County, MO
Howard County, MO
Columbia, SC ....................................................................................................................................................................
Calhoun County, SC
Fairfield County, SC
Kershaw County, SC
Lexington County, SC
Richland County, SC
Saluda County, SC
Columbus, GA-AL .............................................................................................................................................................
Russell County, AL
Chattahoochee County, GA
Harris County, GA
Marion County, GA
Muscogee County, GA
Columbus, IN ....................................................................................................................................................................
Bartholomew County, IN
Columbus, OH ...................................................................................................................................................................
Delaware County, OH
Fairfield County, OH
Franklin County, OH
Licking County, OH
Madison County, OH
Morrow County, OH
Pickaway County, OH
Union County, OH
Corpus Christi, TX .............................................................................................................................................................
Aransas County, TX
Nueces County, TX
San Patricio County, TX
Corvallis, OR .....................................................................................................................................................................
Benton County, OR
Cumberland, MD-WV ........................................................................................................................................................
Allegany County, MD
Mineral County, WV
Dallas-Plano-Irving, TX .....................................................................................................................................................
Collin County, TX
Dallas County, TX
Delta County, TX
Denton County, TX
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0.8010
0.9241
0.9322
0.9346
0.9977
0.8540
0.8933
0.8739
0.9739
0.9943
0.8598
1.1304
0.7816
0.9945
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CBSA code
19140 .......
19180 .......
19260 .......
19340 .......
19380 .......
19460 .......
19500 .......
19660 .......
19740 .......
19780 .......
19804 .......
20020 .......
20100 .......
20220 .......
20260 .......
20500 .......
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20764 .......
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Ellis County, TX
Hunt County, TX
Kaufman County, TX
Rockwall County, TX
Dalton, GA .........................................................................................................................................................................
Murray County, GA
Whitfield County, GA
Danville, IL ........................................................................................................................................................................
Vermilion County, IL
Danville, VA .......................................................................................................................................................................
Pittsylvania County, VA
Danville City, VA
Davenport-Moline-Rock Island, IA-IL ................................................................................................................................
Henry County, IL
Mercer County, IL
Rock Island County, IL
Scott County, IA
Dayton, OH .......................................................................................................................................................................
Greene County, OH
Miami County, OH
Montgomery County, OH
Preble County, OH
Decatur, AL .......................................................................................................................................................................
Lawrence County, AL
Morgan County, AL
Decatur, IL .........................................................................................................................................................................
Macon County, IL
Deltona-Daytona Beach-Ormond Beach, FL ....................................................................................................................
Volusia County, FL
Denver-Aurora, CO ...........................................................................................................................................................
Adams County, CO
Arapahoe County, CO
Broomfield County, CO
Clear Creek County, CO
Denver County, CO
Douglas County, CO
Elbert County, CO
Gilpin County, CO
Jefferson County, CO
Park County, CO
Des Moines-West Des Moines, IA ....................................................................................................................................
Dallas County, IA
Guthrie County, IA
Madison County, IA
Polk County, IA
Warren County, IA
Detroit-Livonia-Dearborn, MI .............................................................................................................................................
Wayne County, MI
Dothan, AL ........................................................................................................................................................................
Geneva County, AL
Henry County, AL
Houston County, AL
Dover, DE ..........................................................................................................................................................................
Kent County, DE
Dubuque, IA ......................................................................................................................................................................
Dubuque County, IA
Duluth, MN-WI ...................................................................................................................................................................
Carlton County, MN
St. Louis County, MN
Douglas County, WI
Durham, NC ......................................................................................................................................................................
Chatham County, NC
Durham County, NC
Orange County, NC
Person County, NC
Eau Claire, WI ...................................................................................................................................................................
Chippewa County, WI
Eau Claire County, WI
Edison-New Brunswick, NJ ...............................................................................................................................................
Middlesex County, NJ
Monmouth County, NJ
Ocean County, NJ
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0.9374
0.8395
0.8435
0.9203
0.7803
0.8145
0.8890
1.0818
0.9535
0.9958
0.7613
1.0325
0.8380
1.0363
0.9732
0.9668
1.1283
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
20940 .......
21060 .......
21140 .......
21300 .......
21340 .......
21500 .......
21660 .......
21780 .......
21820 .......
21940 .......
22020 .......
22140 .......
22180 .......
22220 .......
22380 .......
22420 .......
22500 .......
22520 .......
22540 .......
22660 .......
22744 .......
22900 .......
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23060 .......
23104 .......
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Somerset County, NJ
El Centro, CA ....................................................................................................................................................................
Imperial County, CA
Elizabethtown, KY .............................................................................................................................................................
Hardin County, KY
Larue County, KY
Elkhart-Goshen, IN ............................................................................................................................................................
Elkhart County, IN
Elmira, NY .........................................................................................................................................................................
Chemung County, NY
El Paso, TX .......................................................................................................................................................................
El Paso County, TX
Erie, PA .............................................................................................................................................................................
Erie County, PA
Eugene-Springfield, OR ....................................................................................................................................................
Lane County, OR
Evansville, IN-KY ..............................................................................................................................................................
Gibson County, IN
Posey County, IN
Vanderburgh County, IN
Warrick County, IN
Henderson County, KY
Webster County, KY
Fairbanks, AK ....................................................................................................................................................................
Fairbanks North Star Borough, AK
Fajardo, PR .......................................................................................................................................................................
Ceiba Municipio, PR
Fajardo Municipio, PR
Luquillo Municipio, PR
Fargo, ND-MN ...................................................................................................................................................................
Cass County, ND
Clay County, MN
Farmington, NM ................................................................................................................................................................
San Juan County, NM
Fayetteville, NC .................................................................................................................................................................
Cumberland County, NC
Hoke County, NC
Fayetteville-Springdale-Rogers, AR-MO ...........................................................................................................................
Benton County, AR
Madison County, AR
Washington County, AR
McDonald County, MO
Flagstaff, AZ ......................................................................................................................................................................
Coconino County, AZ
Flint, MI .............................................................................................................................................................................
Genesee County, MI
Florence, SC .....................................................................................................................................................................
Darlington County, SC
Florence County, SC
Florence-Muscle Shoals, AL .............................................................................................................................................
Colbert County, AL
Lauderdale County, AL
Fond du Lac, WI ...............................................................................................................................................................
Fond du Lac County, WI
Fort Collins-Loveland, CO .................................................................................................................................................
Larimer County, CO
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL ....................................................................................................
Broward County, FL
Fort Smith, AR-OK ............................................................................................................................................................
Crawford County, AR
Franklin County, AR
Sebastian County, AR
Le Flore County, OK
Sequoyah County, OK
Fort Walton Beach-Crestview-Destin, FL ..........................................................................................................................
Okaloosa County, FL
Fort Wayne, IN ..................................................................................................................................................................
Allen County, IN
Wells County, IN
Whitley County, IN
Fort Worth-Arlington, TX ...................................................................................................................................................
Johnson County, TX
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0.9568
0.8247
0.8694
0.8713
1.1061
0.8690
1.1297
0.4061
0.8166
0.8051
0.9340
0.8970
1.1743
1.1425
0.8130
0.7871
0.9293
0.9867
0.9946
0.7697
0.8769
0.9176
0.9709
46448
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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
23420 .......
23460 .......
23540 .......
23580 .......
23844 .......
24020 .......
24140 .......
24220 .......
24300 .......
24340 .......
24500 .......
24540 .......
24580 .......
24660 .......
24780 .......
24860 .......
25020 .......
25060 .......
25180 .......
25260 .......
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25500 .......
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Wage index
Parker County, TX
Tarrant County, TX
Wise County, TX
Fresno, CA ........................................................................................................................................................................
Fresno County, CA
Gadsden, AL .....................................................................................................................................................................
Etowah County, AL
Gainesville, FL ..................................................................................................................................................................
Alachua County, FL
Gilchrist County, FL
Gainesville, GA .................................................................................................................................................................
Hall County, GA
Gary, IN .............................................................................................................................................................................
Jasper County, IN
Lake County, IN
Newton County, IN
Porter County, IN
Glens Falls, NY .................................................................................................................................................................
Warren County, NY
Washington County, NY
Goldsboro, NC ..................................................................................................................................................................
Wayne County, NC
Grand Forks, ND-MN ........................................................................................................................................................
Polk County, MN
Grand Forks County, ND
Grand Junction, CO ..........................................................................................................................................................
Mesa County, CO
Grand Rapids-Wyoming, MI ..............................................................................................................................................
Barry County, MI
Ionia County, MI
Kent County, MI
Newaygo County, MI
Great Falls, MT .................................................................................................................................................................
Cascade County, MT
Greeley, CO ......................................................................................................................................................................
Weld County, CO
Green Bay, WI ..................................................................................................................................................................
Brown County, WI
Kewaunee County, WI
Oconto County, WI
Greensboro-High Point, NC ..............................................................................................................................................
Guilford County, NC
Randolph County, NC
Rockingham County, NC
Greenville, NC ...................................................................................................................................................................
Greene County, NC
Pitt County, NC
Greenville-Mauldin-Easley, SC .........................................................................................................................................
Greenville County, SC
Laurens County, SC
Pickens County, SC
Guayama, PR ....................................................................................................................................................................
Arroyo Municipio, PR
Guayama Municipio, PR
Patillas Municipio, PR
Gulfport-Biloxi, MS ............................................................................................................................................................
Hancock County, MS
Harrison County, MS
Stone County, MS
Hagerstown-Martinsburg, MD-WV ....................................................................................................................................
Washington County, MD
Berkeley County, WV
Morgan County, WV
Hanford-Corcoran, CA ......................................................................................................................................................
Kings County, CA
Harrisburg-Carlisle, PA .....................................................................................................................................................
Cumberland County, PA
Dauphin County, PA
Perry County, PA
Harrisonburg, VA ...............................................................................................................................................................
Rockingham County, VA
Harrisonburg City, VA
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0.7983
0.9312
0.9109
0.9250
0.8473
0.9143
0.7565
0.9812
0.9184
0.8784
0.9684
0.9709
0.9011
0.9448
0.9961
0.3249
0.9029
0.8997
1.0870
0.9153
0.8894
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
25540 .......
Hartford-West Hartford-East Hartford, CT ........................................................................................................................
Hartford County, CT
Middlesex County, CT
Tolland County, CT
Hattiesburg, MS ................................................................................................................................................................
Forrest County, MS
Lamar County, MS
Perry County, MS
Hickory-Lenoir-Morganton, NC .........................................................................................................................................
Alexander County, NC
Burke County, NC
Caldwell County, NC
Catawba County, NC
Hinesville-Fort Stewart, GA 1 .............................................................................................................................................
Liberty County, GA
Long County, GA
Holland-Grand Haven, MI .................................................................................................................................................
Ottawa County, MI
Honolulu, HI ......................................................................................................................................................................
Honolulu County, HI
Hot Springs, AR ................................................................................................................................................................
Garland County, AR
Houma-Bayou Cane-Thibodaux, LA .................................................................................................................................
Lafourche Parish, LA
Terrebonne Parish, LA
Houston-Sugar Land-Baytown, TX ...................................................................................................................................
Austin County, TX
Brazoria County, TX
Chambers County, TX
Fort Bend County, TX
Galveston County, TX
Harris County, TX
Liberty County, TX
Montgomery County, TX
San Jacinto County, TX
Waller County, TX
Huntington-Ashland, WV-KY-OH ......................................................................................................................................
Boyd County, KY
Greenup County, KY
Lawrence County, OH
Cabell County, WV
Wayne County, WV
Huntsville, AL ....................................................................................................................................................................
Limestone County, AL
Madison County, AL
Idaho Falls, ID ...................................................................................................................................................................
Bonneville County, ID
Jefferson County, ID
Indianapolis-Carmel, IN .....................................................................................................................................................
Boone County, IN
Brown County, IN
Hamilton County, IN
Hancock County, IN
Hendricks County, IN
Johnson County, IN
Marion County, IN
Morgan County, IN
Putnam County, IN
Shelby County, IN
Iowa City, IA ......................................................................................................................................................................
Johnson County, IA
Washington County, IA
Ithaca, NY .........................................................................................................................................................................
Tompkins County, NY
Jackson, MI .......................................................................................................................................................................
Jackson County, MI
Jackson, MS ......................................................................................................................................................................
Copiah County, MS
Hinds County, MS
Madison County, MS
Rankin County, MS
Simpson County, MS
25620 .......
25860 .......
25980 .......
26100 .......
26180 .......
26300 .......
26380 .......
26420 .......
26580 .......
26620 .......
26820 .......
26900 .......
26980 .......
27060 .......
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27100 .......
27140 .......
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1.1069
0.7337
0.8976
0.9110
0.9008
1.1811
0.9113
0.7758
0.9838
0.9254
0.9082
0.9080
0.9908
0.9483
0.9614
0.9309
0.8067
46450
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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
27180 .......
Jackson, TN ......................................................................................................................................................................
Chester County, TN
Madison County, TN
Jacksonville, FL .................................................................................................................................................................
Baker County, FL
Clay County, FL
Duval County, FL
Nassau County, FL
St. Johns County, FL
Jacksonville, NC ................................................................................................................................................................
Onslow County, NC
Janesville, WI ....................................................................................................................................................................
Rock County, WI
Jefferson City, MO ............................................................................................................................................................
Callaway County, MO
Cole County, MO
Moniteau County, MO
Osage County, MO
Johnson City, TN ..............................................................................................................................................................
Carter County, TN
Unicoi County, TN
Washington County, TN
Johnstown, PA ..................................................................................................................................................................
Cambria County, PA
Jonesboro, AR ..................................................................................................................................................................
Craighead County, AR
Poinsett County, AR
Joplin, MO .........................................................................................................................................................................
Jasper County, MO
Newton County, MO
Kalamazoo-Portage, MI ....................................................................................................................................................
Kalamazoo County, MI
Van Buren County, MI
Kankakee-Bradley, IL ........................................................................................................................................................
Kankakee County, IL
Kansas City, MO-KS .........................................................................................................................................................
Franklin County, KS
Johnson County, KS
Leavenworth County, KS
Linn County, KS
Miami County, KS
Wyandotte County, KS
Bates County, MO
Caldwell County, MO
Cass County, MO
Clay County, MO
Clinton County, MO
Jackson County, MO
Lafayette County, MO
Platte County, MO
Ray County, MO
Kennewick-Pasco-Richland, WA .......................................................................................................................................
Benton County, WA
Franklin County, WA
Killeen-Temple-Fort Hood, TX ..........................................................................................................................................
Bell County, TX
Coryell County, TX
Lampasas County, TX
Kingsport-Bristol-Bristol, TN-VA ........................................................................................................................................
Hawkins County, TN
Sullivan County, TN
Bristol City, VA
Scott County, VA
Washington County, VA
Kingston, NY .....................................................................................................................................................................
Ulster County, NY
Knoxville, TN .....................................................................................................................................................................
Anderson County, TN
Blount County, TN
Knox County, TN
Loudon County, TN
Union County, TN
27260 .......
27340 .......
27500 .......
27620 .......
27740 .......
27780 .......
27860 .......
27900 .......
28020 .......
28100 .......
28140 .......
28420 .......
28660 .......
28700 .......
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28740 .......
28940 .......
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08AUR3
0.8523
0.8999
0.8177
0.9662
0.8775
0.7971
0.7920
0.7916
0.9406
1.0801
1.0485
0.9610
0.9911
0.8765
0.7743
0.9375
0.7881
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
46451
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
29020 .......
Kokomo, IN .......................................................................................................................................................................
Howard County, IN
Tipton County, IN
La Crosse, WI-MN ............................................................................................................................................................
Houston County, MN
La Crosse County, WI
Lafayette, IN ......................................................................................................................................................................
Benton County, IN
Carroll County, IN
Tippecanoe County, IN
Lafayette, LA .....................................................................................................................................................................
Lafayette Parish, LA
St. Martin Parish, LA
Lake Charles, LA ..............................................................................................................................................................
Calcasieu Parish, LA
Cameron Parish, LA
Lake County-Kenosha County, IL-WI ...............................................................................................................................
Lake County, IL
Kenosha County, WI
Lake Havasu City-Kingman, AZ ........................................................................................................................................
Mohave County, AZ
Lakeland-Winter Haven, FL ..............................................................................................................................................
Polk County, FL
Lancaster, PA ....................................................................................................................................................................
Lancaster County, PA
Lansing-East Lansing, MI .................................................................................................................................................
Clinton County, MI
Eaton County, MI
Ingham County, MI
Laredo, TX ........................................................................................................................................................................
Webb County, TX
Las Cruces, NM ................................................................................................................................................................
Dona Ana County, NM
Las Vegas-Paradise, NV ...................................................................................................................................................
Clark County, NV
Lawrence, KS ....................................................................................................................................................................
Douglas County, KS
Lawton, OK .......................................................................................................................................................................
Comanche County, OK
Lebanon, PA .....................................................................................................................................................................
Lebanon County, PA
Lewiston, ID-WA ...............................................................................................................................................................
Nez Perce County, ID
Asotin County, WA
Lewiston-Auburn, ME ........................................................................................................................................................
Androscoggin County, ME
Lexington-Fayette, KY .......................................................................................................................................................
Bourbon County, KY
Clark County, KY
Fayette County, KY
Jessamine County, KY
Scott County, KY
Woodford County, KY
Lima, OH ...........................................................................................................................................................................
Allen County, OH
Lincoln, NE ........................................................................................................................................................................
Lancaster County, NE
Seward County, NE
Little Rock-North Little Rock-Conway, AR ........................................................................................................................
Faulkner County, AR
Grant County, AR
Lonoke County, AR
Perry County, AR
Pulaski County, AR
Saline County, AR
Logan, UT-ID .....................................................................................................................................................................
Franklin County, ID
Cache County, UT
Longview, TX ....................................................................................................................................................................
Gregg County, TX
Rusk County, TX
Upshur County, TX
29100 .......
29140 .......
29180 .......
29340 .......
29404 .......
29420 .......
29460 .......
29540 .......
29620 .......
29700 .......
29740 .......
29820 .......
29940 .......
30020 .......
30140 .......
30300 .......
30340 .......
30460 .......
30620 .......
30700 .......
30780 .......
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30980 .......
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0.9349
0.9758
0.9221
0.8374
0.7556
1.0389
0.9797
0.8530
0.9363
0.9931
0.8366
0.8929
1.1971
0.8343
0.8211
0.8954
0.9465
0.9200
0.9110
0.9427
0.9759
0.8672
0.8765
0.8370
46452
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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
31020 .......
Longview, WA ...................................................................................................................................................................
Cowlitz County, WA
Los Angeles-Long Beach-Santa Ana, CA ........................................................................................................................
Los Angeles County, CA
Louisville-Jefferson County, KY-IN ...................................................................................................................................
Clark County, IN
Floyd County, IN
Harrison County, IN
Washington County, IN
Bullitt County, KY
Henry County, KY
Meade County, KY
Nelson County, KY
Oldham County, KY
Shelby County, KY
Spencer County, KY
Trimble County, KY
Lubbock, TX ......................................................................................................................................................................
Crosby County, TX
Lubbock County, TX
Lynchburg, VA ...................................................................................................................................................................
Amherst County, VA
Appomattox County, VA
Bedford County, VA
Campbell County, VA
Bedford City, VA
Lynchburg City, VA
Macon, GA ........................................................................................................................................................................
Bibb County, GA
Crawford County, GA
Jones County, GA
Monroe County, GA
Twiggs County, GA
Madera, CA .......................................................................................................................................................................
Madera County, CA
Madison, WI ......................................................................................................................................................................
Columbia County, WI
Dane County, WI
Iowa County, WI
Manchester-Nashua, NH ...................................................................................................................................................
Hillsborough County, NH
Mansfield, OH ...................................................................................................................................................................
Richland County, OH
¨
Mayaguez, PR ...................................................................................................................................................................
Hormigueros Municipio, PR
¨
Mayaguez Municipio, PR
McAllen-Edinburg-Mission, TX ..........................................................................................................................................
Hidalgo County, TX
Medford, OR ......................................................................................................................................................................
Jackson County, OR
Memphis, TN-MS-AR ........................................................................................................................................................
Crittenden County, AR
DeSoto County, MS
Marshall County, MS
Tate County, MS
Tunica County, MS
Fayette County, TN
Shelby County, TN
Tipton County, TN
Merced, CA .......................................................................................................................................................................
Merced County, CA
Miami-Miami Beach-Kendall, FL .......................................................................................................................................
Miami-Dade County, FL
Michigan City-La Porte, IN ................................................................................................................................................
LaPorte County, IN
Midland, TX .......................................................................................................................................................................
Midland County, TX
Milwaukee-Waukesha-West Allis, WI ................................................................................................................................
Milwaukee County, WI
Ozaukee County, WI
Washington County, WI
Waukesha County, WI
31084 .......
31140 .......
31180 .......
31340 .......
31420 .......
31460 .......
31540 .......
31700 .......
31900 .......
32420 .......
32580 .......
32780 .......
32820 .......
32900 .......
33124 .......
33140 .......
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33260 .......
33340 .......
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08AUR3
1.1207
1.2208
0.9249
0.8731
0.8774
0.9570
0.7939
1.0967
1.0359
0.9330
0.3940
0.9009
1.0244
0.9232
1.2243
0.9830
0.9159
0.9827
1.0080
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
46453
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
33460 .......
Minneapolis-St. Paul—Bloomington, MN-WI ....................................................................................................................
Anoka County, MN
Carver County, MN
Chisago County, MN
Dakota County, MN
Hennepin County, MN
Isanti County, MN
Ramsey County, MN
Scott County, MN
Sherburne County, MN
Washington County, MN
Wright County, MN
Pierce County, WI
St. Croix County, WI
Missoula, MT .....................................................................................................................................................................
Missoula County, MT
Mobile, AL .........................................................................................................................................................................
Mobile County, AL
Modesto, CA .....................................................................................................................................................................
Stanislaus County, CA
Monroe, LA ........................................................................................................................................................................
Ouachita Parish, LA
Union Parish, LA
Monroe, MI ........................................................................................................................................................................
Monroe County, MI
Montgomery, AL ................................................................................................................................................................
Autauga County, AL
Elmore County, AL
Lowndes County, AL
Montgomery County, AL
Morgantown, WV ...............................................................................................................................................................
Monongalia County, WV
Preston County, WV
Morristown, TN ..................................................................................................................................................................
Grainger County, TN
Hamblen County, TN
Jefferson County, TN
Mount Vernon-Anacortes, WA ..........................................................................................................................................
Skagit County, WA
Muncie, IN .........................................................................................................................................................................
Delaware County, IN
Muskegon-Norton Shores, MI ...........................................................................................................................................
Muskegon County, MI
Myrtle Beach-North Myrtle Beach-Conway, SC ................................................................................................................
Horry County, SC
Napa, CA ...........................................................................................................................................................................
Napa County, CA
Naples-Marco Island, FL ...................................................................................................................................................
Collier County, FL
Nashville-Davidson-Murfreesboro-Franklin, TN ................................................................................................................
Cannon County, TN
Cheatham County, TN
Davidson County, TN
Dickson County, TN
Hickman County, TN
Macon County, TN
Robertson County, TN
Rutherford County, TN
Smith County, TN
Sumner County, TN
Trousdale County, TN
Williamson County, TN
Wilson County, TN
Nassau-Suffolk, NY ...........................................................................................................................................................
Nassau County, NY
Suffolk County, NY
Newark-Union, NJ-PA .......................................................................................................................................................
Essex County, NJ
Hunterdon County, NJ
Morris County, NJ
Sussex County, NJ
Union County, NJ
33540 .......
33660 .......
33700 .......
33740 .......
33780 .......
33860 .......
34060 .......
34100 .......
34580 .......
34620 .......
34740 .......
34820 .......
34900 .......
34940 .......
34980 .......
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35004 .......
35084 .......
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1.1150
0.8973
0.7908
1.2194
0.7900
0.8941
0.8283
0.8528
0.7254
1.0292
0.8489
1.0055
0.8652
1.4520
0.9672
0.9504
1.2453
1.1731
46454
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
35300 .......
35380 .......
35644 .......
35660 .......
35980 .......
36084 .......
36100 .......
36140 .......
36220 .......
36260 .......
36420 .......
36500 .......
36540 .......
36740 .......
pwalker on PROD1PC71 with RULES3
36780 .......
36980 .......
37100 .......
VerDate Aug<31>2005
Urban area (constituent counties)
Wage index
Pike County, PA
New Haven-Milford, CT .....................................................................................................................................................
New Haven County, CT
New Orleans-Metairie-Kenner, LA ....................................................................................................................................
Jefferson Parish, LA
Orleans Parish, LA
Plaquemines Parish, LA
St. Bernard Parish, LA
St. Charles Parish, LA
St. John the Baptist Parish, LA
St. Tammany Parish, LA
New York-White Plains-Wayne, NY-NJ ............................................................................................................................
Bergen County, NJ
Hudson County, NJ
Passaic County, NJ
Bronx County, NY
Kings County, NY
New York County, NY
Putnam County, NY
Queens County, NY
Richmond County, NY
Rockland County, NY
Westchester County, NY
Niles-Benton Harbor, MI ...................................................................................................................................................
Berrien County, MI
Norwich-New London, CT .................................................................................................................................................
New London County, CT
Oakland-Fremont-Hayward, CA ........................................................................................................................................
Alameda County, CA
Contra Costa County, CA
Ocala, FL ...........................................................................................................................................................................
Marion County, FL
Ocean City, NJ ..................................................................................................................................................................
Cape May County, NJ
Odessa, TX .......................................................................................................................................................................
Ector County, TX
Ogden-Clearfield, UT ........................................................................................................................................................
Davis County, UT
Morgan County, UT
Weber County, UT
Oklahoma City, OK ...........................................................................................................................................................
Canadian County, OK
Cleveland County, OK
Grady County, OK
Lincoln County, OK
Logan County, OK
McClain County, OK
Oklahoma County, OK
Olympia, WA .....................................................................................................................................................................
Thurston County, WA
Omaha-Council Bluffs, NE-IA ...........................................................................................................................................
Harrison County, IA
Mills County, IA
Pottawattamie County, IA
Cass County, NE
Douglas County, NE
Sarpy County, NE
Saunders County, NE
Washington County, NE
Orlando-Kissimmee, FL ....................................................................................................................................................
Lake County, FL
Orange County, FL
Osceola County, FL
Seminole County, FL
Oshkosh-Neenah, WI ........................................................................................................................................................
Winnebago County, WI
Owensboro, KY .................................................................................................................................................................
Daviess County, KY
Hancock County, KY
McLean County, KY
Oxnard-Thousand Oaks-Ventura, CA ...............................................................................................................................
Ventura County, CA
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0.9103
1.2885
0.9066
1.1398
1.6092
0.8512
1.1496
0.9475
0.9153
0.8724
1.1537
0.9441
0.9111
0.9474
0.8685
1.1951
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
46455
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
37340 .......
Palm Bay-Melbourne-Titusville, FL ...................................................................................................................................
Brevard County, FL
Palm Coast, FL .................................................................................................................................................................
Flagler County, FL
Panama City-Lynn Haven, FL ...........................................................................................................................................
Bay County, FL
Parkersburg-Marietta-Vienna, WV-OH ..............................................................................................................................
Washington County, OH
Pleasants County, WV
Wirt County, WV
Wood County, WV
Pascagoula, MS ................................................................................................................................................................
George County, MS
Jackson County, MS
Peabody, MA .....................................................................................................................................................................
Essex County, MA
Pensacola-Ferry Pass-Brent, FL .......................................................................................................................................
Escambia County, FL
Santa Rosa County, FL
Peoria, IL ...........................................................................................................................................................................
Marshall County, IL
Peoria County, IL
Stark County, IL
Tazewell County, IL
Woodford County, IL
Philadelphia, PA ................................................................................................................................................................
Bucks County, PA
Chester County, PA
Delaware County, PA
Montgomery County, PA
Philadelphia County, PA
Phoenix-Mesa-Scottsdale, AZ ...........................................................................................................................................
Maricopa County, AZ
Pinal County, AZ
Pine Bluff, AR ....................................................................................................................................................................
Cleveland County, AR
Jefferson County, AR
Lincoln County, AR
Pittsburgh, PA ...................................................................................................................................................................
Allegheny County, PA
Armstrong County, PA
Beaver County, PA
Butler County, PA
Fayette County, PA
Washington County, PA
Westmoreland County, PA
Pittsfield, MA .....................................................................................................................................................................
Berkshire County, MA
Pocatello, ID ......................................................................................................................................................................
Bannock County, ID
Power County, ID
Ponce, PR .........................................................................................................................................................................
´
Juana Dıaz Municipio, PR
Ponce Municipio, PR
Villalba Municipio, PR
Portland-South Portland-Biddeford, ME ............................................................................................................................
Cumberland County, ME
Sagadahoc County, ME
York County, ME
Portland-Vancouver-Beaverton, OR-WA ..........................................................................................................................
Clackamas County, OR
Columbia County, OR
Multnomah County, OR
Washington County, OR
Yamhill County, OR
Clark County, WA
Skamania County, WA
Port St. Lucie, FL ..............................................................................................................................................................
Martin County, FL
St. Lucie County, FL
Poughkeepsie-Newburgh-Middletown, NY ........................................................................................................................
Dutchess County, NY
37380 .......
37460 .......
37620 .......
37700 .......
37764 .......
37860 .......
37900 .......
37964 .......
38060 .......
38220 .......
38300 .......
38340 .......
38540 .......
38660 .......
38860 .......
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38900 .......
38940 .......
39100 .......
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08AUR3
0.9332
0.8963
0.8360
0.7867
0.8102
1.0747
0.8242
0.9038
1.0979
1.0379
0.7926
0.8678
1.0445
0.9343
0.4289
0.9942
1.1456
0.9870
1.0920
46456
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
39140 .......
39300 .......
39340 .......
39380 .......
39460 .......
39540 .......
39580 .......
39660 .......
39740 .......
39820 .......
39900 .......
40060 .......
40140 .......
40220 .......
pwalker on PROD1PC71 with RULES3
40340 .......
40380 .......
VerDate Aug<31>2005
Urban area (constituent counties)
Wage index
Orange County, NY
Prescott, AZ ......................................................................................................................................................................
Yavapai County, AZ
Providence-New Bedford-Fall River, RI-MA .....................................................................................................................
Bristol County, MA
Bristol County, RI
Kent County, RI
Newport County, RI
Providence County, RI
Washington County, RI
Provo-Orem, UT ................................................................................................................................................................
Juab County, UT
Utah County, UT
Pueblo, CO ........................................................................................................................................................................
Pueblo County, CO
Punta Gorda, FL ...............................................................................................................................................................
Charlotte County, FL
Racine, WI .........................................................................................................................................................................
Racine County, WI
Raleigh-Cary, NC ..............................................................................................................................................................
Franklin County, NC
Johnston County, NC
Wake County, NC
Rapid City, SD ..................................................................................................................................................................
Meade County, SD
Pennington County, SD
Reading, PA ......................................................................................................................................................................
Berks County, PA
Redding, CA ......................................................................................................................................................................
Shasta County, CA
Reno-Sparks, NV ..............................................................................................................................................................
Storey County, NV
Washoe County, NV
Richmond, VA ...................................................................................................................................................................
Amelia County, VA
Caroline County, VA
Charles City County, VA
Chesterfield County, VA
Cumberland County, VA
Dinwiddie County, VA
Goochland County, VA
Hanover County, VA
Henrico County, VA
King and Queen County, VA
King William County, VA
Louisa County, VA
New Kent County, VA
Powhatan County, VA
Prince George County, VA
Sussex County, VA
Colonial Heights City, VA
Hopewell City, VA
Petersburg City, VA
Richmond City, VA
Riverside-San Bernardino-Ontario, CA .............................................................................................................................
Riverside County, CA
San Bernardino County, CA
Roanoke, VA .....................................................................................................................................................................
Botetourt County, VA
Craig County, VA
Franklin County, VA
Roanoke County, VA
Roanoke City, VA
Salem City, VA
Rochester, MN ..................................................................................................................................................................
Dodge County, MN
Olmsted County, MN
Wabasha County, MN
Rochester, NY ...................................................................................................................................................................
Livingston County, NY
Monroe County, NY
Ontario County, NY
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0.9381
0.8713
0.8976
0.9054
0.9817
0.9598
0.9242
1.3731
1.0317
0.9363
1.1468
0.8660
1.1214
0.8811
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
46457
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
40420 .......
40484 .......
40580 .......
40660 .......
40900 .......
40980 .......
41060 .......
41100 .......
41140 .......
41180 .......
41420 .......
41500 .......
41540 .......
41620 .......
41660 .......
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41700 .......
41740 .......
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Urban area (constituent counties)
Wage index
Orleans County, NY
Wayne County, NY
Rockford, IL .......................................................................................................................................................................
Boone County, IL
Winnebago County, IL
Rockingham County, NH ..................................................................................................................................................
Strafford County, NH
Rocky Mount, NC ..............................................................................................................................................................
Edgecombe County, NC
Nash County, NC
Rome, GA .........................................................................................................................................................................
Floyd County, GA
Sacramento—Arden-Arcade—Roseville, CA ....................................................................................................................
El Dorado County, CA
Placer County, CA
Sacramento County, CA
Yolo County, CA
Saginaw-Saginaw Township North, MI .............................................................................................................................
Saginaw County, MI
St. Cloud, MN ....................................................................................................................................................................
Benton County, MN
Stearns County, MN
St. George, UT ..................................................................................................................................................................
Washington County, UT
St. Joseph, MO-KS ...........................................................................................................................................................
Doniphan County, KS
Andrew County, MO
Buchanan County, MO
DeKalb County, MO
St. Louis, MO-IL ................................................................................................................................................................
Bond County, IL
Calhoun County, IL
Clinton County, IL
Jersey County, IL
Macoupin County, IL
Madison County, IL
Monroe County, IL
St. Clair County, IL
Crawford County, MO
Franklin County, MO
Jefferson County, MO
Lincoln County, MO
St. Charles County, MO
St. Louis County, MO
Warren County, MO
Washington County, MO
St. Louis City, MO
Salem, OR .........................................................................................................................................................................
Marion County, OR
Polk County, OR
Salinas, CA .......................................................................................................................................................................
Monterey County, CA
Salisbury, MD ....................................................................................................................................................................
Somerset County, MD
Wicomico County, MD
Salt Lake City, UT .............................................................................................................................................................
Salt Lake County, UT
Summit County, UT
Tooele County, UT
San Angelo, TX .................................................................................................................................................................
Irion County, TX
Tom Green County, TX
San Antonio, TX ................................................................................................................................................................
Atascosa County, TX
Bandera County, TX
Bexar County, TX
Comal County, TX
Guadalupe County, TX
Kendall County, TX
Medina County, TX
Wilson County, TX
San Diego-Carlsbad-San Marcos, CA ..............................................................................................................................
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0.9835
0.9926
0.9031
0.9134
1.3572
0.8702
1.0976
0.9021
1.0380
0.9006
1.0884
1.4987
0.9246
0.9158
0.8424
0.8856
1.1538
46458
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
41780 .......
41884 .......
41900 .......
41940 .......
41980 .......
42020 .......
42044 .......
42060 .......
42100 .......
pwalker on PROD1PC71 with RULES3
42140 .......
42220 .......
42340 .......
VerDate Aug<31>2005
Urban area (constituent counties)
Wage index
San Diego County, CA
Sandusky, OH ...................................................................................................................................................................
Erie County, OH
San Francisco-San Mateo-Redwood City, CA ..................................................................................................................
Marin County, CA
San Francisco County, CA
San Mateo County, CA
´
San German-Cabo Rojo, PR ............................................................................................................................................
Cabo Rojo Municipio, PR
Lajas Municipio, PR
Sabana Grande Municipio, PR
´
San German Municipio, PR
San Jose-Sunnyvale-Santa Clara, CA ..............................................................................................................................
San Benito County, CA
Santa Clara County, CA
San Juan-Caguas-Guaynabo, PR ....................................................................................................................................
Aguas Buenas Municipio, PR
Aibonito Municipio, PR
Arecibo Municipio, PR
Barceloneta Municipio, PR
Barranquitas Municipio, PR
´
Bayamon Municipio, PR
Caguas Municipio, PR
Camuy Municipio, PR
´
Canovanas Municipio, PR
Carolina Municipio, PR
˜
Catano Municipio, PR
Cayey Municipio, PR
Ciales Municipio, PR
Cidra Municipio, PR
´
Comerıo Municipio, PR
Corozal Municipio, PR
Dorado Municipio, PR
Florida Municipio, PR
Guaynabo Municipio, PR
Gurabo Municipio, PR
Hatillo Municipio, PR
Humacao Municipio, PR
Juncos Municipio, PR
Las Piedras Municipio, PR
´
Loıza Municipio, PR
´
Manatı Municipio, PR
Maunabo Municipio, PR
Morovis Municipio, PR
Naguabo Municipio, PR
Naranjito Municipio, PR
Orocovis Municipio, PR
Quebradillas Municipio, PR
´
Rıo Grande Municipio, PR
San Juan Municipio, PR
San Lorenzo Municipio, PR
Toa Alta Municipio, PR
Toa Baja Municipio, PR
Trujillo Alto Municipio, PR
Vega Alta Municipio, PR
Vega Baja Municipio, PR
Yabucoa Municipio, PR
San Luis Obispo-Paso Robles, CA ...................................................................................................................................
San Luis Obispo County, CA
Santa Ana-Anaheim-Irvine, CA .........................................................................................................................................
Orange County, CA
Santa Barbara-Santa Maria-Goleta, CA ...........................................................................................................................
Santa Barbara County, CA
Santa Cruz-Watsonville, CA .............................................................................................................................................
Santa Cruz County, CA
Santa Fe, NM ....................................................................................................................................................................
Santa Fe County, NM
Santa Rosa-Petaluma, CA ................................................................................................................................................
Sonoma County, CA
Savannah, GA ...................................................................................................................................................................
Bryan County, GA
Chatham County, GA
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1.5529
0.4756
1.6141
0.4393
1.2441
1.1993
1.1909
1.6429
1.0610
1.5528
0.9152
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
46459
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
42540 .......
42644 .......
42680 .......
43100 .......
43300 .......
43340 .......
43580 .......
43620 .......
43780 .......
43900 .......
44060 .......
44100 .......
44140 .......
44180 .......
44220 .......
44300 .......
44700 .......
44940 .......
45060 .......
45104 .......
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45220 .......
45300 .......
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Urban area (constituent counties)
Wage index
Effingham County, GA
Scranton—Wilkes-Barre, PA .............................................................................................................................................
Lackawanna County, PA
Luzerne County, PA
Wyoming County, PA
Seattle-Bellevue-Everett, WA ............................................................................................................................................
King County, WA
Snohomish County, WA
Sebastian-Vero Beach, FL ................................................................................................................................................
Indian River County, FL
Sheboygan, WI ..................................................................................................................................................................
Sheboygan County, WI
Sherman-Denison, TX .......................................................................................................................................................
Grayson County, TX
Shreveport-Bossier City, LA ..............................................................................................................................................
Bossier Parish, LA
Caddo Parish, LA
De Soto Parish, LA
Sioux City, IA-NE-SD ........................................................................................................................................................
Woodbury County, IA
Dakota County, NE
Dixon County, NE
Union County, SD
Sioux Falls, SD .................................................................................................................................................................
Lincoln County, SD
McCook County, SD
Minnehaha County, SD
Turner County, SD
South Bend-Mishawaka, IN-MI .........................................................................................................................................
St. Joseph County, IN
Cass County, MI
Spartanburg, SC ...............................................................................................................................................................
Spartanburg County, SC
Spokane, WA ....................................................................................................................................................................
Spokane County, WA
Springfield, IL ....................................................................................................................................................................
Menard County, IL
Sangamon County, IL
Springfield, MA ..................................................................................................................................................................
Franklin County, MA
Hampden County, MA
Hampshire County, MA
Springfield, MO .................................................................................................................................................................
Christian County, MO
Dallas County, MO
Greene County, MO
Polk County, MO
Webster County, MO
Springfield, OH ..................................................................................................................................................................
Clark County, OH
State College, PA ..............................................................................................................................................................
Centre County, PA
Stockton, CA .....................................................................................................................................................................
San Joaquin County, CA
Sumter, SC ........................................................................................................................................................................
Sumter County, SC
Syracuse, NY ....................................................................................................................................................................
Madison County, NY
Onondaga County, NY
Oswego County, NY
Tacoma, WA .....................................................................................................................................................................
Pierce County, WA
Tallahassee, FL .................................................................................................................................................................
Gadsden County, FL
Jefferson County, FL
Leon County, FL
Wakulla County, FL
Tampa-St. Petersburg-Clearwater, FL ..............................................................................................................................
Hernando County, FL
Hillsborough County, FL
Pasco County, FL
Pinellas County, FL
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0.8333
1.1755
0.9217
0.8920
0.9024
0.8442
0.8915
0.9354
0.9761
0.9025
1.0559
0.9102
1.0405
0.8424
0.8876
0.8937
1.2015
0.8257
0.9787
1.1241
0.8964
0.8852
46460
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
45460 .......
Terre Haute, IN .................................................................................................................................................................
Clay County, IN
Sullivan County, IN
Vermillion County, IN
Vigo County, IN
Texarkana, TX-Texarkana, AR .........................................................................................................................................
Miller County, AR
Bowie County, TX
Toledo, OH ........................................................................................................................................................................
Fulton County, OH
Lucas County, OH
Ottawa County, OH
Wood County, OH
Topeka, KS .......................................................................................................................................................................
Jackson County, KS
Jefferson County, KS
Osage County, KS
Shawnee County, KS
Wabaunsee County, KS
Trenton-Ewing, NJ ............................................................................................................................................................
Mercer County, NJ
Tucson, AZ ........................................................................................................................................................................
Pima County, AZ
Tulsa, OK ..........................................................................................................................................................................
Creek County, OK
Okmulgee County, OK
Osage County, OK
Pawnee County, OK
Rogers County, OK
Tulsa County, OK
Wagoner County, OK
Tuscaloosa, AL .................................................................................................................................................................
Greene County, AL
Hale County, AL
Tuscaloosa County, AL
Tyler, TX ............................................................................................................................................................................
Smith County, TX
Utica-Rome, NY ................................................................................................................................................................
Herkimer County, NY
Oneida County, NY
Valdosta, GA .....................................................................................................................................................................
Brooks County, GA
Echols County, GA
Lanier County, GA
Lowndes County, GA
Vallejo-Fairfield, CA ..........................................................................................................................................................
Solano County, CA
Victoria, TX ........................................................................................................................................................................
Calhoun County, TX
Goliad County, TX
Victoria County, TX
Vineland-Millville-Bridgeton, NJ ........................................................................................................................................
Cumberland County, NJ
Virginia Beach-Norfolk-Newport News, VA-NC ................................................................................................................
Currituck County, NC
Gloucester County, VA
Isle of Wight County, VA
James City County, VA
Mathews County, VA
Surry County, VA
York County, VA
Chesapeake City, VA
Hampton City, VA
Newport News City, VA
Norfolk City, VA
Poquoson City, VA
Portsmouth City, VA
Suffolk City, VA
Virginia Beach City, VA
Williamsburg City, VA
Visalia-Porterville, CA .......................................................................................................................................................
Tulare County, CA
45500 .......
45780 .......
45820 .......
45940 .......
46060 .......
46140 .......
46220 .......
46340 .......
46540 .......
46660 .......
46700 .......
47020 .......
47220 .......
pwalker on PROD1PC71 with RULES3
47260 .......
47300 .......
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08AUR3
0.9085
0.8144
0.9407
0.8756
1.0604
0.9229
0.8445
0.8496
0.8804
0.8404
0.8027
1.4359
0.8124
1.0366
0.8884
1.0144
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
46461
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
Urban area (constituent counties)
47380 .......
Waco, TX ..........................................................................................................................................................................
McLennan County, TX
Warner Robins, GA ...........................................................................................................................................................
Houston County, GA
Warren-Troy-Farmington Hills, MI .....................................................................................................................................
Lapeer County, MI
Livingston County, MI
Macomb County, MI
Oakland County, MI
St. Clair County, MI
Washington-Arlington-Alexandria, DC-VA-MD-WV ...........................................................................................................
District of Columbia, DC
Calvert County, MD
Charles County, MD
Prince George’s County, MD
Arlington County, VA
Clarke County, VA
Fairfax County, VA
Fauquier County, VA
Loudoun County, VA
Prince William County, VA
Spotsylvania County, VA
Stafford County, VA
Warren County, VA
Alexandria City, VA
Fairfax City, VA
Falls Church City, VA
Fredericksburg City, VA
Manassas City, VA
Manassas Park City, VA
Jefferson County, WV
Waterloo-Cedar Falls, IA ...................................................................................................................................................
Black Hawk County, IA
Bremer County, IA
Grundy County, IA
Wausau, WI .......................................................................................................................................................................
Marathon County, WI
Weirton-Steubenville, WV-OH ...........................................................................................................................................
Jefferson County, OH
Brooke County, WV
Hancock County, WV
Wenatchee, WA ................................................................................................................................................................
Chelan County, WA
Douglas County, WA
West Palm Beach-Boca Raton-Boynton Beach, FL .........................................................................................................
Palm Beach County, FL
Wheeling, WV-OH .............................................................................................................................................................
Belmont County, OH
Marshall County, WV
Ohio County, WV
Wichita, KS ........................................................................................................................................................................
Butler County, KS
Harvey County, KS
Sedgwick County, KS
Sumner County, KS
Wichita Falls, TX ...............................................................................................................................................................
Archer County, TX
Clay County, TX
Wichita County, TX
Williamsport, PA ................................................................................................................................................................
Lycoming County, PA
Wilmington, DE-MD-NJ .....................................................................................................................................................
New Castle County, DE
Cecil County, MD
Salem County, NJ
Wilmington, NC .................................................................................................................................................................
Brunswick County, NC
New Hanover County, NC
Pender County, NC
Winchester, VA-WV ..........................................................................................................................................................
Frederick County, VA
Winchester City, VA
47580 .......
47644 .......
47894 .......
47940 .......
48140 .......
48260 .......
48300 .......
48424 .......
48540 .......
48620 .......
48660 .......
48700 .......
48864 .......
pwalker on PROD1PC71 with RULES3
48900 .......
49020 .......
VerDate Aug<31>2005
17:33 Aug 07, 2008
Jkt 214001
PO 00000
Frm 00047
Fmt 4701
Sfmt 4700
E:\FR\FM\08AUR3.SGM
Wage index
08AUR3
0.8596
0.8989
0.9904
1.0827
0.8490
0.9615
0.8079
0.9544
0.9757
0.6955
0.9069
0.8832
0.8096
1.0696
0.9089
0.9801
46462
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations
TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued
CBSA code
49180 .......
49340 .......
49420 .......
49500 .......
49620 .......
49660 .......
49700 .......
49740 .......
Urban area (constituent counties)
Wage index
Hampshire County, WV
Winston-Salem, NC ...........................................................................................................................................................
Davie County, NC
Forsyth County, NC
Stokes County, NC
Yadkin County, NC
Worcester, MA ..................................................................................................................................................................
Worcester County, MA
Yakima, WA ......................................................................................................................................................................
Yakima County, WA
Yauco, PR .........................................................................................................................................................................
´
Guanica Municipio, PR
Guayanilla Municipio, PR
˜
Penuelas Municipio, PR
Yauco Municipio, PR
York-Hanover, PA .............................................................................................................................................................
York County, PA
Youngstown-Warren-Boardman, OH-PA ..........................................................................................................................
Mahoning County, OH
Trumbull County, OH
Mercer County, PA
Yuba City, CA ...................................................................................................................................................................
Sutter County, CA
Yuba County, CA
Yuma, AZ ..........................................................................................................................................................................
Yuma County, AZ
0.9016
1.0836
0.9948
0.3432
0.9518
0.8915
1.1137
0.9281
1 At this time, there are no hospitals located in this urban area on which to base a wage index. We use the average wage index of all of the
urban areas within the State to serve as a reasonable proxy.
TABLE 9—FY 2009 WAGE INDEX
BASED ON CBSA LABOR MARKET
AREAS FOR RURAL AREAS
State
code
pwalker on PROD1PC71 with RULES3
1 ........
2 ........
3 ........
4 ........
5 ........
6 ........
7 ........
8 ........
10 ......
11 ......
12 ......
13 ......
14 ......
15 ......
16 ......
17 ......
18 ......
19 ......
20 ......
21 ......
22 ......
23 ......
24 ......
Wage
index
Nonurban area
Alabama ........................
Alaska ............................
Arizona ..........................
Arkansas ........................
California .......................
Colorado ........................
Connecticut ....................
Delaware .......................
Florida ............................
Georgia ..........................
Hawaii ............................
Idaho ..............................
Illinois .............................
Indiana ...........................
Iowa ...............................
Kansas ...........................
Kentucky ........................
Louisiana .......................
Maine .............................
Maryland ........................
Massachusetts 1 ............
Michigan ........................
Minnesota ......................
VerDate Aug<31>2005
17:33 Aug 07, 2008
0.7587
1.1898
0.8453
0.7473
1.2275
0.9570
1.1016
0.9962
0.8504
0.7612
1.0999
0.7651
0.8386
0.8473
0.8804
0.8052
0.7803
0.7447
0.8644
0.8883
1.1670
0.8887
0.9059
Jkt 214001
TABLE 9—FY 2009 WAGE INDEX
BASED ON CBSA LABOR MARKET
AREAS FOR RURAL AREAS—Continued
State
code
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
PO 00000
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
Nonurban area
Wage
index
Mississippi .....................
Missouri .........................
Montana .........................
Nebraska .......................
Nevada ..........................
New Hampshire .............
New Jersey 1 .................
New Mexico ...................
New York .......................
North Carolina ...............
North Dakota .................
Ohio ...............................
Oklahoma ......................
Oregon ...........................
Pennsylvania .................
Puerto Rico 1 .................
Rhode Island 1 ...............
South Carolina ...............
South Dakota .................
Tennessee .....................
Texas .............................
0.7584
0.7982
0.8658
0.8730
0.9382
1.0182
................
0.8812
0.8145
0.8576
0.7205
0.8588
0.7732
1.0218
0.8365
0.4047
................
0.8538
0.8603
0.7789
0.7894
Frm 00048
Fmt 4701
Sfmt 4700
TABLE 9—FY 2009 WAGE INDEX
BASED ON CBSA LABOR MARKET
AREAS FOR RURAL AREAS—Continued
State
code
46
47
48
49
50
51
52
53
65
......
......
......
......
......
......
......
......
......
Nonurban area
Utah ...............................
Vermont .........................
Virgin Islands .................
Virginia ...........................
Washington ....................
West Virginia .................
Wisconsin ......................
Wyoming ........................
Guam .............................
Wage
index
0.8267
1.0079
0.6971
0.7861
1.0181
0.7503
0.9373
0.9315
0.9611
1 All counties within the State are classified
as urban, with the exception of Massachusetts
and Puerto Rico. Massachusetts and Puerto
Rico have areas designated as rural; however,
no short-term, acute care hospitals are located
in the area(s) for FY 2009. The rural Massachusetts wage index is calculated as the average of all contiguous CBSAs. The Puerto Rico
wage index is the same as FY 2008.
[FR Doc. E8–17948 Filed 7–31–08; 4:15 pm]
BILLING CODE 4120–01–P
E:\FR\FM\08AUR3.SGM
08AUR3
Agencies
[Federal Register Volume 73, Number 154 (Friday, August 8, 2008)]
[Rules and Regulations]
[Pages 46416-46462]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17948]
[[Page 46415]]
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Part III
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Part 413
Medicare Program; Prospective Payment System and Consolidated Billing
for Skilled Nursing Facilities for FY 2009; Final Rule
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules
and Regulations
[[Page 46416]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 413
[CMS-1534-F]
RIN 0938-AP11
Medicare Program; Prospective Payment System and Consolidated
Billing for Skilled Nursing Facilities for FY 2009
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule updates the payment rates used under the
prospective payment system (PPS) for skilled nursing facilities (SNFs),
for fiscal year (FY) 2009. It also discusses our ongoing analysis of
nursing home staff time measurement data collected in the Staff Time
and Resource Intensity Verification (STRIVE) project. Finally, this
final rule makes technical corrections in the regulations text with
respect to Medicare bad debt payments to SNFs and the reference to the
definition of urban and rural as applied to SNFs.
DATES: Effective Date: This final rule becomes effective on October 1,
2008.
FOR FURTHER INFORMATION CONTACT:
Ellen Berry, (410) 786-4528 (for information related to clinical
issues).
Jeanette Kranacs, (410) 786-9385 (for information related to the
development of the payment rates and case-mix indexes).
Bill Ullman, (410) 786-5667 (for information related to level of
care determinations, consolidated billing, and general information).
SUPPLEMENTARY INFORMATION: To assist readers in referencing sections
contained in this document, we are providing the following Table of
Contents.
Table of Contents
I. Background
A. Current System for Payment of Skilled Nursing Facility
Services Under Part A of the Medicare Program
B. Requirements of the Balanced Budget Act of 1997 (BBA) for
Updating the Prospective Payment System for Skilled Nursing
Facilities
C. The Medicare, Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999 (BBRA)
D. The Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA)
E. The Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA)
F. Skilled Nursing Facility Prospective Payment--General
Overview
1. Payment Provisions--Federal Rate
2. Rate Updates Using the Skilled Nursing Facility Market Basket
Index
II. Summary of the Provisions of the FY 2009 Proposed Rule
III. Analysis of and Response to Public Comments on the FY 2009
Proposed Rule
A. General Comments on the FY 2009 Proposed Rule
B. Annual Update of Payment Rates Under the Prospective Payment
System for Skilled Nursing Facilities
1. Federal Prospective Payment System
a. Costs and Services Covered by the Federal Rates
b. Methodology Used for the Calculation of the Federal Rates
2. Case-Mix Adjustments
a. Background
b. Development of the Case-Mix Indexes
3. Wage Index Adjustment to Federal Rates
a. Clarification of New England Deemed Counties
b. Multi-Campus Hospital Wage Index Data
4. Updates to the Federal Rates
5. Relationship of RUG-III Classification System to Existing
Skilled Nursing Facility Level-of-Care Criteria
6. Example of Computation of Adjusted PPS Rates and SNF Payment
7. Other Issues
a. Staff Time and Resource Intensity Verification (STRIVE)
Project
b. Minimum Data Set (MDS) 3.0
c. Integrated Post Acute Care Payment
8. Miscellaneous Technical Corrections and Clarifications
a. Bad Debt Payments
b. Additional Clarifications
IV. The Skilled Nursing Facility Market Basket Index
A. Use of the Skilled Nursing Facility Market Basket Percentage
B. Market Basket Forecast Error Adjustment
C. Federal Rate Update Factor
V. Consolidated Billing
VI. Application of the SNF PPS to SNF Services Furnished by Swing-
Bed Hospitals
VII. Provisions of the Final Rule
VIII. Collection of Information Requirements
IX. Regulatory Impact Analysis
A. Overall Impact
B. Anticipated Effects
C. Alternatives Considered
D. Accounting Statement
E. Conclusion
Regulation Text
Addendum: FY 2009 CBSA-Based Wage Index Tables (Tables 8 & 9)
Abbreviations
Because of the many terms to which we refer by abbreviation in this
final rule, we are listing these abbreviations and their corresponding
terms in alphabetical order below:
AIDS Acquired Immune Deficiency Syndrome
ARD Assessment Reference Date
BBA Balanced Budget Act of 1997, Public Law 105-33
BBRA Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999, Public Law 106-113
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, Public Law 106-554
CAH Critical Access Hospital
CARE Continuity Assessment Record and Evaluation
CBSA Core-Based Statistical Area
CFR Code of Federal Regulations
CMI Case-Mix Index
CMS Centers for Medicare & Medicaid Services
DRA Deficit Reduction Act of 2005, Public Law 109-171
FQHC Federally Qualified Health Center
FR Federal Register
FY Fiscal Year
GAO Government Accountability Office
HAC Hospital-Acquired Condition
HCPCS Healthcare Common Procedure Coding System
HIPPS Health Insurance Prospective Payment System
HIT Health Information Technology
IFC Interim Final Rule with Comment Period
IPPS Hospital Inpatient Prospective Payment System
MDS Minimum Data Set
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Public Law 108-173
MSA Metropolitan Statistical Area
MS-DRG Medicare Severity Diagnosis-Related Group
NRST Non-Resident Specific Time
NTA Non-Therapy Ancillary
OBRA Omnibus Budget Reconciliation Act of 1987, Public Law 100-203
OIG Office of the Inspector General
OMB Office of Management and Budget
OMRA Other Medicare Required Assessment
PAC-PRD Post-Acute Care Payment Reform Demonstration
POA Present on Admission
PPS Prospective Payment System
RAI Resident Assessment Instrument
RAP Resident Assessment Protocol
RAVEN Resident Assessment Validation Entry
RFA Regulatory Flexibility Act, Public Law 96-354
RHC Rural Health Clinic
RIA Regulatory Impact Analysis
RUG-III Resource Utilization Groups, Version III
RUG-53 Refined 53-Group RUG-III Case-Mix Classification System
RST Resident Specific Time
SCHIP State Children's Health Insurance Program
SNF Skilled Nursing Facility
STM Staff Time Measurement
STRIVE Staff Time and Resource Intensity Verification
TEP Technical Expert Panel
UMRA Unfunded Mandates Reform Act, Public Law 104-4
VBP Value-Based Purchasing
[[Page 46417]]
I. Background
On May 7, 2008, we published a proposed rule (73 FR 25918) in the
Federal Register (hereafter referred to as the FY 2009 proposed rule),
setting forth updates to the payment rates used under the prospective
payment system (PPS) for skilled nursing facilities (SNFs), for fiscal
year (FY) 2009. Annual updates to the prospective payment system rates
for skilled nursing facilities are required by section 1888(e) of the
Social Security Act (the Act), as added by section 4432 of the Balanced
Budget Act of 1997 (BBA), and amended by the Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act of 1999 (BBRA), the Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA), and the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA). Our most recent annual update occurred
in the August 3, 2007 final rule (72 FR 43412) that set forth updates
to the SNF PPS payment rates for FY 2008. We subsequently published two
correction notices (72 FR 55085, September 28, 2007, and 72 FR 67652,
November 30, 2007) with respect to those payment rate updates.
A. Current System for Payment of Skilled Nursing Facility Services
Under Part A of the Medicare Program
Section 4432 of the BBA amended section 1888 of the Act to provide
for the implementation of a per diem PPS for SNFs, covering all costs
(routine, ancillary, and capital-related) of covered SNF services
furnished to beneficiaries under Part A of the Medicare program,
effective for cost reporting periods beginning on or after July 1,
1998. In this final rule, we are updating the per diem payment rates
for SNFs for FY 2009. Major elements of the SNF PPS include:
Rates. As discussed in section I.F.1. of this final rule,
we established per diem Federal rates for urban and rural areas using
allowable costs from FY 1995 cost reports. These rates also included an
estimate of the cost of services that, before July 1, 1998, had been
paid under Part B but were furnished to Medicare beneficiaries in a SNF
during a Part A covered stay. We update the rates annually using a SNF
market basket index, and we adjust them by the hospital inpatient wage
index to account for geographic variation in wages. We also apply a
case-mix adjustment to account for the relative resource utilization of
different patient types. This adjustment utilizes a refined, 53-group
version of the Resource Utilization Groups, version III (RUG-III) case-
mix classification system, based on information obtained from the
required resident assessments using the Minimum Data Set (MDS) 2.0.
Additionally, as noted in sections I.C through I.E of this final rule,
the payment rates at various times have also reflected specific
legislative provisions, including section 101 of the BBRA, sections
311, 312, and 314 of the BIPA, and section 511 of the MMA.
Transition. Under sections 1888(e)(1)(A) and (e)(11) of
the Act, the SNF PPS included an initial, three-phase transition that
blended a facility-specific rate (reflecting the individual facility's
historical cost experience) with the Federal case-mix adjusted rate.
The transition extended through the facility's first three cost
reporting periods under the PPS, up to and including the one that began
in FY 2001. Thus, the SNF PPS is no longer operating under the
transition, as all facilities have been paid at the full Federal rate
effective with cost reporting periods beginning in FY 2002. As we now
base payments entirely on the adjusted Federal per diem rates, we no
longer include adjustment factors related to facility-specific rates
for the coming FY.
Coverage. The establishment of the SNF PPS did not change
Medicare's fundamental requirements for SNF coverage. However, because
the RUG-III classification is based, in part, on the beneficiary's need
for skilled nursing care and therapy, we have attempted, where
possible, to coordinate claims review procedures with the output of
beneficiary assessment and RUG-III classifying activities. This
approach includes an administrative presumption that utilizes a
beneficiary's initial classification in one of the upper 35 RUGs of the
refined 53-group system to assist in making certain SNF level of care
determinations, as discussed in greater detail in section III.B.5 of
this final rule.
Consolidated Billing. The SNF PPS includes a consolidated
billing provision that requires a SNF to submit consolidated Medicare
bills to its fiscal intermediary or Medicare Administrative Contractor
for almost all of the services that its residents receive during the
course of a covered Part A stay. In addition, this provision places
with the SNF the Medicare billing responsibility for physical,
occupational, and speech-language therapy that the resident receives
during a noncovered stay. The statute excludes a small list of services
from the consolidated billing provision (primarily those of physicians
and certain other types of practitioners), which remain separately
billable under Part B when furnished to a SNF's Part A resident. A more
detailed discussion of this provision appears in section V. of this
final rule.
Application of the SNF PPS to SNF services furnished by
swing-bed hospitals. Section 1883 of the Act permits certain small,
rural hospitals to enter into a Medicare swing-bed agreement, under
which the hospital can use its beds to provide either acute or SNF
care, as needed. For critical access hospitals (CAHs), Part A pays on a
reasonable cost basis for SNF services furnished under a swing-bed
agreement. However, in accordance with section 1888(e)(7) of the Act,
these services are paid under the SNF PPS when furnished by non-CAH
rural hospitals, effective with cost reporting periods beginning on or
after July 1, 2002. A more detailed discussion of this provision
appears in section VI. of this final rule.
B. Requirements of the Balanced Budget Act of 1997 (BBA) for Updating
the Prospective Payment System for Skilled Nursing Facilities
Section 1888(e)(4)(H) of the Act requires that we publish annually
in the Federal Register:
1. The unadjusted Federal per diem rates to be applied to days of
covered SNF services furnished during the FY.
2. The case-mix classification system to be applied with respect to
these services during the FY.
3. The factors to be applied in making the area wage adjustment
with respect to these services.
In the July 30, 1999 final rule (64 FR 41670), we indicated that we
would announce any changes to the guidelines for Medicare level of care
determinations related to modifications in the RUG-III classification
structure (see section III.B.5 of this final rule for a discussion of
the relationship between the case-mix classification system and SNF
level of care determinations).
Along with other revisions outlined later in this preamble, this
final rule provides the annual updates to the Federal rates as mandated
by the Act.
C. The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA)
There were several provisions in the BBRA that resulted in
adjustments to the SNF PPS. We described these provisions in detail in
the SNF PPS final rule for FY 2001 (65 FR 46770, July 31, 2001). In
particular, section 101(a) of the BBRA provided for a temporary 20
percent increase in the per diem adjusted payment rates for 15
specified
[[Page 46418]]
RUG-III groups. In accordance with section 101(c)(2) of the BBRA, this
temporary payment adjustment expired on January 1, 2006, with the
implementation of case-mix refinements (see section I.F.1. of this
final rule). We included further information on BBRA provisions that
affected the SNF PPS in Program Memorandums A-99-53 and A-99-61
(December 1999).
Also, section 103 of the BBRA designated certain additional
services for exclusion from the consolidated billing requirement, as
discussed in greater detail in section V. of this final rule. Further,
for swing-bed hospitals with more than 49 (but less than 100) beds,
section 408 of the BBRA provided for the repeal of certain statutory
restrictions on length of stay and aggregate payment for patient days,
effective with the end of the SNF PPS transition period described in
section 1888(e)(2)(E) of the Act. In the SNF PPS final rule for FY 2002
(66 FR 39562, July 31, 2001), we made conforming changes to the
regulations at Sec. 413.114(d), effective for services furnished in
cost reporting periods beginning on or after July 1, 2002, to reflect
section 408 of the BBRA.
D. The Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA)
The BIPA also included several provisions that resulted in
adjustments to the SNF PPS. We described these provisions in detail in
the SNF PPS final rule for FY 2002 (66 FR 39562, July 31, 2001). In
particular:
Section 203 of the BIPA exempted CAH swing-beds from the
SNF PPS. We included further information on this provision in Program
Memorandum A-01-09 (Change Request 1509), issued January 16,
2001, which is available online at https://www.cms.hhs.gov/transmittals/
downloads/a0109.pdf.
Section 311 of the BIPA revised the statutory update
formula for the SNF market basket, and also directed us to conduct a
study of alternative case-mix classification systems for the SNF PPS.
In 2006, we submitted a report to the Congress on this study, which is
available online at https://www.cms.hhs.gov/SNFPPS/Downloads/RC_2006_
PC-PPSSNF.pdf.
Section 312 of the BIPA provided for a temporary increase
of 16.66 percent in the nursing component of the case-mix adjusted
Federal rate for services furnished on or after April 1, 2001, and
before October 1, 2002; accordingly, this add-on is no longer in
effect. This section also directed the Government Accountability Office
(GAO) to conduct an audit of SNF nursing staff ratios and submit a
report to the Congress on whether the temporary increase in the nursing
component should be continued. The report (GAO-03-176), which GAO
issued in November 2002, is available online at https://www.gao.gov/
new.items/d03176.pdf.
Section 313 of the BIPA repealed the consolidated billing
requirement for services (other than physical, occupational, and
speech-language therapy) furnished to SNF residents during noncovered
stays, effective January 1, 2001. (A more detailed discussion of this
provision appears in section V. of this final rule.)
Section 314 of the BIPA corrected an anomaly involving
three of the RUGs that the BBRA had designated to receive the temporary
payment adjustment discussed above in section I.C. of this final rule.
(As noted previously, in accordance with section 101(c)(2) of the BBRA,
this temporary payment adjustment expired upon the implementation of
case-mix refinements on January 1, 2006.)
Section 315 of the BIPA authorized us to establish a
geographic reclassification procedure that is specific to SNFs, but
only after collecting the data necessary to establish a SNF wage index
that is based on wage data from nursing homes. To date, this has proven
to be infeasible due to the volatility of existing SNF wage data and
the significant amount of resources that would be required to improve
the quality of that data.
We included further information on several of the BIPA provisions
in Program Memorandum A-01-08 (Change Request 1510), issued
January 16, 2001, which is available online at https://www.cms.hhs.gov/
transmittals/downloads/a0108.pdf.
E. The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA)
The MMA included a provision that resulted in further adjustment to
the SNF PPS. Specifically, section 511 of the MMA amended section
1888(e)(12) of the Act, to provide for a temporary increase of 128
percent in the PPS per diem payment for any SNF resident with Acquired
Immune Deficiency Syndrome (AIDS), effective with services furnished on
or after October 1, 2004. This special AIDS add-on was to remain in
effect until ``* * * such date as the Secretary certifies that there is
an appropriate adjustment in the case mix * * *.'' The AIDS add-on is
also discussed in Program Transmittal 160 (Change Request
3291), issued on April 30, 2004, which is available online at
https://www.cms.hhs.gov/transmittals/downloads/r160cp.pdf. As discussed
in the SNF PPS final rule for FY 2006 (70 FR 45028, August 4, 2005),
the implementation of the case-mix refinements did not address the
certification regarding the AIDS add-on, allowing the temporary add-on
payment created by section 511 of the MMA to continue in effect.
For the limited number of SNF residents that qualify for the AIDS
add-on, implementation of this provision results in a significant
increase in payment. For example, using FY 2006 data, we identified
less than 2,700 SNF residents with a diagnosis code of 042 (Human
Immunodeficiency Virus (HIV) Infection). For FY 2009, an urban facility
with a resident with AIDS in RUG group ``SSA'' would have a case-mix
adjusted payment of $259.40 (see Table 4) before the application of the
MMA adjustment. After an increase of 128 percent, this urban facility
would receive a case-mix adjusted payment of $591.43.
In addition, section 410 of the MMA contained a provision that
excluded from consolidated billing certain practitioner and other
services furnished to SNF residents by rural health clinics (RHCs) and
Federally Qualified Health Centers (FQHCs). (Further information on
this provision appears in section V. of this final rule.)
F. Skilled Nursing Facility Prospective Payment--General Overview
We implemented the Medicare SNF PPS effective with cost reporting
periods beginning on or after July 1, 1998. This PPS pays SNFs through
prospective, case-mix adjusted per diem payment rates applicable to all
covered SNF services. These payment rates cover all costs of furnishing
covered skilled nursing services (routine, ancillary, and capital-
related costs) other than costs associated with approved educational
activities. Covered SNF services include post-hospital services for
which benefits are provided under Part A and all items and services
that, before July 1, 1998, had been paid under Part B (other than
physician and certain other services specifically excluded under the
BBA) but furnished to Medicare beneficiaries in a SNF during a covered
Part A stay. A comprehensive discussion of these provisions appears in
the May 12, 1998 interim final rule (63 FR 26252).
1. Payment Provisions--Federal Rate
The PPS uses per diem Federal payment rates based on mean SNF costs
in a base year updated for inflation to the first effective period of
the PPS. We
[[Page 46419]]
developed the Federal payment rates using allowable costs from
hospital-based and freestanding SNF cost reports for reporting periods
beginning in FY 1995. The data used in developing the Federal rates
also incorporated an estimate of the amounts that would be payable
under Part B for covered SNF services furnished to individuals during
the course of a covered Part A stay in a SNF.
In developing the rates for the initial period, we updated costs to
the first effective year of the PPS (the 15-month period beginning July
1, 1998) using a SNF market basket index, and then standardized for the
costs of facility differences in case-mix and for geographic variations
in wages. In compiling the database used to compute the Federal payment
rates, we excluded those providers that received new provider
exemptions from the routine cost limits, as well as costs related to
payments for exceptions to the routine cost limits. Using the formula
that the BBA prescribed, we set the Federal rates at a level equal to
the weighted mean of freestanding costs plus 50 percent of the
difference between the freestanding mean and weighted mean of all SNF
costs (hospital-based and freestanding) combined. We computed and
applied separately the payment rates for facilities located in urban
and rural areas. In addition, we adjusted the portion of the Federal
rate attributable to wage-related costs by a wage index.
The Federal rate also incorporates adjustments to account for
facility case-mix, using a classification system that accounts for the
relative resource utilization of different patient types. The RUG-III
classification system uses beneficiary assessment data from the Minimum
Data Set (MDS) completed by SNFs to assign beneficiaries to one of 53
RUG-III groups. The original RUG-III case-mix classification system
included 44 groups. However, under refinements that became effective on
January 1, 2006, we added nine new groups--comprising a new
Rehabilitation plus Extensive Services category--at the top of the RUG
hierarchy. The May 12, 1998 interim final rule (63 FR 26252) included a
detailed description of the original 44-group RUG-III case-mix
classification system. A comprehensive description of the refined 53-
group RUG-III case-mix classification system (RUG-53) appeared in the
proposed rule for FY 2006 (70 FR 29070, May 19, 2005) and in the final
rule for FY 2006 (70 FR 45026, August 4, 2005).
Further, in accordance with section 1888(e)(4)(E)(ii)(IV) of the
Act, the Federal rates in this final rule reflect an update to the
rates that we published in the final rule for FY 2008 (72 FR 43412,
August 3, 2007) and the associated correction notices published on
September 28, 2007 (72 FR 55085) and November 30, 2007 (72 FR 67652),
equal to the full change in the SNF market basket index. A more
detailed discussion of the SNF market basket index and related issues
appears in sections I.F.2. and IV. of this final rule.
2. Rate Updates Using the Skilled Nursing Facility Market Basket Index
Section 1888(e)(5) of the Act requires us to establish a SNF market
basket index that reflects changes over time in the prices of an
appropriate mix of goods and services included in covered SNF services.
We use the SNF market basket index to update the Federal rates on an
annual basis. In the FY 2008 SNF PPS final rule (72 FR 43425 through
43430, August 3, 2007), we revised and rebased the market basket, which
included updating the base year from FY 1997 to FY 2004. The proposed
FY 2009 market basket increase was 3.1 percent. The final FY 2009
market basket increase is 3.4 percent.
In addition, as explained in the SNF PPS final rule for FY 2004 (66
FR 46058, August 4, 2003) and in section IV.B. of this final rule, the
annual update of the payment rates includes, as appropriate, an
adjustment to account for market basket forecast error. As described in
the SNF PPS final rule for FY 2008 (72 FR 43425, August 3, 2007), the
threshold percentage that serves to trigger an adjustment to account
for market basket forecast error is 0.5 percentage point effective for
FY 2008 and subsequent years. This adjustment takes into account the
forecast error from the most recently available FY for which there is
final data, and applies whenever the difference between the forecasted
and actual change in the market basket exceeds a 0.5 percentage point
threshold. For FY 2007 (the most recently available FY for which there
is final data), the estimated increase in the market basket index was
3.1 percentage points, while the actual increase was 3.1 percentage
points, resulting in no difference. Accordingly, as the difference
between the estimated and actual amount of change does not exceed the
0.5 percentage point threshold, the payment rates for FY 2009 do not
include a forecast error adjustment. Table 1 below shows the forecasted
and actual market basket amounts for FY 2007.
Table 1--Difference Between the Forecasted and Actual Market Basket Increases for FY 2007
----------------------------------------------------------------------------------------------------------------
Forecasted FY 2007 Actual FY 2007 increase
Index increase * ** FY 2007 difference ***
----------------------------------------------------------------------------------------------------------------
SNF............................... 3.1 3.1 0.0
----------------------------------------------------------------------------------------------------------------
* Published in Federal Register; based on second quarter 2006 Global Insight Inc. forecast (97 index).
** Based on the second quarter 2008 Global Insight forecast (97 index).
*** The FY 2007 forecast error correction will be applied to the FY 2009 PPS update recommendations. Any
forecast error less than 0.5 percentage points will not be reflected in the update recommendation.
Requirements for Issuance of Regulations
Section 902 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) amended section 1871(a) of the Act and
requires the Secretary, in consultation with the Director of the Office
of Management and Budget, to establish and publish timelines for the
publication of Medicare final regulations based on the previous
publication of a Medicare proposed or interim final regulation. Section
902 of the MMA also states that the timelines for these regulations may
vary but shall not exceed 3 years after publication of the preceding
proposed or interim final regulation except under exceptional
circumstances.
This final rule finalizes provisions proposed in the May 7, 2008
proposed rule. In addition, this final rule has been published within
the 3-year time limit imposed by section 902 of the MMA. Therefore, we
believe that the final rule is in accordance with the Congress' intent
to ensure timely publication of final regulations.
II. Summary of the Provisions of the FY 2009 Proposed Rule
In the FY 2009 proposed rule (73 FR 25918, May 7, 2008), we
proposed to update the Federal payment rates used
[[Page 46420]]
under the SNF PPS for FY 2009. We also proposed to recalibrate the
case-mix indexes so that they would more accurately reflect parity in
expenditures related to the implementation of case-mix refinements in
January 2006. In addition, we discussed our ongoing analysis of nursing
home staff time measurement data collected in the Staff Time and
Resource Intensity Verification (STRIVE) project. We also proposed to
make technical corrections in the regulations text with respect to
Medicare bad debt payments to SNFs and the reference to the definition
of urban and rural as applied to SNFs.
III. Analysis and Response to Public Comments on the FY 2009 Proposed
Rule
In response to the publication of the FY 2009 proposed rule, we
received over 100 timely items of correspondence from the public. The
comments originated primarily from various trade associations and major
organizations, but also from individual providers, corporations,
government agencies, and private citizens.
Brief summaries of each proposed provision, a summary of the public
comments that we received, and our responses to the comments appear
below.
A. General Comments on the FY 2009 Proposed Rule
In addition to the comments that we received on the proposed rule's
discussion of specific aspects of the SNF PPS (which we address later
in this final rule), commenters also submitted the following, more
general observations on the payment system.
Comment: We received comments similar to those discussed previously
in the SNF PPS final rule for FY 2008 (72 FR 43415 through 43416,
August 3, 2007) regarding the need to address certain perceived
inadequacies in payment for non-therapy ancillary (NTA) services,
including those services relating to the provision of ventilator care
in SNFs. We also received comments recommending that we continue to
monitor ongoing research, and that we consider alternative case-mix
methodologies such as the recent MedPAC proposal that appears on the
MedPAC Web site (see https://www.MedPAC.gov.)
Response: As we noted in the August 3, 2007 FY 2008 final rule (72
FR 43416), we anticipate that the findings from our current Staff Time
and Resource Intensity Verification (STRIVE) project will assist us in
reviewing and addressing these types of concerns. However, as noted in
our December 2006 Report to Congress, our analysis of NTA utilization
has been hindered by a lack of data. All Medicare institutional
providers except SNFs are required to submit detailed line item billing
that shows each ancillary service furnished during a Part A stay. SNFs
currently submit summary data that shows total dollar amounts for each
ancillary service category, such as radiology and pharmacy. As we
examine the data collected through the STRIVE project, we will be
evaluating whether our current data requirements are sufficient to move
forward with additional program enhancements. We will also consider
whether collecting more detailed claims information on a regular basis
will allow us to establish more accurate payment rates for NTA
services.
We also believe it is important to monitor ongoing research
activities, and work with all stakeholders, including MedPAC, to
identify opportunities for future program enhancements. At the same
time, we note that the SNF PPS reimbursement structure will be
completely examined as part of the Post Acute Care Payment Reform
Demonstration (PAC-PRD) project. Under this major CMS initiative, we
intend to analyze the payment structure currently used for all post-
acute care providers, and establish an integrated payment model
centered on beneficiary needs and service utilization (including the
use of non-therapy ancillaries) across settings. In considering future
changes to the SNF PPS, it will be important to evaluate how shorter
term enhancements contribute to our integrated post acute care
strategy.
A discussion of the public comments that we received on the STRIVE
project itself appears in section III.B.7.a of this final rule.
B. Annual Update of Payment Rates Under the Prospective Payment System
for Skilled Nursing Facilities
1. Federal Prospective Payment System
This final rule sets forth a schedule of Federal prospective
payment rates applicable to Medicare Part A SNF services beginning
October 1, 2008. The schedule incorporates per diem Federal rates that
provide Part A payment for all costs of services furnished to a
beneficiary in a SNF during a Medicare-covered stay.
a. Costs and Services Covered by the Federal Rates
In accordance with section 1888(e)(2)(B) of the Act, the Federal
rates apply to all costs (routine, ancillary, and capital-related) of
covered SNF services other than costs associated with approved
educational activities as defined in Sec. 413.85. Under section
1888(e)(2)(A)(i) of the Act, covered SNF services include post-hospital
SNF services for which benefits are provided under Part A (the hospital
insurance program), as well as all items and services (other than those
services excluded by statute) that, before July 1, 1998, were paid
under Part B (the supplementary medical insurance program) but
furnished to Medicare beneficiaries in a SNF during a Part A covered
stay. (These excluded service categories are discussed in greater
detail in section V.B.2. of the May 12, 1998 interim final rule (63 FR
26295 through 26297).)
b. Methodology Used for the Calculation of the Federal Rates
The FY 2009 rates reflect an update using the full amount of the
latest market basket index. The FY 2009 market basket increase factor
is 3.4 percent. A complete description of the multi-step process used
to calculate Federal rates initially appeared in the May 12, 1998
interim final rule (63 FR 26252), as further revised in subsequent
rules. We note that in accordance with section 101(c)(2) of the BBRA,
the previous temporary increases in the per diem adjusted payment rates
for certain designated RUGs, as specified in section 101(a) of the BBRA
and section 314 of the BIPA, are no longer in effect due to the
implementation of case-mix refinements as of January 1, 2006. However,
the temporary increase of 128 percent in the per diem adjusted payment
rates for SNF residents with AIDS, enacted by section 511 of the MMA
(and discussed previously in section I.E of this final rule), remains
in effect.
We used the SNF market basket to adjust each per diem component of
the Federal rates forward to reflect cost increases occurring between
the midpoint of the Federal FY beginning October 1, 2007, and ending
September 30, 2008, and the midpoint of the Federal FY beginning
October 1, 2008, and ending September 30, 2009, to which the payment
rates apply. In accordance with section 1888(e)(4)(E)(ii)(IV) of the
Act, we update the payment rates for FY 2009 by a factor equal to the
full market basket index percentage increase. (We note, that the FY
2009 President's Budget includes a provision that would establish a
zero percent market basket update for FYs 2009 through 2011, contingent
upon the enactment of legislation by the Congress to adopt that
proposal.) We further adjust the rates by
[[Page 46421]]
a wage index budget neutrality factor, described later in this section.
Tables 2 and 3 below reflect the updated components of the unadjusted
Federal rates for FY 2009.
Table 2--FY 2009 Unadjusted Federal Rate Per Diem--Urban
----------------------------------------------------------------------------------------------------------------
Nursing--case- Therapy--case- Therapy--non-
Rate component mix mix case-mix Non-case-mix
----------------------------------------------------------------------------------------------------------------
Per diem amount............................. $151.74 $114.30 $15.05 $77.44
----------------------------------------------------------------------------------------------------------------
Table 3--FY 2009 Unadjusted Federal Rate Per Diem--Rural
----------------------------------------------------------------------------------------------------------------
Nursing--case- Therapy--case- Therapy--non-
Rate component mix mix case-mix Non-case-mix
----------------------------------------------------------------------------------------------------------------
Per diem amount............................. $144.97 $131.80 $16.08 $78.87
----------------------------------------------------------------------------------------------------------------
2. Case-Mix Adjustments
a. Background
Section 1888(e)(4)(G)(i) of the Act requires the Secretary to make
an adjustment to account for case-mix. The statute specifies that the
adjustment is to reflect both a resident classification system that the
Secretary establishes to account for the relative resource use of
different patient types, as well as resident assessment and other data
that the Secretary considers appropriate. In first implementing the SNF
PPS (we refer readers to the May 12, 1998 interim final rule (63 FR
26252)), we developed the Resource Utilization Groups, version III
(RUG-III) case-mix classification system, which tied the amount of
payment to resident resource use in combination with resident
characteristic information. Staff time measurement (STM) studies
conducted in 1990, 1995, and 1997 provided information on resource use
(time spent by staff members on residents) and resident characteristics
that enabled us not only to establish RUG-III, but also to create case-
mix indexes.
Under the BBA, each update of the SNF PPS payment rates must
include the case-mix classification methodology applicable for the
coming Federal FY. As indicated previously in section I.F.1, the
payment rates set forth in this final rule reflect the use of the
refined RUG-53 system that we discussed in detail in the proposed and
final rules for FY 2006.
When we introduced a new refined RUG-53 classification model in
January 2006, we used our authority for establishing an appropriate
case-mix structure to construct a new case-mix index for use with the
RUG-53 model. We calculated the new case-mix indexes using the STM
study data that were collected during the 1990s and originally used in
creating the SNF PPS case-mix classification system and case-mix
indexes. As explained in greater detail below, we then performed a
budget neutrality analysis, and increased the RUG-53 case-mix weights
so that overall payments under the two models (the original 44-group
model and the refined 53-group model) could be expected to be equal.
In the following section of this final rule, we discuss the
adjustments to the RUG-53 case-mix indexes structure that we proposed
in our FY 2009 proposed rule.
b. Development of the Case-Mix Indexes
In the August 4, 2005 SNF PPS final rule for FY 2006 (70 FR 45032),
we introduced two refinements to the SNF PPS: (1) Nine new case-mix
groups to account for the care needs of beneficiaries requiring both
extensive medical and rehabilitation services; and (2) an adjustment to
reflect the variability in the use of non-therapy ancillaries (NTAs).
We made these refinements by using the resource minute data from the
original 44-group model to create a new set of relative weights, or
case-mix indexes (CMIs), for the refined 53-group model. We then
compared the two models to ensure that estimated total payments under
the 53-group model would not be greater or less than the aggregate
payments that would have been made under the 44-group model.
As explained in the FY 2009 proposed rule (73 FR 25923), in
conducting this analysis for the FY 2006 final rule, we used FY 2001
claims data (the most current data available at the time) to compare
estimated aggregate payments under the 44-group and 53-group models.
For each model, we multiplied the estimated case-mix adjusted base rate
by the number of Medicare paid days attributable to each RUG group. For
the 44-group RUG model, we used the actual 2001 paid claims data to
determine the distribution of paid days. For the 53-group RUG model, we
did not have any actual claims data, and had to estimate the number of
days that would be distributed across the 53 groups. Using our
estimated distribution, we found that payments under the new 53-group
model would be lower than under the original 44-group model. As the
purpose of the refinement was to better allocate payment and not to
reduce overall expenditures, we adjusted the new CMIs upward by
applying a parity adjustment factor. In this way, we attempted to
ensure that the RUG-III model was expanded in a budget-neutral manner
(that is, one that would not cause any change in the overall level of
expenditures). We then applied a second adjustment to the CMIs to
account for the variability in the use of NTA services. These two
adjustments resulted in a combined 17.9 percent increase in the CMIs
that went into effect on January 1, 2006, as part of the case-mix
refinement implementation. A detailed description of the methods used
to make these two adjustments to the CMIs appears in the SNF PPS
proposed rule for FY 2006 (70 FR 29077 through 29078, May 19, 2005).
While we took all reasonable precautions to establish an
appropriate, budget neutral conversion from the 44-group to the 53-
group classification model, we recognized that the analyses we used to
compute the budget neutrality adjustment were based solely on estimated
data and that actual experience could be significantly different. For
this reason, in the SNF PPS final rule for FY 2006 (70 FR 45031, August
4, 2005), we committed to monitoring the accuracy and effectiveness of
the CMIs used in the 53-group model.
In monitoring recent claims data, we observed that actual
expenditures were significantly higher than what we had projected using
the 2001 data. In
[[Page 46422]]
particular, the proportion of dollars paid for patients who grouped in
the highest paying RUG categories--combining high therapy with
extensive services--greatly exceeded our projections. To determine why
expenditures so greatly exceeded our projections, we repeated the
budget neutrality analyses described earlier in this section (and as
described in the FY 2006 SNF PPS proposed rule (70 FR 29077 through
29078, May 19, 2005)), using actual 2006 claims data to determine the
distribution of paid days across the 53-group RUG model. For this
analysis, we compared simulated calendar year (CY) 2006 payments (the
first time period for which RUG-53 paid days data were available) to
payments that would have been made under the RUG-44 model. As the
introduction of the 9 new groups had not required a change to the MDS
used to classify beneficiaries, we also had all of the data necessary
to calculate accurately the distribution of paid days under the RUG-44
model. We found that estimated payments under the RUG-44 model were
still higher than under the RUG-53 model, but that our original
projections had overstated the difference. In addition, as the original
budget neutrality adjustment was overestimated, the percentage
adjustment made to the case-mix weights (after the budget neutrality
adjustment was made) to account for NTA variability also needed to be
recalibrated. Using the actual 2006 data, we found that the adjustment
necessary to achieve budget neutrality was an increase of 9.68 percent
rather than the 17.9 percent increase that had been in effect since
January 2006. Thus, from January 2006 to the present, using the 17.9
percent adjustment to the case-mix weights resulted in overpayments far
exceeding our intention of paying in a budget neutral manner. For FY
2009, we estimate the amount of overpayment at $780 million.
Although the 2001 data were the best source available at the time
the FY 2006 refinements were introduced, the distribution of paid days,
a key component in adjusting the RUG-53 case-mix weights, was based
solely on estimated utilization. The 2006 data provide a more recent
and a more accurate source of RUG-53 utilization based on actual
utilization, and are an appropriate source to use for case-mix
adjustment.
We received a number of comments questioning our legal authority to
recalibrate the case-mix weights, as well as questions on the
methodology used to make the case-mix weight adjustments. In the
following discussion, we present the concerns that the commenters
raised on this issue, and we also take the opportunity to address a
number of misconceptions about the proposed recalibration that the
comments reflected. However, in view of the potential ramifications of
this proposal and the complexity of the issues involved, we believe
that it would be prudent to take additional time to evaluate the
proposal in order to further consider consequences that may result from
it. Accordingly, we are not proceeding with the proposed recalibration
at this time, pending further analysis. We note that as we continue to
evaluate this issue, we fully expect to implement such an adjustment in
the future. The comments that we received on this issue, and our
responses, are as follows:
Comment: Several commenters stated that the need for the
recalibration arose because CMS initial projections of utilization
under the refined case-mix system proved to be inaccurate once actual
utilization data became available. They then asserted that in view of
this, the proposed recalibration represents a ``forecast error
adjustment'' that is not covered under the statutory authority to
provide for an appropriate adjustment to account for case mix (section
1888(e)(4)(G)(i) of the Act).
Response: It would be incorrect to characterize the proposed
recalibration as a ``forecast error adjustment,'' as that term refers
solely to an adjustment that compensates for an inaccurate forecast of
the annual inflation factor in the SNF market basket. By contrast, the
proposed recalibration would serve to ensure that the 2006 case-mix
refinements are implemented as intended. As such, it would be integral
to the process of providing ``* * * for an appropriate adjustment to
account for case mix'' that is based upon appropriate data in
accordance with section 1888(e)(4)(G)(i) of the Act.
Comment: A number of comments included references to the discussion
of the 2006 case-mix refinements in the SNF PPS proposed rule for FY
2006 (70 FR 29079, May 19, 2005), in which we explained that we were
``* * * advancing these proposed changes under our authority in section
101(a) of the BBRA to establish case-mix refinements, and that the
changes we are hereby proposing will represent the final adjustments
made under this authority'' (emphasis added). The commenters stated
that this earlier description of the 2006 case-mix refinements as
``final'' effectively precludes CMS from proceeding with a
recalibration, which they characterized as representing a further
refinement. Similarly, several commenters also questioned our authority
to recalibrate the case-mix system prior to the completion of the
STRIVE staff time measurement (STM) project. In addition, several
commenters questioned whether CMS has the authority to impose a budget
neutrality requirement on the introduction of a new classification
model.
Response: We wish to clarify that the actual ``refinement'' that we
proposed and implemented in the FY 2006 rulemaking cycle consisted of
our introduction of the 9 new Rehabilitation plus Extensive Services
groups at the top of the previous, 44-group RUG hierarchy, along with
the adjustment recognizing the variability of NTA use, which together
fulfilled the provisions of section 101(a) of the BBRA. The
accompanying adjustment to the case-mix indexes (CMIs) was merely a
vehicle through which we implemented that refinement. Rather than
representing a new or further ``refinement'' in itself, the proposed
recalibration merely serves to ensure that we correctly accomplish a
revision to the CMIs that accompanied the FY 2006 case-mix refinements.
In the FY 2006 final rule (70 FR 45033, August 4, 2005), we
addressed the introduction of the refinements within the broader
context of ensuring payment accuracy and beneficiary access to care. We
pointed out that
* * * this incremental change is part of this ongoing process that
will also include update activities such as the upcoming STM study
and investigation of potential alternatives to the RUG system
itself. However, the commitment to long term analysis and refinement
should not preclude the introduction of more immediate
methodological and policy updates.
Finally, the budget neutrality factor was applied to the unadjusted
RUG 53 case-mix weights that were introduced in January 2006. As stated
above, our initial analyses indicated that payments would be lower
under the RUG-53 model. As the purpose of the refinement was to
reallocate payments, and not to reduce expenditures, we believe that
increasing the case-mix weights to equalize payments under the two
models is an appropriate exercise of our broad authority to establish
an appropriate case-mix system. We further note that the FY 2006
refinement to the case-mix classification system using adjusted CMIs
was implemented through the rulemaking process, and we received no
comments on the use of a budget neutrality adjustment at that time.
We also received a number of technical comments on the potential
effects of implementing this
[[Page 46423]]
recalibration proposal on beneficiaries, providers, and the overall
economy. These comments are summarized below.
Comment: Some commenters opposed the recalibration of the budget
neutrality adjustment, believing that the change to the case-mix
weights would ``take back'' payments to providers that had increased
due to changes in case mix between 2001 and 2006. Specifically, several
commenters expressed the belief that by proposing to recalibrate the
case-mix weights put into place for the RUG-53 system, we are
incorrectly identifying increased payments related to treatment of
higher case-mix patients with an overpayment related to the use of an
incorrect budget neutrality adjustment factor applied in January 2006.
Another commenter believed that the proposed recalibration could be
more accurately calculated using either 2005 data or a combination of
2005 and 2006 data.
Response: We agree that, on average, the case-mix indexes for
current SNF patients are higher than they were in 2001. However, we
believe this concern erroneously equates the introduction of a new
classification model with the regular SNF PPS annual update process.
Normally, changes in case mix are accommodated as the classification
model identifies changes in case mix and assigns the appropriate RUG
group. Actual payments will typically vary from projections since case-
mix changes, which occur for a variety of reasons, cannot be
anticipated in an impact analysis.
However, in January 2006, we did more than just update the payment
rates; we introduced a new classification model, the RUG-53 case-mix
system. As discussed above, the purpose of this refined model was to
redistribute payments across the 53 groups while maintaining the same
total expenditure level that we would have incurred had we retained the
original 44-group RUG model.
In testing the two models, we used 2001 data because it was the
best data we had available, and found that using the raw weights
calculated for the RUG-53 model, we could expect aggregate payments to
decrease as a result of introducing the refinement. To prevent this
expected reduction in Medicare expenditures, we applied an adjustment
to the RUG-53 case-mix weights as described in detail earlier in this
section. Later analysis using actual 2006 data showed that, rather than
achieving budget neutrality between the two models, expenditures were
significantly higher than intended. For FY 2009, expenditures are
estimated to be $780 million higher than intended.
We do not agree that updating our analysis using CY 2006 data
captured payments related to increased case mix rather than
establishing budget neutrality between the two models. First, by using
2006 data to estimate expenditures under both models, the same case-mix
changes are incorporated into the estimated expenditure levels for RUG-
44 as well as for RUG-53. Second, we believe it is appropriate to
standardize the new model for the time period in which it is being
introduced. The only reason we used 2001 data in the original
calculation is that it was the best data available at the time. The CY
2006 data allowed us to calibrate the RUG-53 model more precisely for
its first year of operation.
One commenter recommended using alternative time periods in
calculating the budget neutrality adjustment. However, while it might
be possible to use CY 2005 rather than CY 2006 data, using CY 2005 data
still requires us to use a projection of the distributional shift to
the nine new groups in the RUG-53 group model. We also looked at a
second recommended alternative, which involved comparing quarterly data
periods directly before and after implementation of the RUG-53 model;
that is, October through December 2005 for the RUG-44 model and January
through March 2006 for the RUG-53 model. Our preliminary analyses
confirmed that the proposed recalibration would serve to ensure that
the 2006 case-mix refinements are implemented as actually intended.
However, we believe that using actual utilization data for CY 2006 is
more accurate, since actual case mix during the calibration year is the
basis for computing the case-mix adjustment. We have determined that
using the 2006 data instead of the suggested alternatives are the most
appropriate to adopt.
It is important to stress that this recalibration was not designed
to adjust for aggregate payment differences that result from changes in
the coding or classification of residents not reflective of real
changes in case mix; that is, case-mix creep. Monitoring the changes in
case mix under RUG-53 over the years since RUG-53 has been in place is
part of a longer-term effort. If we find that a pattern of coding or
the classification of residents does not reflect real changes in case
mix over several years, we would propose a documentation and coding
adjustment, pursuant to Sec. 1888(e)(4)(F) of the Act. By contrast,
the original application of a budget neutrality factor and the
recalibration of that factor discussed in this final rule represented
the mechanism that we used to establish the appropriate baseline for
expenditures under the refined classification model (that is, the
change from RUG-44 to RUG-53).
Comment: Some commenters argued against implementing the proposed
recalibration, asserting that it is important to maintain Medicare SNF
payments at their current levels in order to cross-subsidize what they
characterized as inadequate payment rates for nursing facilities under
the Medicaid program. Other commenters asserted that a shift in
patients from Inpatient Rehabilitation Facilities (IRFs) to SNFs
results in savings to the Medicare Trust Fund and that the current SNF
spending levels are needed to treat the types of patients SNFs are now
receiving.
Response: Even though we are not moving forward at this time with
the proposed recalibration, we wish to be clear that it is not the
appropriate role of the Medicare SNF benefit to cross-subsidize nursing
home payments made under the Medicaid program. We note that MedPAC
stated it is inappropriate for the Medicare program's SNF payments to
cross-subsidize Medicaid nursing facility rates. Specifically, on page
152 of its March 2008 Report to the Congress on Medicare Payment Policy
(which is available online at https://medpac.gov/documents/Mar08_
EntireReport.pdf), MedPAC stated:
There are several reasons why Medicare cross-subsidization is
not advisable policy for the Medicare program. On average, Medicare
payments accounted for 21 percent of revenues to freestanding SNFs
in 2006. As a result, the policy would use a minority of Medicare
payments to subsidize a majority of Medicaid payments. If Medicare
were to pay still higher rates, facilities with high shares of
Medicare payments--presumably the facilities that need revenues the
least--would receive the most in subsidies from the higher Medicare
payments. In other words, the subsidy would be poorly targeted.
Given the variation among states in the level and method of nursing
home payments, the impact of the subsidy would be highly variable;
in states where Medicaid payments were adequate, it would have no
positive impact. In addition, increasing Medicare's payment rates
could encourage states to reduce Medicaid payments further and, in
turn, result in pressure to again raise Medicare rates. It could
also encourage providers to select patients based on payer source or
to rehospitalize dual-eligible patients so that they qualified for a
Medicare-covered, and higher payment, stay.
We agree with MedPAC and, therefore, do not agree with the
commenters that cited cross-subsidizing Medicaid as a justification for
maintaining Medicare SNF payments at any specific level.
[[Page 46424]]
Regarding the comments about a shift of patients from IRFs to SNFs
producing savings to the Medicare Trust Fund, and the need to maintain
current SNF spending levels to treat the types of patients SNFs are now
receiving, we note that a basic principle of the SNF PPS is to pay
appropriately for the services provided. CMS data are consistent with
the commenters' assertions that many patients formerly being treated in
IRFs are now being treated in SNFs or Home Health Agencies. In fact,
the CY 2006 distribution used to recalibrate the case-mix adjustments
indicates that there are more patients in the 9 new RUGs than we
originally anticipated and patients shifting from IRFs could be a
partial explanation.
Patients who shifted to SNFs or other settings from IRFs due to
``75 Percent Rule'' compliance percentage requirements represent a
population that was not appropriate for IRF care, and CMS payments for
those IRF stays would represent an overpayment to IRFs. For those
former IRF patients who are appropriate for SNF care, we must pay the
appropriate rate for the SNF services provided, and cannot use a
reduction in IRF overpayments as a reason to increase payments under
the SNF PPS. SNF patients with more intensive therapy and extensive
service needs will be paid the higher amounts associated with the 9 new
groups. While we are not moving forward with the proposed recalibration
at this time, it is still important to understand that recalibrating
CMIs would not change the relative nature of higher payments for
patients using more staff resources and services.
Comment: One commenter claimed that CMS did not make the data and
analysis underlying the proposed recalibration of the budget neutrality
adjustment publicly available.
Response: We do not agree with the commenter's assertion. The
methodology used to establish the case-mix adjustments is the same as
that described in detail in the FY 2006 SNF PPS proposed rule (70 FR
29077 through 29078, May 19, 2005). In addition, the data used to
calculate the adjustments are publicly available on the CMS Web site.
We used the CY 2006 days of service (available in the downloads section
of our Web site at https://www.cms.hhs.gov/SNFPPS/02_
Highlights.asp#TopOfPage) for both the RUG-44 and RUG-53 systems. We
multiplied the CY 2006 days of service by the FY 2008 unadjusted
Federal per diem payment rate components (72 FR 43416) multiplied by
the unadjusted case-mix indexes (available in the Downloads section of
our Web site at https://www.cms.hhs.gov/SNFPPS/09_
RUGRefinement.asp#TopOfPage) to establish expenditures under the RUG-44
and RUG-53 systems. The budget neutrality adjustment was determined as
the percentage increase necessary for the nursing CMIs to generate
estimated expenditure levels under the RUG-53 system that were equal to
estimated expenditure levels under the RUG-44 system. We then
calculated a second adjustment factor to increase the baseline by an
amount that served to offset the variability in NTA utilization.
As discussed above, we are confident that we employed the correct
methodology to evaluate the accuracy with which we implemented the 2006
refinements. However, in view of the widespread industry concern that a
recalibration could potentially have adverse effects on beneficiaries
and SNF clinical staff, and could negatively affect the quality of SNF
care, we believe that the most prudent course is to continue to
evaluate these issues carefully before proceeding. Thus, we will not
proceed with the recalibration for FY 2009, but will instead continue
to evaluate the data, and further consider consequences that may result
from the recalibration. We note that as we continue to evaluate this
issue, we fully expect to implement such an adjustment in the future.
Therefore, for FY 2009, the case-mix indexes shown in Tables 4 and 5
below remain the same as those adopted in FY 2006. As always, we list
the case-mix adjusted payment rates separately for urban and rural
SNFs, with the corresponding case-mix values. We note that these tables
do not reflect the AIDS add-on enacted by section 511 of the MMA, which
we apply only after making all other adjustments (wage and case-mix).
Table 4--RUG-53 Case-Mix Adjusted Federal Rates and Associated Indexes--Urban
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Nursing Therapy Non-case mix Non-case mix
RUG-III category Nursing index Therapy index component component therapy comp component Total rate
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RUX..................................... 1.9 2.25 288.31 257.18 .............. 77.44 622.93
RUL..................................... 1.4 2.25 212.44 257.18 .............. 77.44 547.06
RVX..................................... 1.54