Medicare Program; Revisions to FY 2009 Medicare Severity-Long-Term Care Diagnosis-Related Group (MS-LTC-DRG) Weights, 26546-26569 [E9-12911]

Download as PDF 26546 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations Federalism (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104–4). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104–113, section 12(d) (15 U.S.C. 272 note). VIII. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 et seq., generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the Federal Register. This final rule is not a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 180 Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements. Dated: May 20, 2009. W. Michael McDavit, Acting Director, Biopesticides and Pollution Prevention Division, Office of Pesticide Programs. Therefore, 40 CFR chapter I is amended as follows: ■ PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: ■ Authority: 21 U.S.C. 321(q), 346a and 371. 2. Section 180.1206(b) is revised to read as follows: dwashington3 on PROD1PC60 with RULES ■ § 180.1206 Aspergillus flavus AF36, exemption from the requirement of a tolerance. * * * * * (b) Aspergillus flavus AF36 is temporarily exempt from the requirement of a tolerance on pistachio when used in accordance with the Experimental Use Permit, EPA File VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 Symbol 71693–EUP–1. This temporary exemption from tolerance expires on December 31, 2011. * * * * * [FR Doc. E9–12788 Filed 6–2–09; 8:45 am] BILLING CODE 6560–50–S DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 412 [CMS–1337–IFC] RIN 0938–AP76 Medicare Program; Revisions to FY 2009 Medicare Severity-Long-Term Care Diagnosis-Related Group (MS– LTC–DRG) Weights AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Interim final rule with comment period. SUMMARY: This interim final rule with comment period implements revised Medicare severity long-term care diagnosis-related group (MS–LTC–DRG) relative weights for payment under the long-term care hospital (LTCH) prospective payment system (PPS) for federal fiscal year (FY) 2009. We are revising the MS–LTC–DRG relative weights for FY 2009 due to the misapplication of our established methodology in the calculation of the budget neutrality factor. The revised FY 2009 MS–LTC–DRG relative weights are effective for the remainder of FY 2009 (that is, from June 3, 2009 through September 30, 2009). DATES: Effective date: These regulations are effective on June 3, 2009. Comment date: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m., June 29, 2009. ADDRESSES: In commenting, please refer to file code CMS–1337–IFC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. You may submit comments in one of four ways (please choose only one of the ways listed): 1. Electronically. You may submit electronic comments on this regulation to https://www.regulations.gov. Follow the instructions under the ‘‘More Search Options’’ tab. 2. By regular mail. You may mail written comments to the following PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1337–IFC, P.O. Box 8011, Baltimore, MD 21244–8011. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1337–IFC, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD 21244–1850. 4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses: a. For delivery in Washington, DC— Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445–G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201. (Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) b. For delivery in Baltimore, MD— Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244–1850. If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786– 9994 in advance to schedule your arrival with one of our staff members. Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period has ended. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Tzvi Hefter, (410) 786–4487. SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the E:\FR\FM\03JNR1.SGM 03JNR1 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations comment period on the following Web site as soon as possible after they have been received: https://regulations.gov. Follow the search instructions on that Web site to view public comments. Comments received timely will be also available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1–800–743–3951. I. Background of the LTCH PPS dwashington3 on PROD1PC60 with RULES A. Legislative and Regulatory Authority Section 123 of the Medicare, Medicaid, and SCHIP (State Children’s Health Insurance Program) Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106–113) as amended by section 307(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106–554) provides for payment for both the operating and capital-related costs of hospital inpatient stays in long-term care hospitals (LTCHs) under Medicare Part A based on prospectively set rates. The Medicare prospective payment system (PPS) for LTCHs applies to hospitals that are described in section 1886(d)(1)(B)(iv) of the Social Security Act (the Act), effective for cost reporting periods beginning on or after October 1, 2002. In the August 30, 2002 (67 FR 55954) Federal Register, we issued a final rule that implemented the LTCH PPS authorized under the BBRA and BIPA. The same final rule established regulations for the LTCH PPS under 42 CFR Part 412, Subpart O. This system currently uses information from LTCH patient records to classify patients into distinct Medicare Severity-long-term care diagnosis-related groups (MS–LTC– DRGs) based on clinical characteristics and expected resource needs. Payments are calculated for each MS–LTC–DRG and provisions are made for appropriate payment adjustments. Payment rates under the LTCH PPS are updated annually and published in the Federal Register. We refer readers to the August 30, 2002 (67 FR 55954) final rule for a comprehensive discussion of the research and data that supported the establishment of the LTCH PPS. B. Annual Updates to the LTCH PPS For rate years (RYs) 2004 through 2009, annual payment rate update and VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 policy changes under the LTCH PPS were effective beginning on July 1 of each year (RY 2009 is the 15-month rate period July 1, 2008 through September 30, 2009 (see § 412.503)). However, the annual updates of the LTC–DRG (and, beginning in FY 2008, the MS–LTC– DRG) classifications and relative weights for LTCHs are linked to the annual update of the acute care hospital inpatient prospective payment system (IPPS) DRGs and are effective each October 1. The most recent annual update to the payment rates and policy changes under the LTCH PPS was established in the RY 2009 LTCH PPS final rule (73 FR 26788 through 26874), and is currently effective for the 15-month rate year of July 1, 2008 through September 30, 2009. The most recent annual update to the MS–LTC–DRGs was established in the FY 2009 IPPS final rule (73 FR 48528 through 48551), and is currently effective October 1, 2008 through September 30, 2009. Beginning with October 1, 2009, the annual updates to the LTCH PPS rates and factors, including the relative weights, and other payment policy changes are effective on October 1. II. Provisions of This Interim Final Rule With Comment Period A. FY 2009 MS–LTC–DRG Relative Weights Beginning with the FY 2008 update, we established a budget neutrality requirement for the annual update to the MS–LTC–DRG classifications and relative weights at § 412.517(b) (in conjunction with § 412.503), such that estimated aggregate LTCH PPS payments would be unaffected, that is, would be neither greater than nor less than the estimated aggregate LTCH PPS payments that would have been made without the classification and relative weight changes. (See the May 11, 2007 LTCH PPS final rule (72 FR 26882 through 26884).) Consistent with § 412.517(b), in the FY 2009 IPPS final rule (August 19, 2008, (73 FR 48550 through 48551)), using the most recent data available at that time (FY 2007 LTCH claims data from the March 2008 update of the MedPAR files), we established the MS– LTC–DRG classifications and relative weights for FY 2009 based on the application of budget neutrality adjustment factors determined using the two-step methodology of calculating and applying a normalization factor and a budget neutrality factor, as initially established in the FY 2008 IPPS final rule (August 22, 2007, (72 FR 47295 through 47296)). Specifically, for FY PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 26547 2009, under the first step of the established two-step budget neutrality methodology, after recalibrating the MS–LTC–DRG relative weights, we calculated and applied a normalization factor of 1.03887 to those relative weights to ensure that the average casemix index (CMI) is not influenced by changes in the composition of case types or the changes to the classification system, such that the recalibration process itself neither increases nor decreases the average CMI. In doing so, each (recalibrated) MS–LTC–DRG relative weight was multiplied by 1.03887 to produce ‘‘normalized relative weights’’. Under the second step of the established two-step budget neutrality methodology, we calculated and applied a ‘‘budget neutrality adjustment factor’’ to ensure that estimated aggregate LTCH PPS payments after reclassification and recalibration would be equal to estimated aggregate LTCH PPS payments before reclassification and recalibration. Specifically, as described in the FY 2009 IPPS final rule (73 FR 48551), we calculated a budget neutrality factor of 1.04186 by comparing estimated total payments using the normalized FY 2009 relative weights under GROUPER Version 26.0 to estimated total payments using the FY 2008 GROUPER (Version 25.0) and FY 2008 MS–LTC–DRG relative weights. Then, each of the normalized relative weights was multiplied by that budget neutrality factor to determine the budget neutral relative weight for each MS– LTC–DRG for FY 2009. Thus, the FY 2009 MS–LTC–DRG relative weights established in Table 11 of the Addendum of the FY 2009 IPPS final rule reflect the application of both the normalization factor of 1.03887 and the budget neutrality factor of 1.04186. We have discovered that, in determining the published FY 2009 MS–LTC–DRG relative weights, we did not properly apply the established methodology for calculating the budget neutrality factor (the second step of the budget neutrality methodology, as set forth in the FY 2009 IPPS final rule (73 FR 48550 through 48551). Specifically, upon recent review of the calculation of the budget neutrality factor of 1.04186, we found that it was determined using the unadjusted recalibrated relative weights rather than using the normalized relative weights. This is inconsistent with our stated methodology for the calculation of the FY 2009 budget neutrality factor (that is, the second step of the budget neutrality methodology). As described above and as we stated in the FY 2009 IPPS final rule (73 FR 48551), the FY 2009 budget E:\FR\FM\03JNR1.SGM 03JNR1 dwashington3 on PROD1PC60 with RULES 26548 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations neutrality factor is to be determined based on estimated total payments using the normalized (recalibrated) relative weights under GROUPER Version 26.0 (not the unadjusted recalibrated relative weights as were used in calculating the budget neutrality factor of 1.04186 published in the FY 2009 IPPS final rule). This misapplication of the rule’s established methodology for calculating the budget neutrality factors resulted in relative weights that are higher, by approximately 3.9 percent. We estimate aggregate annualized LTCH PPS payments in FY 2009 (that is, for discharges occurring on or after October 1, 2008 through September 30, 2009) based on the MS–LTC–DRG relative weights published in the FY 2009 IPPS final rule to be approximately $130 million greater than what the increase would have been had the FY 2009 budget neutrality factor been calculated consistent with the established methodology described in that final rule. Thus, the FY 2009 MS–LTC–DRG relative weights shown in Table 11 of the FY 2009 IPPS final rule (73 FR 49041 through 49062) are inconsistent with the established budget neutrality methodology used for the annual update to the MS–LTC–DRG classifications and relative weights. Consistent with our general and longstanding policy in PPS contexts, we do not make retroactive changes to correct past errors in PPS rate-setting, regardless of whether an error resulted in higher payments to providers (as in this situation) or lower payments to providers; we also do not make prospective adjustments to PPS rates to account for errors that occurred in prior periods, regardless of whether an error resulted in higher payments or lower payments to providers. In this instance, we are, revising the FY 2009 MS–LTC– DRG relative weights to ensure proper application of the established budget neutrality methodology in updating the FY 2008 MS–LTC–DRG relative weights to FY 2009 during the fiscal year that will be effective for the remainder of the fiscal year. We note that this prospective revision to the FY 2009 MS–LTC–DRG relative weights does not reflect a change in the established budget neutrality methodology itself, but rather, reflects the proper calculation of the relative weights under the rule’s stated methodology. In this interim final rule with comment period, we have calculated revised FY 2009 MS–LTC–DRG relative weights (effective prospectively for the remainder of FY 2009) based on the proper application of the established budget neutrality methodology. Specifically, using the same data (FY VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 2007 LTCH claims data from the March 2008 update of the MedPAR files) and methodology presented in the FY 2009 IPPS final rule (73 FR 48551) described above, we have determined a budget neutrality factor of 1.0030401, which was applied to the normalized relative weights (that is, the recalibrated relative weights adjusted by the normalization factor of 1.03887, as described above). As a result, we are establishing revised FY 2009 MS–LTC–DRG relative weights (shown in Table 11 of this interim final rule with comment period) that are effective for LTCH PPS discharges occurring on or after June 3, 2009 through September 30, 2009. The revised FY 2009 MS–LTC–DRG relative weights in Table 11 of this interim final rule with comment period reflect the application of the revised FY 2009 budget neutrality factor 1.0030401 and the FY 2009 normalization factor of 1.03887 (established in the FY 2009 IPPS final rule (73 FR 48551)). (For the convenience of the reader, in addition to the revised budget neutral FY 2009 MS– LTC–DRG relative weights effective June 3, 2009 through September 30, 2009, Table 11 also includes the geometric mean length of stay and five-sixths of the geometric mean length of stay (Short-Stay Outlier (SSO) Threshold for payments under § 412.529) for each MS–LTC–DRG for FY 2009. The revision to the FY 2009 budget neutrality factor did not affect the calculation of the geometric mean length of stay and the SSO threshold for FY 2009 that were presented in Table 11 of the FY 2009 IPPS final rule.) B. Effect on the Proposed RY 2010 MS– LTC–DRG Relative Weights and FixedLoss Amount As discussed above in section II.A. of this interim final rule with comment period, we are revising the published FY 2009 MS–LTC–DRG relative weights (73 FR 49041 through 49062), based on the appropriate application of the FY 2009 budget neutrality factor, consistent with the description of our established methodology. Because the proposed RY 2010 MS–LTC–DRG relative weights published in the FY 2010 IPPS and RY 2010 LTCH PPS proposed rule on May 22, 2009 (74 FR 24589 through 24608) were determined based on the published FY 2009 MS–LTC–DRG relative weights, the revisions to the published FY 2009 MS–LTC–DRG relative weights discussed in section II.A. of this interim final rule with comment period affect the determination of the proposed RY 2010 MS–LTC–DRG relative weights. Therefore, we are also presenting proposed RY 2010 MS–LTC–DRG PO 00000 Frm 00038 Fmt 4700 Sfmt 4700 relative weights in a supplemental proposed rule published elsewhere in this Federal Register. The proposed RY 2010 MS–LTC–DRG relative weights were determined consistent with the proposed two-step budget neutrality methodology discussed in the FY 2010 IPPS and RY 2010 LTCH PPS proposed rule (74 FR 24226 through 24227). We also note that the proposed RY 2010 HCO fixed-loss amount presented in the FY 2010 IPPS and RY 2010 LTCH PPS proposed rule (74 FR 24268) was determined based on the proposed RY 2010 MS–LTC–DRG relative weights presented in Table 11 of that proposed rule. Thus, the supplemental proposed rule published elsewhere in this Federal Register also determines a proposed RY 2010 HCO fixed-loss amount based on the proposed RY 2010 MS–LTC–DRG relative weights presented in that same supplemental proposed rule. III. Response to Comments Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document. IV. Waiver of Proposed Rulemaking, Delay of Effective Date, and 60-Day Comment Period We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before provisions of a rule such as this take effect. We also ordinarily provide a 30-day delay in effective date of a rule in accordance with section 553(d) of the Administrative Procedure Act (APA) (5 U.S.C. 553(d)), and section 1871 of the Act. However, we can waive both the prior notice-and-comment procedure or the delay in effective date, if the Secretary for good cause finds that it is impracticable, unnecessary, or contrary to the public interest and incorporates a statement of the finding and its reasons in the notice issued. We believe it is unnecessary to undertake prior notice and comment rulemaking or provide a delay in effective date because this interim final rule with comment period simply reflects the appropriate application of the established methodology set forth in the FY 2009 IPPS final rule (73 FR 48550 through 48551). The LTCH statute provides for annual updates to the LTCH PPS MS–LTC–DRG relative E:\FR\FM\03JNR1.SGM 03JNR1 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations weights, and the methodologies used to update the MS–LTC–DRG relative weights have been previously subject to public comment, and therefore, additional comment would be unnecessary. Moreover, we believe that it is impracticable to undertake prior notice and comment rulemaking or provide a delay in effective date because this interim final rule with comment period is making a prospective revision to the FY 2009 MS–LTC–DRG relative weights to reflect proper application of the applicable established methodology, and therefore should be applied in as timely a manner as possible. For the reasons set forth above, we find good cause to waive notice-and-comment procedures, as well as the 30-day delay in effective date. In addition, we ordinarily publish an interim final rule with comment period in the Federal Register and permit a 60day comment period, as provided in section 1871(b)(1) of the Act. This period, however, may be shortened, as provided under section 1871(b)(2)(C), when the agency finds good cause that a 60-day comment period would be impracticable, unnecessary, or contrary to the public interest and incorporates a statement of the finding and its reasons in the rule issued. For the reasons set forth above, and because we plan to finalize the provisions of this interim final rule with comment period at the same time that the FY 2010 IPPS and RY 2010 LTCH PPS proposed rule is finalized, we are waiving the 60-day comment period for good cause and allowing a 30-day comment period instead. dwashington3 on PROD1PC60 with RULES V. 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. Chapter 35). VI. Regulatory Impact Analysis We have examined the impacts of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96–354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4), Executive Order 13132 on Federalism, and the Congressional Review Act (5 U.S.C. 804(2)). Executive Order 12866 directs agencies to assess all costs and benefits VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year). The revision to the FY 2009 MS–LTC– DRG relative weights presented in section II.A. of this interim final rule with comment period will affect LTCH PPS payments for discharges occurring for approximately the last 4 months of FY 2009. Specifically, we estimate that the impact of the revision to the FY 2009 MS–LTC–DRG relative weights effective from June 3, 2009 through September 30, 2009 would result in an aggregate decrease in FY 2009 LTCH PPS payments of approximately $43 million (or approximately 0.9 percent of estimated FY 2009 LTCH PPS payments). Because the distributional effects and estimated changes to the Medicare program payments would not be greater than $100 million, this interim final rule with comment period would not be considered a major economic rule, as defined in this section. The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small government jurisdictions. Most hospitals and most other providers and suppliers are considered to be small entities, either by being nonprofit organizations or by meeting the Small Business Administration definition of a small business (having revenues of $34.5 million or less in any 1 year). (For details on the latest standards for heath care providers, we refer readers to the Table of Small Business Size Standards for NAIC 622 found on the Small Business Administration Office of Size Standards Web site at: https:// www.sba.gov/contractingopportunities/ officials/size/GC-SMALL-BUS-SIZESTANDARDS.html.) For purposes of the RFA, all hospitals and other providers and suppliers are considered to be small entities. Individuals and States are not included in the definition of a small entity. Because we lack data on individual hospital receipts, we cannot determine the number of small proprietary LTCHs. Therefore, we are assuming that all LTCHs are considered small entities for the purpose of the analysis in this section. Because we acknowledge that many of the affected entities are small entities, the analysis PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 26549 discussed in this section constitutes our regulatory flexibility analysis. Therefore, we are soliciting public comments on our estimates and analysis of the impact of the provisions of this interim final rule with comment period on those small entities. In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. In our database of 399 LTCHs, we have identified 26 small rural hospitals that account for less than 5 percent of all LTCH cases. As stated above, the provisions of this interim final rule with comment period will result in a decrease in estimated aggregate LTCH PPS payments in FY 2009 of approximately $43 million (or approximately 0.9 percent) for all LTCHs. Similarly, for the 26 rural LTCHs for which data is available, we estimate that the provisions of this interim final rule with comment period will result in a decrease in estimated aggregate LTCH PPS payments to rural LTCHs in FY 2009 of approximately 0.9 percent (or about $1.6 million). Therefore, we believe this rule will not have a significant impact on small rural hospitals. Accordingly, the Secretary certifies that this interim final rule with comment period would not have a significant economic impact on the operations of a substantial number of small rural hospitals. Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2009, that threshold level is currently approximately $133 million. This interim final rule with comment period would not mandate any requirements for State, local, or tribal governments, nor would it result in expenditures by the private sector of $133 million or more in any one year. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Since this regulation does not impose E:\FR\FM\03JNR1.SGM 03JNR1 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations any costs on State or local governments, the requirements of Executive Order 13132 are not applicable. In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget. Medicare—Supplementary Medical Insurance Program) Approved: May 27, 2009. Kathleen Sebelius, Secretary. [Editorial Note: The following table will not appear in the Code of Federal Regulations.] dwashington3 on PROD1PC60 with RULES (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 Dated: May 21, 2009. Charlene Frizzera, Acting Administrator, Centers for Medicare & Medicaid Services. BILLING CODE 4120–01–P PO 00000 Frm 00040 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.000</GPH> 26550 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00041 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26551 ER03JN09.001</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00042 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.002</GPH> dwashington3 on PROD1PC60 with RULES 26552 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00043 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26553 ER03JN09.003</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00044 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.004</GPH> dwashington3 on PROD1PC60 with RULES 26554 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00045 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26555 ER03JN09.005</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00046 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.006</GPH> dwashington3 on PROD1PC60 with RULES 26556 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00047 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26557 ER03JN09.007</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00048 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.008</GPH> dwashington3 on PROD1PC60 with RULES 26558 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00049 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26559 ER03JN09.009</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00050 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.010</GPH> dwashington3 on PROD1PC60 with RULES 26560 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00051 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26561 ER03JN09.011</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00052 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.012</GPH> dwashington3 on PROD1PC60 with RULES 26562 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00053 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26563 ER03JN09.013</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00054 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.014</GPH> dwashington3 on PROD1PC60 with RULES 26564 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00055 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26565 ER03JN09.015</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00056 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.016</GPH> dwashington3 on PROD1PC60 with RULES 26566 VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00057 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 26567 ER03JN09.017</GPH> dwashington3 on PROD1PC60 with RULES Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations VerDate Nov<24>2008 Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations 15:33 Jun 02, 2009 Jkt 217001 PO 00000 Frm 00058 Fmt 4700 Sfmt 4725 E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.018</GPH> dwashington3 on PROD1PC60 with RULES 26568 [FR Doc. E9–12911 Filed 5–29–09; 4:15 pm] BILLING CODE 4120–01–C DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency 44 CFR Part 64 [Docket ID FEMA–2008–0020; Internal Agency Docket No. FEMA–8077] Suspension of Community Eligibility dwashington3 on PROD1PC60 with RULES AGENCY: Federal Emergency Management Agency, DHS. ACTION: Final rule. SUMMARY: This rule identifies communities, where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP), that are scheduled for suspension on the effective dates listed within this rule because of noncompliance with the floodplain management requirements of the program. If the Federal Emergency Management Agency (FEMA) receives documentation that the community has adopted the required floodplain management measures prior to the effective suspension date given in this rule, the suspension will not occur and a notice of this will be provided by publication in the Federal Register on a subsequent date. DATES: Effective Dates: The effective date of each community’s scheduled VerDate Nov<24>2008 15:33 Jun 02, 2009 Jkt 217001 suspension is the third date (‘‘Susp’’) listed in the third column of the following tables. FOR FURTHER INFORMATION CONTACT: If you want to determine whether a particular community was suspended on the suspension date or for further information, contact David Stearrett, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472, (202) 646–2953. SUPPLEMENTARY INFORMATION: The NFIP enables property owners to purchase flood insurance which is generally not otherwise available. In return, communities agree to adopt and administer local floodplain management aimed at protecting lives and new construction from future flooding. Section 1315 of the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022, prohibits flood insurance coverage as authorized under the NFIP, 42 U.S.C. 4001 et seq.; unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed in this document no longer meet that statutory requirement for compliance with program regulations, 44 CFR part 59. Accordingly, the communities will be suspended on the effective date in the third column. As of that date, flood insurance will no longer be available in the community. However, some of these communities may adopt and submit the required documentation of legally enforceable floodplain management measures after this rule is published but PO 00000 Frm 00059 Fmt 4700 Sfmt 4700 26569 prior to the actual suspension date. These communities will not be suspended and will continue their eligibility for the sale of insurance. A notice withdrawing the suspension of the communities will be published in the Federal Register. In addition, FEMA has identified the Special Flood Hazard Areas (SFHAs) in these communities by publishing a Flood Insurance Rate Map (FIRM). The date of the FIRM, if one has been published, is indicated in the fourth column of the table. No direct Federal financial assistance (except assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act not in connection with a flood) may legally be provided for construction or acquisition of buildings in identified SFHAs for communities not participating in the NFIP and identified for more than a year, on FEMA’s initial flood insurance map of the community as having flood-prone areas (section 202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a), as amended). This prohibition against certain types of Federal assistance becomes effective for the communities listed on the date shown in the last column. The Administrator finds that notice and public comment under 5 U.S.C. 553(b) are impracticable and unnecessary because communities listed in this final rule have been adequately notified. Each community receives 6-month, 90-day, and 30-day notification letters addressed to the Chief Executive Officer stating that the community will be E:\FR\FM\03JNR1.SGM 03JNR1 ER03JN09.019</GPH> Federal Register / Vol. 74, No. 105 / Wednesday, June 3, 2009 / Rules and Regulations

Agencies

[Federal Register Volume 74, Number 105 (Wednesday, June 3, 2009)]
[Rules and Regulations]
[Pages 26546-26569]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12911]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1337-IFC]
RIN 0938-AP76


Medicare Program; Revisions to FY 2009 Medicare Severity-Long-
Term Care Diagnosis-Related Group (MS-LTC-DRG) Weights

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

ACTION: Interim final rule with comment period.

-----------------------------------------------------------------------

SUMMARY: This interim final rule with comment period implements revised 
Medicare severity long-term care diagnosis-related group (MS-LTC-DRG) 
relative weights for payment under the long-term care hospital (LTCH) 
prospective payment system (PPS) for federal fiscal year (FY) 2009. We 
are revising the MS-LTC-DRG relative weights for FY 2009 due to the 
misapplication of our established methodology in the calculation of the 
budget neutrality factor. The revised FY 2009 MS-LTC-DRG relative 
weights are effective for the remainder of FY 2009 (that is, from June 
3, 2009 through September 30, 2009).

DATES: Effective date: These regulations are effective on June 3, 2009.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m., 
June 29, 2009.

ADDRESSES: In commenting, please refer to file code CMS-1337-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the instructions under 
the ``More Search Options'' tab.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1337-IFC, P.O. Box 8011, 
Baltimore, MD 21244-8011.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address only: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1337-IFC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period has ended.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Tzvi Hefter, (410) 786-4487.

SUPPLEMENTARY INFORMATION:
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the

[[Page 26547]]

comment period on the following Web site as soon as possible after they 
have been received: https://regulations.gov. Follow the search 
instructions on that Web site to view public comments.
    Comments received timely will be also available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Background of the LTCH PPS

A. Legislative and Regulatory Authority

    Section 123 of the Medicare, Medicaid, and SCHIP (State Children's 
Health Insurance Program) Balanced Budget Refinement Act of 1999 (BBRA) 
(Pub. L. 106-113) as amended by section 307(b) of the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(BIPA) (Pub. L. 106-554) provides for payment for both the operating 
and capital-related costs of hospital inpatient stays in long-term care 
hospitals (LTCHs) under Medicare Part A based on prospectively set 
rates. The Medicare prospective payment system (PPS) for LTCHs applies 
to hospitals that are described in section 1886(d)(1)(B)(iv) of the 
Social Security Act (the Act), effective for cost reporting periods 
beginning on or after October 1, 2002.
    In the August 30, 2002 (67 FR 55954) Federal Register, we issued a 
final rule that implemented the LTCH PPS authorized under the BBRA and 
BIPA. The same final rule established regulations for the LTCH PPS 
under 42 CFR Part 412, Subpart O. This system currently uses 
information from LTCH patient records to classify patients into 
distinct Medicare Severity-long-term care diagnosis-related groups (MS-
LTC-DRGs) based on clinical characteristics and expected resource 
needs. Payments are calculated for each MS-LTC-DRG and provisions are 
made for appropriate payment adjustments. Payment rates under the LTCH 
PPS are updated annually and published in the Federal Register. We 
refer readers to the August 30, 2002 (67 FR 55954) final rule for a 
comprehensive discussion of the research and data that supported the 
establishment of the LTCH PPS.

B. Annual Updates to the LTCH PPS

    For rate years (RYs) 2004 through 2009, annual payment rate update 
and policy changes under the LTCH PPS were effective beginning on July 
1 of each year (RY 2009 is the 15-month rate period July 1, 2008 
through September 30, 2009 (see Sec.  412.503)). However, the annual 
updates of the LTC-DRG (and, beginning in FY 2008, the MS-LTC-DRG) 
classifications and relative weights for LTCHs are linked to the annual 
update of the acute care hospital inpatient prospective payment system 
(IPPS) DRGs and are effective each October 1.
    The most recent annual update to the payment rates and policy 
changes under the LTCH PPS was established in the RY 2009 LTCH PPS 
final rule (73 FR 26788 through 26874), and is currently effective for 
the 15-month rate year of July 1, 2008 through September 30, 2009. The 
most recent annual update to the MS-LTC-DRGs was established in the FY 
2009 IPPS final rule (73 FR 48528 through 48551), and is currently 
effective October 1, 2008 through September 30, 2009.
    Beginning with October 1, 2009, the annual updates to the LTCH PPS 
rates and factors, including the relative weights, and other payment 
policy changes are effective on October 1.

II. Provisions of This Interim Final Rule With Comment Period

A. FY 2009 MS-LTC-DRG Relative Weights

    Beginning with the FY 2008 update, we established a budget 
neutrality requirement for the annual update to the MS-LTC-DRG 
classifications and relative weights at Sec.  412.517(b) (in 
conjunction with Sec.  412.503), such that estimated aggregate LTCH PPS 
payments would be unaffected, that is, would be neither greater than 
nor less than the estimated aggregate LTCH PPS payments that would have 
been made without the classification and relative weight changes. (See 
the May 11, 2007 LTCH PPS final rule (72 FR 26882 through 26884).)
    Consistent with Sec.  412.517(b), in the FY 2009 IPPS final rule 
(August 19, 2008, (73 FR 48550 through 48551)), using the most recent 
data available at that time (FY 2007 LTCH claims data from the March 
2008 update of the MedPAR files), we established the MS-LTC-DRG 
classifications and relative weights for FY 2009 based on the 
application of budget neutrality adjustment factors determined using 
the two-step methodology of calculating and applying a normalization 
factor and a budget neutrality factor, as initially established in the 
FY 2008 IPPS final rule (August 22, 2007, (72 FR 47295 through 47296)). 
Specifically, for FY 2009, under the first step of the established two-
step budget neutrality methodology, after recalibrating the MS-LTC-DRG 
relative weights, we calculated and applied a normalization factor of 
1.03887 to those relative weights to ensure that the average case-mix 
index (CMI) is not influenced by changes in the composition of case 
types or the changes to the classification system, such that the 
recalibration process itself neither increases nor decreases the 
average CMI. In doing so, each (recalibrated) MS-LTC-DRG relative 
weight was multiplied by 1.03887 to produce ``normalized relative 
weights''.
    Under the second step of the established two-step budget neutrality 
methodology, we calculated and applied a ``budget neutrality adjustment 
factor'' to ensure that estimated aggregate LTCH PPS payments after 
reclassification and recalibration would be equal to estimated 
aggregate LTCH PPS payments before reclassification and recalibration. 
Specifically, as described in the FY 2009 IPPS final rule (73 FR 
48551), we calculated a budget neutrality factor of 1.04186 by 
comparing estimated total payments using the normalized FY 2009 
relative weights under GROUPER Version 26.0 to estimated total payments 
using the FY 2008 GROUPER (Version 25.0) and FY 2008 MS-LTC-DRG 
relative weights. Then, each of the normalized relative weights was 
multiplied by that budget neutrality factor to determine the budget 
neutral relative weight for each MS-LTC-DRG for FY 2009. Thus, the FY 
2009 MS-LTC-DRG relative weights established in Table 11 of the 
Addendum of the FY 2009 IPPS final rule reflect the application of both 
the normalization factor of 1.03887 and the budget neutrality factor of 
1.04186.
    We have discovered that, in determining the published FY 2009 MS-
LTC-DRG relative weights, we did not properly apply the established 
methodology for calculating the budget neutrality factor (the second 
step of the budget neutrality methodology, as set forth in the FY 2009 
IPPS final rule (73 FR 48550 through 48551). Specifically, upon recent 
review of the calculation of the budget neutrality factor of 1.04186, 
we found that it was determined using the unadjusted recalibrated 
relative weights rather than using the normalized relative weights. 
This is inconsistent with our stated methodology for the calculation of 
the FY 2009 budget neutrality factor (that is, the second step of the 
budget neutrality methodology). As described above and as we stated in 
the FY 2009 IPPS final rule (73 FR 48551), the FY 2009 budget

[[Page 26548]]

neutrality factor is to be determined based on estimated total payments 
using the normalized (recalibrated) relative weights under GROUPER 
Version 26.0 (not the unadjusted recalibrated relative weights as were 
used in calculating the budget neutrality factor of 1.04186 published 
in the FY 2009 IPPS final rule). This misapplication of the rule's 
established methodology for calculating the budget neutrality factors 
resulted in relative weights that are higher, by approximately 3.9 
percent. We estimate aggregate annualized LTCH PPS payments in FY 2009 
(that is, for discharges occurring on or after October 1, 2008 through 
September 30, 2009) based on the MS-LTC-DRG relative weights published 
in the FY 2009 IPPS final rule to be approximately $130 million greater 
than what the increase would have been had the FY 2009 budget 
neutrality factor been calculated consistent with the established 
methodology described in that final rule. Thus, the FY 2009 MS-LTC-DRG 
relative weights shown in Table 11 of the FY 2009 IPPS final rule (73 
FR 49041 through 49062) are inconsistent with the established budget 
neutrality methodology used for the annual update to the MS-LTC-DRG 
classifications and relative weights.
    Consistent with our general and longstanding policy in PPS 
contexts, we do not make retroactive changes to correct past errors in 
PPS rate-setting, regardless of whether an error resulted in higher 
payments to providers (as in this situation) or lower payments to 
providers; we also do not make prospective adjustments to PPS rates to 
account for errors that occurred in prior periods, regardless of 
whether an error resulted in higher payments or lower payments to 
providers. In this instance, we are, revising the FY 2009 MS-LTC-DRG 
relative weights to ensure proper application of the established budget 
neutrality methodology in updating the FY 2008 MS-LTC-DRG relative 
weights to FY 2009 during the fiscal year that will be effective for 
the remainder of the fiscal year. We note that this prospective 
revision to the FY 2009 MS-LTC-DRG relative weights does not reflect a 
change in the established budget neutrality methodology itself, but 
rather, reflects the proper calculation of the relative weights under 
the rule's stated methodology.
    In this interim final rule with comment period, we have calculated 
revised FY 2009 MS-LTC-DRG relative weights (effective prospectively 
for the remainder of FY 2009) based on the proper application of the 
established budget neutrality methodology. Specifically, using the same 
data (FY 2007 LTCH claims data from the March 2008 update of the MedPAR 
files) and methodology presented in the FY 2009 IPPS final rule (73 FR 
48551) described above, we have determined a budget neutrality factor 
of 1.0030401, which was applied to the normalized relative weights 
(that is, the recalibrated relative weights adjusted by the 
normalization factor of 1.03887, as described above). As a result, we 
are establishing revised FY 2009 MS-LTC-DRG relative weights (shown in 
Table 11 of this interim final rule with comment period) that are 
effective for LTCH PPS discharges occurring on or after June 3, 2009 
through September 30, 2009. The revised FY 2009 MS-LTC-DRG relative 
weights in Table 11 of this interim final rule with comment period 
reflect the application of the revised FY 2009 budget neutrality factor 
1.0030401 and the FY 2009 normalization factor of 1.03887 (established 
in the FY 2009 IPPS final rule (73 FR 48551)). (For the convenience of 
the reader, in addition to the revised budget neutral FY 2009 MS-LTC-
DRG relative weights effective June 3, 2009 through September 30, 2009, 
Table 11 also includes the geometric mean length of stay and five-
sixths of the geometric mean length of stay (Short-Stay Outlier (SSO) 
Threshold for payments under Sec.  412.529) for each MS-LTC-DRG for FY 
2009. The revision to the FY 2009 budget neutrality factor did not 
affect the calculation of the geometric mean length of stay and the SSO 
threshold for FY 2009 that were presented in Table 11 of the FY 2009 
IPPS final rule.)

B. Effect on the Proposed RY 2010 MS-LTC-DRG Relative Weights and 
Fixed-Loss Amount

    As discussed above in section II.A. of this interim final rule with 
comment period, we are revising the published FY 2009 MS-LTC-DRG 
relative weights (73 FR 49041 through 49062), based on the appropriate 
application of the FY 2009 budget neutrality factor, consistent with 
the description of our established methodology. Because the proposed RY 
2010 MS-LTC-DRG relative weights published in the FY 2010 IPPS and RY 
2010 LTCH PPS proposed rule on May 22, 2009 (74 FR 24589 through 24608) 
were determined based on the published FY 2009 MS-LTC-DRG relative 
weights, the revisions to the published FY 2009 MS-LTC-DRG relative 
weights discussed in section II.A. of this interim final rule with 
comment period affect the determination of the proposed RY 2010 MS-LTC-
DRG relative weights. Therefore, we are also presenting proposed RY 
2010 MS-LTC-DRG relative weights in a supplemental proposed rule 
published elsewhere in this Federal Register. The proposed RY 2010 MS-
LTC-DRG relative weights were determined consistent with the proposed 
two-step budget neutrality methodology discussed in the FY 2010 IPPS 
and RY 2010 LTCH PPS proposed rule (74 FR 24226 through 24227).
    We also note that the proposed RY 2010 HCO fixed-loss amount 
presented in the FY 2010 IPPS and RY 2010 LTCH PPS proposed rule (74 FR 
24268) was determined based on the proposed RY 2010 MS-LTC-DRG relative 
weights presented in Table 11 of that proposed rule. Thus, the 
supplemental proposed rule published elsewhere in this Federal Register 
also determines a proposed RY 2010 HCO fixed-loss amount based on the 
proposed RY 2010 MS-LTC-DRG relative weights presented in that same 
supplemental proposed rule.

III. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

IV. Waiver of Proposed Rulemaking, Delay of Effective Date, and 60-Day 
Comment Period

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register to provide a period for public comment before 
provisions of a rule such as this take effect. We also ordinarily 
provide a 30-day delay in effective date of a rule in accordance with 
section 553(d) of the Administrative Procedure Act (APA) (5 U.S.C. 
553(d)), and section 1871 of the Act. However, we can waive both the 
prior notice-and-comment procedure or the delay in effective date, if 
the Secretary for good cause finds that it is impracticable, 
unnecessary, or contrary to the public interest and incorporates a 
statement of the finding and its reasons in the notice issued.
    We believe it is unnecessary to undertake prior notice and comment 
rulemaking or provide a delay in effective date because this interim 
final rule with comment period simply reflects the appropriate 
application of the established methodology set forth in the FY 2009 
IPPS final rule (73 FR 48550 through 48551). The LTCH statute provides 
for annual updates to the LTCH PPS MS-LTC-DRG relative

[[Page 26549]]

weights, and the methodologies used to update the MS-LTC-DRG relative 
weights have been previously subject to public comment, and therefore, 
additional comment would be unnecessary.
    Moreover, we believe that it is impracticable to undertake prior 
notice and comment rulemaking or provide a delay in effective date 
because this interim final rule with comment period is making a 
prospective revision to the FY 2009 MS-LTC-DRG relative weights to 
reflect proper application of the applicable established methodology, 
and therefore should be applied in as timely a manner as possible. For 
the reasons set forth above, we find good cause to waive notice-and-
comment procedures, as well as the 30-day delay in effective date.
    In addition, we ordinarily publish an interim final rule with 
comment period in the Federal Register and permit a 60-day comment 
period, as provided in section 1871(b)(1) of the Act. This period, 
however, may be shortened, as provided under section 1871(b)(2)(C), 
when the agency finds good cause that a 60-day comment period would be 
impracticable, unnecessary, or contrary to the public interest and 
incorporates a statement of the finding and its reasons in the rule 
issued. For the reasons set forth above, and because we plan to 
finalize the provisions of this interim final rule with comment period 
at the same time that the FY 2010 IPPS and RY 2010 LTCH PPS proposed 
rule is finalized, we are waiving the 60-day comment period for good 
cause and allowing a 30-day comment period instead.

V. 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. Chapter 35).

VI. Regulatory Impact Analysis

    We have examined the impacts of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), the 
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), 
section 1102(b) of the Social Security Act, the Unfunded Mandates 
Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on 
Federalism, and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any one year).
    The revision to the FY 2009 MS-LTC-DRG relative weights presented 
in section II.A. of this interim final rule with comment period will 
affect LTCH PPS payments for discharges occurring for approximately the 
last 4 months of FY 2009. Specifically, we estimate that the impact of 
the revision to the FY 2009 MS-LTC-DRG relative weights effective from 
June 3, 2009 through September 30, 2009 would result in an aggregate 
decrease in FY 2009 LTCH PPS payments of approximately $43 million (or 
approximately 0.9 percent of estimated FY 2009 LTCH PPS payments). 
Because the distributional effects and estimated changes to the 
Medicare program payments would not be greater than $100 million, this 
interim final rule with comment period would not be considered a major 
economic rule, as defined in this section.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small government 
jurisdictions. Most hospitals and most other providers and suppliers 
are considered to be small entities, either by being nonprofit 
organizations or by meeting the Small Business Administration 
definition of a small business (having revenues of $34.5 million or 
less in any 1 year). (For details on the latest standards for heath 
care providers, we refer readers to the Table of Small Business Size 
Standards for NAIC 622 found on the Small Business Administration 
Office of Size Standards Web site at: https://www.sba.gov/contractingopportunities/officials/size/GC-SMALL-BUS-SIZE-STANDARDS.html.) For purposes of the RFA, all hospitals and other 
providers and suppliers are considered to be small entities. 
Individuals and States are not included in the definition of a small 
entity. Because we lack data on individual hospital receipts, we cannot 
determine the number of small proprietary LTCHs. Therefore, we are 
assuming that all LTCHs are considered small entities for the purpose 
of the analysis in this section. Because we acknowledge that many of 
the affected entities are small entities, the analysis discussed in 
this section constitutes our regulatory flexibility analysis. 
Therefore, we are soliciting public comments on our estimates and 
analysis of the impact of the provisions of this interim final rule 
with comment period on those small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area for Medicare payment regulations and has fewer than 
100 beds. In our database of 399 LTCHs, we have identified 26 small 
rural hospitals that account for less than 5 percent of all LTCH cases. 
As stated above, the provisions of this interim final rule with comment 
period will result in a decrease in estimated aggregate LTCH PPS 
payments in FY 2009 of approximately $43 million (or approximately 0.9 
percent) for all LTCHs. Similarly, for the 26 rural LTCHs for which 
data is available, we estimate that the provisions of this interim 
final rule with comment period will result in a decrease in estimated 
aggregate LTCH PPS payments to rural LTCHs in FY 2009 of approximately 
0.9 percent (or about $1.6 million). Therefore, we believe this rule 
will not have a significant impact on small rural hospitals. 
Accordingly, the Secretary certifies that this interim final rule with 
comment period would not have a significant economic impact on the 
operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2009, that 
threshold level is currently approximately $133 million. This interim 
final rule with comment period would not mandate any requirements for 
State, local, or tribal governments, nor would it result in 
expenditures by the private sector of $133 million or more in any one 
year.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. Since this regulation does not impose

[[Page 26550]]

any costs on State or local governments, the requirements of Executive 
Order 13132 are not applicable.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: May 21, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.

    Approved: May 27, 2009.
Kathleen Sebelius,
Secretary.
    [Editorial Note: The following table will not appear in the Code 
of Federal Regulations.]
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR03JN09.000


[[Page 26551]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.001


[[Page 26552]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.002


[[Page 26553]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.003


[[Page 26554]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.004


[[Page 26555]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.005


[[Page 26556]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.006


[[Page 26557]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.007


[[Page 26558]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.008


[[Page 26559]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.009


[[Page 26560]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.010


[[Page 26561]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.011


[[Page 26562]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.012


[[Page 26563]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.013


[[Page 26564]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.014


[[Page 26565]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.015


[[Page 26566]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.016


[[Page 26567]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.017


[[Page 26568]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.018


[[Page 26569]]


[GRAPHIC] [TIFF OMITTED] TR03JN09.019

[FR Doc. E9-12911 Filed 5-29-09; 4:15 pm]
BILLING CODE 4120-01-C

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.