Medicare Program; Inpatient Psychiatric Facilities Prospective Payment System-Update for Fiscal Year Beginning October 1, 2015 (FY 2016), 25011-25065 [2015-09880]
Download as PDF
<![CDATA[
Vol. 80
Friday,
No. 84
May 1, 2015
Part II
Department of Health and Human Services
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Centers for Medicare & Medicaid Services
42 CFR Parts 412
Medicare Program; Inpatient Psychiatric Facilities Prospective Payment
System—Update for Fiscal Year Beginning October 1, 2015 (FY 2016);
Proposed Rule
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00001
Fmt 4717
Sfmt 4717
E:\FR\FM\01MYP2.SGM
01MYP2
25012
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 412
[CMS–1627–P]
RIN 0938–AS47
Medicare Program; Inpatient
Psychiatric Facilities Prospective
Payment System—Update for Fiscal
Year Beginning October 1, 2015 (FY
2016)
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
update the prospective payment rates
for Medicare inpatient hospital services
provided by inpatient psychiatric
facilities (IPFs) (which are freestanding
IPFs and psychiatric units of an acute
care hospital or critical access hospital).
These changes would be applicable to
IPF discharges occurring during the
fiscal year (FY) beginning October 1,
2015 through September 30, 2016 (FY
2016). This proposed rule also proposes:
A new IPF-specific market basket; to
update the IPF labor-related share; a
transition to new Core Based Statistical
Area (CBSA) designations in the FY
2016 IPF Prospective Payment System
(PPS) wage index; to phase out the rural
adjustment for IPF providers whose
status changes from rural to urban as a
result of the proposed wage index CBSA
changes; and new quality measures and
reporting requirements under the IPF
quality reporting program. This
proposed rule also reminds IPFs of the
October 1, 2015 implementation of the
International Classification of Diseases,
10th Revision, Clinical Modification
(ICD–10–CM), and updates providers on
the status of IPF PPS refinements.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on June 23, 2015.
ADDRESSES: In commenting, please refer
to file code CMS–1627–P. 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 ‘‘Submit a comment’’ instructions.
2. By regular mail. You may mail
written comments to the following
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
SUMMARY:
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–1627–P, P.O. Box 8010, Baltimore,
MD 21244–1850.
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–1627–P, Mail
Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
4. By hand or courier. Alternatively,
you may deliver (by hand or courier)
your written comments ONLY to the
following addresses prior to the close of
the comment period:
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, call
telephone number (410) 786–4492 in
advance to schedule your arrival with
one of our staff members.
Comments erroneously mailed to the
addresses indicated as appropriate for
hand or courier delivery may be delayed
and received after the comment period.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Katherine Lucas or Jana Lindquist,
(410) 786–7723, for general information.
Hudson Osgood, (410) 786–7897 or
Bridget Dickensheets, (410) 786–8670,
for information regarding the market
basket and labor-related share.
Theresa Bean, (410) 786–2287, for
information regarding the regulatory
impact analysis.
Rebecca Kliman, (410) 786–9723, or
Jeffrey Buck, (410) 786–0407, for
information regarding the inpatient
PO 00000
Frm 00002
Fmt 4701
Sfmt 4702
psychiatric facility quality reporting
program.
SUPPLEMENTARY INFORMATION:
Availability of Certain Tables
Exclusively Through the Internet on the
CMS Web Site
In the past, tables setting forth the
Wage Index for Urban Areas Based on
CBSA Labor Market Areas and the Wage
Index Based on CBSA Labor Market
Areas for Rural Areas were published in
the Federal Register as an Addendum to
the annual PPS rulemaking (that is, the
PPS proposed and final rules or, when
applicable, the current update notice).
However, beginning in FY 2015, these
wage index tables are no longer
published in the Federal Register.
Instead, these tables will be available
exclusively through the Internet. The
wage index tables for this proposed rule
are available exclusively through the
Internet on the CMS Web site at https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/IPFPPS/Wage
Index.html.
To assist readers in referencing
sections contained in this document, we
are providing the following table of
contents.
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Impacts
II. Background
A. Overview of the Legislative
Requirements of the IPF PPS
B. Overview of the IPF PPS
C. Annual Requirements for Updating the
IPF PPS
III. Provisions of the Proposed Rule
A. Proposed Market Basket for the IPF PPS
1. Background
2. Overview of the Proposed 2012-Based
IPF Market Basket
3. Creating an IPF-Specific Market Basket
a. Development of Cost Categories and
Weights
i. Medicare Cost Reports
ii. Final Major Cost Category Computation
iii. Derivation of the Detailed Operating
Cost Weights
iv. Derivation of the Detailed Capital Cost
Weights
v. Proposed 2012-Based IPF Market Basket
Cost Categories and Weights
b. Selection of Price Proxies
i. Price Proxies for the Operating Portion of
the Proposed 2012-Based IPF Market
Basket
ii. Price Proxies for the Capital Portion of
the Proposed 2012-Based IPF Market
Basket
iii. Summary of All Price Proxies of the
Proposed 2012-Based IPF Market Basket
4. Proposed FY 2016 Market Basket Update
5. Proposed Productivity Adjustment
6. Proposed Labor-Related Share
B. Proposed Updates to the IPF PPS Rates
for FY Beginning October 1, 2016
1. Determining the Standardized BudgetNeutral Federal Per Diem Base Rate
E:\FR\FM\01MYP2.SGM
01MYP2
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
2. Proposed Update of the Federal Per
Diem Base Rate and Electroconvulsive
Therapy Rate
C. Proposed Updates to the IPF PPS
Patient-Level Adjustment Factors
1. Overview of the IPF PPS Adjustment
Factors
2. IPF–PPS Patient-Level Adjustments
a. MS–DRG Assignment
b. Payment for Comorbid Conditions
3. Patient Age Adjustments
4. Variable Per Diem Adjustments
D. Proposed Updates to the IPF PPS
Facility-Level Adjustments
1. Proposed Wage Index Adjustment
a. Background
b. Proposed Wage Index for FY 2016
c. OMB Bulletins and Proposed
Transitional Wage Index
d. Adjustment for Rural Location and
Proposal To Phase Out the Rural
Adjustment for IPFs Losing Their Rural
Adjustment Due to CBSA Changes
e. Budget Neutrality Adjustment
2. Teaching Adjustment
3. Cost of Living Adjustment for IPFs
Located in Alaska and Hawaii
4. Adjustment for IPFs With a Qualifying
Emergency Department (ED)
E. Other Payment Adjustments and
Policies
1. Outlier Payment Overview
2. Proposed Update to the Outlier Fixed
Dollar Loss Threshold Amount
3. Proposed Update to IPF Cost-to-Charge
Ratio Ceilings
IV. Updates on Other Payment Policy Issues
A. Implementation of ICD–10–CM and
ICD–10–PCS
B. Update on IPF PPS Refinements
V. Inpatient Psychiatric Facilities Quality
Reporting (IPFQR) Program
A. Background
1. Statutory Authority
2. Covered Entities
3. Considerations in Selecting Quality
Measures
B. Retention of IPFQR Program Measures
Adopted in Previous Payment
Determinations
C. Proposed Removal of Quality Measure
From the IPFQR Program Measure Set
D. New Quality Measures Proposed for the
FY 2018 Payment Determination and
Subsequent Years
1. TOB–3 Tobacco Use Treatment Provided
or Offered at Discharge and the Subset
Measure TOB–3a Tobacco Use Treatment
at Discharge
2. SUB–2 Alcohol Use Brief Intervention
Provided or Offered and SUB–2a Alcohol
Use Brief Intervention
3. Transition Record With Specified
Elements Received by Discharged
Patients (Discharges From an Inpatient
Facility to Home/Self Care or Any Other
Site of Care)
4. Timely Transmission of Transition
Record (Discharges From an Inpatient
Facility to Home/Self Care or Any Other
Site of Care)
5. Screening for Metabolic Disorders
6. Summary of Measures Proposed for
Adoption and Removal for FY 2018 and
Subsequent Years
E. Possible IPFQR Program Measures and
Topics for Future Consideration
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
F. Changes to Reporting Requirements
1. Proposed Changes to Reporting by Age
and Quarter
2. Proposed Changes to Aggregate
Population Count Reporting
3. Proposed Changes to Sampling
Requirements for FY 2018 Payment
Determination and Subsequent Years
G. Public Display and Review
Requirements
H. Form, Manner, and Timing of Quality
Data Submission
1. Procedural and Submission
Requirements
2. Proposed Change to the Reporting
Periods and Submission Timeframes
3. Population, Sampling, and Minimum
Case Threshold
4. Data Accuracy and Completeness
Acknowledgement (DACA)
Requirements
I. Reconsideration and Appeals Procedures
J. Exceptions to Quality Reporting
Requirements
VI. Collection of Information Requirements
A. Wage Estimates
B. ICRs Regarding the Inpatient Psychiatric
Quality Reporting (IPFQR) Program
1. Changes in Time Required to ChartAbstract Data Based on Proposed
Reporting Requirements
2. Estimated Burden of IPFQR Program
Proposals
C. Summary of Annual Burden Estimates
for Proposed Requirements
D. ICRs Regarding the Hospital and Health
Care Complex Cost Report
E. Submission of PRA-Related Comments
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Anticipated Effects
1. Budgetary Impact
2. Impact on Providers
3. Results
4. Effects of Updates to the IPFQR Program
5. Effect on Beneficiaries
D. Alternatives Considered
E. Accounting Statement
Regulations Text
Addendum—FY 2016 Proposed Rates and
Adjustment Factors
Acronyms
Because of the many terms to which
we refer by acronym in this proposed
rule, we are listing the acronyms used
and their corresponding meanings in
alphabetical order below:
ADC Average Daily Census
AHA American Hospital Association
AHE Average Hourly Earning
BBRA Medicare, Medicaid and SCHIP
[State Children’s Health Insurance
Program] Balanced Budget Refinement Act
of 1999 (Pub. L. 106–113)
BEA Bureau of Economic Analysis
BLS Bureau of Labor Statistics
CAH Critical Access Hospital
CBSA Core-Based Statistical Area
CCR Cost-to-Charge Ratio
CPI Consumer Price Index
CPI–U Consumer Price Index for all Urban
Consumers
DRGs Diagnosis-Related Groups
PO 00000
Frm 00003
Fmt 4701
Sfmt 4702
25013
ECI Employment Cost Index
ESRD End State Renal Disease
FR Federal Register
FTE Full-time equivalent
FY Federal Fiscal Year (October 1 through
September 30)
GDP Gross Domestic Product
GME Graduate Medical Education
HHA Home Health Agency
HBIPS Hospital Based Inpatient Psychiatric
Services
ICD–9–CM International Classification of
Diseases, 9th Revision, Clinical
Modification
ICD–10–CM International Classification of
Diseases, 10th Revision, Clinical
Modification
ICD–10–PCS International Classification of
Diseases, 10th Revision, Procedure Coding
System
IGI IHS Global Insight, Inc.
I–O Input—Output
IPFs Inpatient Psychiatric Facilities
IPFQR Inpatient Psychiatric Facilities
Quality Reporting
IRFs Inpatient Rehabilitation Facilities
LOS Length of Stay
LTCHs Long-Term Care Hospitals
MAC Medicare Administrative Contractor
MedPAR Medicare Provider Analysis and
Review File
MFP Multifactor Productivity
MMA Medicare Prescription Drug,
Improvement, and Modernization Act of
2003
MSA Metropolitan Statistical Area
NAICS North American Industry
Classification System
NQF National Quality Forum
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient Prospective Payment
System
PLI Professional Liability Insurance
PPI Producer Price Index
PPS Prospective Payment System
RPL Rehabilitation, Psychiatric, and LongTerm Care
RY Rate Year (July 1 through June 30)
SCHIP State Children’s Health Insurance
Program
SNF Skilled Nursing Facility
SOC Standard Occupational Classification
TEFRA Tax Equity and Fiscal Responsibility
Act of 1982 (Pub. L. 97–248)
I. Executive Summary
A. Purpose
This proposed rule would update the
prospective payment rates for Medicare
inpatient hospital services provided by
inpatient psychiatric facilities (IPFs) for
discharges occurring during the fiscal
year (FY) beginning October 1, 2015
through September 30, 2016. For the
Inpatient Psychiatric Facility Quality
Reporting (IPFQR) Program, it also
would change the measures collected
under the program and modify reporting
requirements for all program measures.
B. Summary of the Major Provisions
In this proposed rule, we would
update the IPF Prospective Payment
E:\FR\FM\01MYP2.SGM
01MYP2
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
25014
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
System (PPS), as specified in 42 CFR
412.428. The updates include the
following:
• Effective for FY 2016 IPF PPS
update, we are proposing to adopt a FY
2012-based IPF-specific market basket.
We propose to adjust the FY 2012-based
IPF market basket update (currently
estimated to be 2.7 percent) by a
reduction for economy-wide
productivity (currently estimated to be
0.6 percentage point) as required by
section 1886(s)(2)(A)(i) of the Social
Security Act (the Act), and further
reduced by 0.2 percentage point as
required by section 1886(s)(2)(A)(ii) of
the Act, resulting in an estimated
market basket update of 1.9 percent.
• We propose to update the IPF per
diem rate from $728.31 to $745.19.
Providers that failed to report quality
data for FY 2016 payment would receive
a proposed FY 2016 per diem rate of
$730.56.
• We propose to update the
electroconvulsive therapy (ECT)
payment from $313.55 to $320.82.
Providers that failed to report quality
data for FY 2016 payment would receive
a proposed FY 2016 ECT rate of
$314.52.
• We propose to adopt new Office of
Management and Budget (OMB) CoreBased Statistical Area (CBSA)
delineations for the FY 2016 IPF PPS
wage index and future IPF PPS wage
indices. We propose to implement these
CBSA changes using a 1-year transition
with a blended wage index for all
providers, consisting of a blend of fifty
percent of the FY 2016 IPF wage index
using the current OMB delineations and
fifty percent of the FY 2016 IPF wage
index using the revised OMB
delineations.
• We propose to phase out the rural
adjustment for the 37 rural IPFs that
would be re-designated as urban IPFs
due to the OMB CBSA changes.
Specifically, we propose to phase out
the 17 percent rural adjustment for these
37 providers over 3 years (2-thirds of the
adjustment given in FY 2016, one-third
of the adjustment given in FY 2017, and
no rural adjustment thereafter).
• We propose to use the updated
Labor Related Share of 74.9 percent and
CBSA rural and urban wage indices for
FY 2016, and establish a wage index
budget-neutrality adjustment of 1.0041.
• We propose to update the fixed
dollar loss threshold amount from
$8,755 to $9,825 in order to maintain
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
outlier payments that are 2 percent of
total IPF PPS payments.
• We propose that the national urban
and rural cost-to-charge ratio (CCR)
ceilings for FY 2016 would be 1.6881
and 1.9041, respectively, and the
national median CCR would be 0.4675
for urban IPFs and 0.6210 for rural IPFs.
The national median CCR is applied to
new IPFs that have not yet submitted
their first Medicare cost report, to IPFs
for which the CCR calculation data are
inaccurate or incomplete, or to IPFs
whose overall CCR exceeds 3 standard
deviations above the national geometric
mean. These amounts are used in the
outlier calculation to determine if an
IPF’s CCR is statistically accurate and
for new providers without an
established CCR.
• We note that IPF PPS patient-level
and facility-level adjustments, other
than those mentioned above, would
remain the same as in FY 2015.
In addition:
• We remind providers that
International Classification of Diseases,
10th Revision, Clinical Modification/
Procedure Coding System (ICD–10–CM/
PCS) will be implemented on October 1,
2015.
• As we continue our analysis for
future IPF PPS refinements, we find,
from preliminary analysis of 2012 to
2013 data, that over 20 percent of IPF
stays reported no ancillary costs, such
as laboratory and drug costs, in their
cost reports, or laboratory or drug
charges on their claims. Because we
expect that most patients requiring
hospitalization for active psychiatric
treatment would need drugs and
laboratory services, we remind
providers that the IPF per diem payment
rate includes the cost of all ancillary
services, including drugs and laboratory
services. CMS pays only the inpatient
psychiatric facility for services
furnished to a Medicare beneficiary who
is an inpatient of that inpatient
psychiatric facility, except for certain
professional services, and payments are
considered to be payments in full for all
inpatient hospital services provided
directly or under arrangement (see 42
CFR 412.404(d)), as specified in 42 CFR
409.10.
For the Inpatient Psychiatric Facility
Quality Reporting (IPFQR) Program, we
are making several proposals related to
measures and several proposals related
to data submission for the IPFQR
Program measures. We are proposing to
PO 00000
Frm 00004
Fmt 4701
Sfmt 4702
adopt five new measures beginning with
the fiscal year (FY) 2018 payment
determination:
• TOB–3—Tobacco Use Treatment
Provided or Offered at Discharge and
the subset measure TOB–3a Tobacco
Use Treatment at Discharge (National
Quality Forum (NQF) #1656);
• SUB–2—Alcohol Use Brief
Intervention Provided or Offered and
the subset measure SUB–2a (NQF
#1663);
• Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF) #0647);
• Timely Transmission of Transition
Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0648); and
• Screening for Metabolic Disorders.
If Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) is adopted, we are
proposing to remove Hospital Based
Inpatient Psychiatric Services (HBIPS)–
6 Post-Discharge Continuing Care Plan
(NQF #0557). Likewise, if Timely
Transmission of Transition Record
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) (NQF #0648) is adopted, we are
proposing to remove HBIPS–7 PostDischarge Continuing Care Plan
Transmitted to the Next Level of Care
Provider Upon Discharge (NQF #0558).
We are also proposing to remove one
measure, HBIPS–4 Patients Discharged
on Multiple Antipsychotic Medications,
beginning with the FY 2017 payment
determination.
We are also making several proposals
regarding how facilities should report
data for IPFQR Program measures:
• We are proposing to require that
measures be reported as a single yearly
count rather than by quarter and age
beginning with the FY 2017 payment
determination;
• We are proposing to require that
aggregate population counts be reported
as a single yearly number rather than by
quarter beginning with the FY 2017
payment determination; and
• We are proposing to allow uniform
sampling for certain measures beginning
with the FY 2018 payment
determination.
C. Summary of Impacts
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
25015
Provision description
Total transfers
FY 2016 IPF PPS payment rate update ..................................................
The overall economic impact of this proposed rule is an estimated $80
million in increased payments to IPFs during FY 2016.
Provision description
Costs
New quality reporting program requirements ...........................................
The total costs beginning in FY 2016 for IPFs as a result of the proposed new quality reporting requirements are estimated to be $6.31
million.
II. Background
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
A. Overview of the Legislative
Requirements for the IPF PPS
Section 124 of the Medicare,
Medicaid, and SCHIP (State Children’s
Health Insurance Program) Balanced
Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106–113) required the
establishment and implementation of an
IPF PPS. Specifically, section 124 of the
BBRA mandated that the Secretary of
the Department Health and Human
Services (the Secretary) develop a per
diem PPS for inpatient hospital services
furnished in psychiatric hospitals and
psychiatric units including an adequate
patient classification system that reflects
the differences in patient resource use
and costs among psychiatric hospitals
and psychiatric units.
Section 405(g)(2) of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub.
L. 108–173) extended the IPF PPS to
distinct part psychiatric units of critical
access hospitals (CAHs).
Section 3401(f) of the Patient
Protection and Affordable Care Act
(Pub. L. 111–148) as amended by
section 10319(e) of that Act and by
section 1105(d) of the Health Care and
Education Reconciliation Act of 2010
(Pub. L. 111–152) (hereafter referred to
as ‘‘the Affordable Care Act’’) added
subsection (s) to section 1886 of the Act.
Section 1886(s)(1) of the Act titled
‘‘Reference to Establishment and
Implementation of System’’ refers to
section 124 of the BBRA, which relates
to the establishment of the IPF PPS.
Section 1886(s)(2)(A)(i) of the Act
requires the application of the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act to
the IPF PPS for the Rate Year (RY)
beginning in 2012 (that is, a RY that
coincides with a FY) and each
subsequent RY. For the RY beginning in
2015 (that is, FY 2016), the current
estimate of the productivity adjustment
would be equal to 0.6 percentage point,
which we are proposing in this FY 2016
proposed rule.
Section 1886(s)(2)(A)(ii) of the Act
requires the application of an ‘‘other
adjustment’’ that reduces any update to
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
an IPF PPS base rate by percentages
specified in section 1886(s)(3) of the Act
for the RY beginning in 2010 through
the RY beginning in 2019. For the RY
beginning in 2015 (that is, FY 2016),
section 1886(s)(3)(D) of the Act requires
the reduction to be 0.2 percentage point.
We are proposing that reduction in this
FY 2016 IPF PPS proposed rule.
Section 1886(s)(4) of the Act requires
the establishment of a quality data
reporting program for the IPF PPS
beginning in RY 2014.
To implement and periodically
update these provisions, we have
published various proposed and final
rules in the Federal Register. For more
information regarding these rules, see
the CMS Web site at https://www.cms.
hhs.gov/InpatientPsychFacilPPS/.
B. Overview of the IPF PPS
The November 2004 IPF PPS final
rule (69 FR 66922) established the IPF
PPS, as required by section 124 of the
BBRA and codified at subpart N of part
412 of the Medicare regulations. The
November 2004 IPF PPS final rule set
forth the per diem Federal rates for the
implementation year (the 18-month
period from January 1, 2005 through
June 30, 2006), and provided payment
for the inpatient operating and capital
costs to IPFs for covered psychiatric
services they furnish (that is, routine,
ancillary, and capital costs, but not costs
of approved educational activities, bad
debts, and other services or items that
are outside the scope of the IPF PPS).
Covered psychiatric services include
services for which benefits are provided
under the fee-for-service Part A
(Hospital Insurance Program) of the
Medicare program.
The IPF PPS established the Federal
per diem base rate for each patient day
in an IPF derived from the national
average daily routine operating,
ancillary, and capital costs in IPFs in FY
2002. The average per diem cost was
updated to the midpoint of the first year
under the IPF PPS, standardized to
account for the overall positive effects of
the IPF PPS payment adjustments, and
adjusted for budget-neutrality.
The Federal per diem payment under
the IPF PPS is comprised of the Federal
PO 00000
Frm 00005
Fmt 4701
Sfmt 4702
per diem base rate described above and
certain patient- and facility-level
payment adjustments that were found in
the regression analysis to be associated
with statistically significant per diem
cost differences.
The patient-level adjustments include
age, Diagnosis-Related Group (DRG)
assignment, comorbidities, and variable
per diem adjustments to reflect higher
per diem costs in the early days of an
IPF stay. Facility-level adjustments
include adjustments for the IPF’s wage
index, rural location, teaching status, a
cost-of-living adjustment for IPFs
located in Alaska and Hawaii, and the
presence of a qualifying emergency
department (ED).
The IPF PPS provides additional
payment policies for: Outlier cases;
interrupted stays; and a per treatment
adjustment for patients who undergo
electroconvulsive therapy (ECT). During
the IPF PPS mandatory 3-year transition
period, stop-loss payments were also
provided; however, since the transition
ended in 2008, these payments are no
longer available.
A complete discussion of the
regression analysis that established the
IPF PPS adjustment factors appears in
the November 2004 IPF PPS final rule
(69 FR 66933 through 66936).
Section 124 of the BBRA did not
specify an annual rate update strategy
for the IPF PPS and was broadly written
to give the Secretary discretion in
establishing an update methodology.
Therefore, in the November 2004 IPF
PPS final rule, we implemented the IPF
PPS using the following update strategy:
• Calculate the final Federal per diem
base rate to be budget-neutral for the 18month period of January 1, 2005
through June 30, 2006.
• Use a July 1 through June 30 annual
update cycle.
• Allow the IPF PPS first update to be
effective for discharges on or after July
1, 2006 through June 30, 2007.
In RY 2012, we proposed and
finalized switching the IPF PPS
payment rate update from a rate year
that begins on July 1 and ends on June
30 to one that coincides with the
Federal fiscal year that begins October 1
and ends on September 30. In order to
E:\FR\FM\01MYP2.SGM
01MYP2
25016
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
transition from one timeframe to
another, the RY 2012 IPF PPS covered
a 15-month period from July 1, 2011
through September 30, 2012. Therefore,
the update cycle for FY 2016 will be
October 1, 2015 through September 30,
2016. For further discussion of the 15month market basket update for RY
2012 and changing the payment rate
update period to coincide with a FY
period, we refer readers to the RY 2012
IPF PPS proposed rule (76 FR 4998) and
the RY 2012 IPF PPS final rule (76 FR
26432).
C. Annual Requirements for Updating
the IPF PPS
In November 2004, we implemented
the IPF PPS in a final rule that appeared
in the November 15, 2004 Federal
Register (69 FR 66922). In developing
the IPF PPS, to ensure that the IPF PPS
is able to account adequately for each
IPF’s case-mix, we performed an
extensive regression analysis of the
relationship between the per diem costs
and certain patient and facility
characteristics to determine those
characteristics associated with
statistically significant cost differences
on a per diem basis. For characteristics
with statistically significant cost
differences, we used the regression
coefficients of those variables to
determine the size of the corresponding
payment adjustments.
In that final rule, we explained that
we believe it is important to delay
updating the adjustment factors derived
from the regression analysis until we
have IPF PPS data that include as much
information as possible regarding the
patient-level characteristics of the
population that each IPF serves.
Therefore, we indicated that we did not
intend to update the regression analysis
and the patient- and facility-level
adjustments until we complete that
analysis. Until that analysis is complete,
we stated our intention to publish a
notice in the Federal Register each
spring to update the IPF PPS (71 FR
27041). We have begun the necessary
analysis to make refinements to the IPF
PPS using more current data to set the
adjustment factors; however, we are not
proposing any refinements in this
proposed rule. Rather, as explained in
section IV.B. of this proposed rule, we
expect that in future rulemaking we will
be ready to propose potential
refinements.
In the May 6, 2011 IPF PPS final rule
(76 FR 26432), we changed the payment
rate update period to a RY that
coincides with a FY update. Therefore,
update notices are now published in the
Federal Register in the summer to be
effective on October 1. When proposing
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
changes in IPF payment policy, a
proposed rule would be issued in the
spring and the final rule in the summer
in order to be effective on October 1. For
further discussion on changing the IPF
PPS payment rate update period to a RY
that coincides with a FY, see the IPF
PPS final rule published in the Federal
Register on May 6, 2011 (76 FR 26434
through 26435). For a detailed list of
updates to the IPF PPS, see 42 CFR
412.428.
Our most recent IPF PPS annual
update occurred in an August 6, 2014,
Federal Register final rule (79 FR
45938) (hereinafter referred to as the
August 2014 IPF PPS final rule) that set
forth updates to the IPF PPS payment
rates for FY 2015. That rule updated the
IPF PPS per diem payment rates that
were published in the August 2013 IPF
PPS notice (78 FR 46734) in accordance
with our established policies.
III. Provisions of the Proposed Rule
A. Proposed Market Basket for the IPF
PPS
1. Background
The input price index that was used
to develop the IPF PPS was the
Excluded Hospital with Capital market
basket. This market basket was based on
1997 Medicare cost reports for Medicare
participating IRFs, IPFs, LTCHs, cancer
hospitals, and children’s hospitals.
Although ‘‘market basket’’ technically
describes the mix of goods and services
used in providing health care at a given
point in time, this term is also
commonly used to denote the input
price index (that is, cost category
weights and price proxies) derived from
that market basket. Accordingly, the
term ‘‘market basket,’’ as used in this
document, refers to an input price
index.
Beginning with the May 2006 IPF PPS
final rule (71 FR 27046 through 27054),
IPF PPS payments were updated using
a 2002-based RPL market basket
reflecting the operating and capital cost
structures for freestanding IRFs,
freestanding IPFs, and LTCHs. Cancer
and children’s hospitals were excluded
from the RPL market basket because
their payments are based entirely on
reasonable costs subject to rate-ofincrease limits established under the
authority of section 1886(b) of the Act
and not through a PPS. Also, the 2002
cost structures for cancer and children’s
hospitals are noticeably different than
the cost structures of freestanding IRFs,
freestanding IPFs, and LTCHs. See the
May 2006 IPF PPS final rule (71 FR
27046 through 27054) for a complete
discussion of the 2002-based RPL
market basket.
PO 00000
Frm 00006
Fmt 4701
Sfmt 4702
In the May 1, 2009 IPF PPS notice (74
FR 20376), we expressed our interest in
exploring the possibility of creating a
stand-alone IPF market basket that
reflects the cost structures of only IPF
providers. One available option was to
combine the Medicare cost report data
from freestanding IPF providers with
Medicare cost report data from hospitalbased IPF providers. We indicated that
an examination of the Medicare cost
report data comparing freestanding IPFs
and hospital-based IPFs showed
differences between cost levels and cost
structures. At that time, we were unable
to fully understand these differences
even after reviewing explanatory
variables such as geographic variation,
case mix (including DRG, comorbidity,
and age), urban or rural status, teaching
status, and presence of a qualifying
emergency department. As a result, we
continued to research ways to reconcile
the differences and solicited public
comment for additional information that
might help us to better understand the
reasons for the variations in costs and
cost structures, as indicated by the
Medicare cost report data (74 FR 20376).
We summarized the public comments
we received and our responses in the
April 2010 IPF PPS notice (75 FR 23111
through 23113). Despite receiving
comments from the public on this issue,
we were still unable to sufficiently
reconcile the observed differences in
costs and cost structures between
hospital-based and freestanding IPFs,
and, therefore, we did not believe it to
be appropriate at that time to
incorporate data from hospital-based
IPFs with those of freestanding IPFs to
create a stand-alone IPF market basket.
Beginning with the RY 2012 IPF PPS
final rule (76 FR 26432), IPF PPS
payments were updated using a 2008based RPL market basket reflecting the
operating and capital cost structures for
freestanding IRFs, freestanding IPFs,
and LTCHs. The major changes for RY
2012 included: Updating the base year
from FY 2002 to FY 2008; using a more
specific composite chemical price
proxy; breaking the professional fees
cost category into 2 separate categories
(Labor-related and Nonlabor-related);
and adding 2 additional cost categories
(Administrative and Facilities Support
Services and Financial Services), which
were previously included in the
residual All Other Services cost
categories. The RY 2012 IPF PPS
proposed rule (76 FR 4998) and RY 2012
final rule (76 FR 26432) contain a
complete discussion of the development
of the 2008-based RPL market basket.
For FY 2016, we are proposing to
create a 2012-based IPF market basket,
using Medicare cost report data for both
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
freestanding and hospital-based IPFs. In
the following discussion, we provide an
overview of the proposed market basket
and describe the methodologies used to
determine the operating and capital
portions of the proposed 2012-based IPF
market basket.
2. Overview of the Proposed 2012-Based
IPF Market Basket
The proposed 2012-based IPF market
basket is a fixed-weight, Laspeyres-type
price index. A Laspeyres price index
measures the change in price, over time,
of the same mix of goods and services
purchased in the base period. Any
changes in the quantity or mix of goods
and services (that is, intensity)
purchased over time relative to a base
period are not measured.
The index itself is constructed in 3
steps. First, a base period is selected (in
this proposed rule, the base period is FY
2012) and total base period
expenditures are estimated for a set of
mutually exclusive and exhaustive
spending categories with the proportion
of total costs that each category
represents being calculated. These
proportions are called cost or
expenditure weights. Second, each
expenditure category is matched to an
appropriate price or wage variable,
referred to as a price proxy. In nearly
every instance, these price proxies are
derived from publicly available
statistical series that are published on a
consistent schedule (preferably at least
on a quarterly basis). Finally, the
expenditure weight for each cost
category is multiplied by the level of its
respective price proxy. The sum of these
products (that is, the expenditure
weights multiplied by their price levels)
for all cost categories yields the
composite index level of the market
basket in a given period. Repeating this
step for other periods produces a series
of market basket levels over time.
Dividing an index level for a given
period by an index level for an earlier
period produces a rate of growth in the
input price index over that timeframe.
As noted above, the market basket is
described as a fixed-weight index
because it represents the change in price
over time of a constant mix (quantity
and intensity) of goods and services
needed to furnish IPF services. The
effects on total expenditures resulting
from changes in the mix of goods and
services purchased subsequent to the
base period are not measured. For
example, an IPF hiring more nurses to
accommodate the needs of patients
would increase the volume of goods and
services purchased by the IPF, but
would not be factored into the price
change measured by a fixed-weight IPF
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
market basket. Only when the index is
rebased would changes in the quantity
and intensity be captured, with those
changes being reflected in the cost
weights. Therefore, we rebase the
market basket periodically so that the
cost weights reflect recent changes in
the mix of goods and services that IPFs
purchase (facility inputs) to furnish
inpatient care between base periods.
3. Creating an IPF-Specific Market
Basket
As discussed in section III.A.1, over
the last several years we have been
exploring the possibility of creating a
stand-alone, or IPF-specific, market
basket that reflects the cost structures of
only IPF providers. The major cost
weights for the 2008-based RPL market
basket were calculated using Medicare
cost report data for freestanding
facilities only. We used freestanding
facilities due to concerns regarding our
ability to incorporate Medicare cost
report data for hospital-based providers.
In the FY 2015 IPF PPS final rule (79 FR
45941), we presented several of these
concerns (as stated below) but explained
that we would continue to research the
possibility of creating an IPF-specific
market basket to update IPF PPS
payments.
Since the FY 2015 IPF PPS final rule,
we have performed additional research
on the Medicare cost report data
available for hospital-based IPFs and
evaluated these concerns. We
subsequently concluded from this
research that Medicare cost report data
for both hospital-based IPFs and
freestanding IPFs can be used to
calculate the major market basket cost
weights for a stand-alone IPF market
basket. We have developed a detailed
methodology to derive market basket
cost weights that are representative of
the universe of IPF providers. We
believe the use of this proposed IPF
market basket is a technical
improvement over the RPL market
basket that is currently used to update
IPF PPS payments. As a result, in this
FY 2016 IPF PPS proposed rule, we are
proposing a 2012-based IPF market
basket that reflects data for both
freestanding and hospital-based IPFs.
Below we discuss our prior concerns
and provide reasons for why we now
feel it is appropriate to create a standalone IPF market basket using Medicare
cost report data for both hospital-based
and freestanding IPFs.
One concern we discussed in the FY
2015 IPF PPS final rule (79 FR 45941)
about using the hospital-based IPF
Medicare cost report data was the cost
level differences for hospital-based IPFs
relative to freestanding IPFs were not
PO 00000
Frm 00007
Fmt 4701
Sfmt 4702
25017
readily explained by the specific
characteristics of the individual
providers and the patients that they
serve (for example, characteristics
related to case mix, urban/rural status,
teaching status, or presence of a
qualified emergency department). To
address this concern, we used
regression analysis to evaluate the effect
of including hospital-based IPF
Medicare cost report data in the
calculation of cost distributions. A more
detailed description of these regression
models can be found in the FY 2015 IPF
final rule (79 FR 45941). Based on this
analysis, we concluded that the
inclusion of those IPF providers with
unexplained variability in costs did not
significantly impact the cost weights
and, therefore, should not be a major
cause of concern.
Another concern regarding the
incorporation of hospital-based IPF data
into the calculation of the market basket
cost weights was the complexity of the
Medicare cost report data for these
providers. The freestanding IPFs
independently submit a Medicare cost
report for their facilities, making it
relatively straightforward to obtain the
cost categories necessary to determine
the major market basket cost weights.
However, Medicare cost report data
submitted for a hospital-based IPF are
embedded in the Medicare cost report
submitted for the entire hospital facility
in which the IPF is located. In order to
use Medicare cost report data from these
providers, we needed to determine the
appropriate adjustments to apply to the
data to ensure that the cost weights we
obtained would represent only the
hospital-based IPF (not the hospital as a
whole). Over the past year, we worked
to develop detailed methodologies to
calculate the major cost weights for both
freestanding and hospital-based IPFs.
We believe that our proposed
methodologies and the resulting cost
weights, described in section III.A.3.a.i
below, are reasonable and appropriate.
We welcome public comments on these
proposals.
We also evaluated the differences in
cost weights for hospital-based and
freestanding IPFs and found the most
significant differences occurred for
salaries and pharmaceutical costs.
Specifically, the hospital-based IPF
salary cost weights tend to be lower
than those of freestanding IPFs while
hospital-based IPF pharmaceutical cost
weights tend to be higher than those of
freestanding IPFs. Our proposed
methodology for deriving costs for each
of these categories can be found in
section III.A.3.a.i below. We will
continue to research and monitor these
E:\FR\FM\01MYP2.SGM
01MYP2
25018
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
cost shares to ensure that the differences
are explainable.
In summary, our research over the
past year allowed us to evaluate the
appropriateness of including hospitalbased IPF data in the calculation of the
major cost weights for an IPF market
basket. We believe that the proposed
methodologies for deriving the cost
weights give us the ability to create a
stand-alone IPF market basket that
reflects the cost structure of the universe
of IPF providers. Therefore, we believe
that the use of this proposed 2012-based
IPF market basket to update IPF PPS
payments is an improvement over the
current 2008-based RPL market basket.
a. Development of Cost Categories and
Weights
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
i. Medicare Cost Reports
The proposed 2012-based IPF market
basket consists of seven major cost
categories derived from the FY 2012
Medicare cost reports (CMS Form 2552–
10) for freestanding and hospital-based
IPFs, including Wages and Salaries,
Employee Benefits, Contract Labor,
Pharmaceuticals, Professional Liability
Insurance (PLI), Capital, and a residual.
The residual reflects all remaining costs
that are not captured in the other six
cost categories. The FY 2012 cost
reports include providers whose cost
report begin date is on or between
October 1, 2011, and September 30,
2012. We choose to use FY 2012 as the
base year because we believe that the
Medicare cost reports for this year
represent the most recent, complete set
of Medicare cost report data available
for IPFs at the time of rulemaking.
Prior Medicare cost report data used
to develop the RPL market basket
showed large differences between some
providers’ Medicare length of stay (LOS)
and total facility LOS. Since our goal is
to measure cost weights that are
reflective of case mix and practice
patterns associated with providing
services to Medicare beneficiaries, we
limited our selection of Medicare cost
reports used in the RPL market basket
to those facilities that had a Medicare
LOS that was within a comparable range
of their total facility average LOS. For
the 2008-based RPL market basket, we
used those IPF Medicare cost reports
whose average Medicare LOS was
within 30 percent of the average facility
LOS if the facility LOS was greater than
or equal to 15 days. For those IPFs
whose average facility LOS was less
than 15 days, the Medicare LOS had to
be within 50 percent of the average
facility LOS. When applying the LOS
trim to derive the 2008-based RPL
market basket, we found that those
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
providers that were excluded (of which
seventy percent were IPFs) had an
average facility LOS (40 days) that was
2 times larger than the Medicare LOS
(20 days).
To create the proposed 2012-based
IPF market basket, we reevaluated the
LOS trim based on FY 2012 Medicare
cost report data and the inclusion of
hospital-based providers. Based on our
analysis of the data, we are proposing to
apply a less restrictive LOS trim to
derive the 2012-based IPF market basket
than was applied to derive the RPL
market basket. For freestanding IPFs, we
propose to define the Medicare and
facility LOS as those reported on line 14
of Worksheet S–3, Part I (consistent
with the RPL market basket method).
For hospital-based IPFs, we are
proposing to use line 16 of Worksheet
S–3, Part I to determine the Medicare
and facility LOS. To derive the
proposed 2012-based IPF market basket,
for those IPFs with an average facility
LOS of greater than or equal to 15 days,
we are proposing to include IPFs where
the Medicare LOS is within 50 percent
(higher or lower) of the average facility
LOS. For those IPFs whose average
facility LOS is less than 15 days, we are
proposing to include IPFs where the
Medicare LOS is within 95 percent
(higher or lower) of the facility LOS.
This less restrictive trim increases the
number of IPFs included in the
derivation of the market basket,
particularly for those providers where
the Medicare LOS and facility LOS is
within 5 days. Applying the proposed
trim results in IPF Medicare cost reports
with an average Medicare LOS of 12
days, average facility LOS of 10 days,
and Medicare utilization (as measured
by Medicare inpatient IPF days as a
percentage of total facility days) of 30
percent. If we were to apply the same
trim as was applied for the 2008-based
RPL market basket, it would result in
IPF Medicare cost reports with an
average Medicare LOS of 12 days,
average facility LOS of 9 days, and
Medicare utilization of 31 percent.
Those providers that were excluded
from the proposed 2012-based IPF
market basket have an average Medicare
LOS of 22 days, average facility LOS of
49 days, and a Medicare utilization of 5
percent. Of those Medicare cost reports
excluded from the proposed 2012-based
IPF market basket, about 70 percent of
these were freestanding providers
whereas freestanding providers
represent about 30 percent of all IPFs.
We believe the proposed trim is a
technical improvement as data from
more IPFs is used while still being
reflective of case mix and practice
PO 00000
Frm 00008
Fmt 4701
Sfmt 4702
patterns associated with providing
services to Medicare beneficiaries.
We applied this LOS trim to first
obtain a set of cost reports for facilities
that have a Medicare LOS within a
comparable range of their total facility
LOS. Using the resulting set of FY 2012
Medicare cost reports for freestanding
IPFs and hospital-based IPFs, we are
proposing to calculate costs for the six
major cost categories (Wages and
Salaries, Employee Benefits, Contract
Labor, Professional Liability Insurance,
Pharmaceuticals, and Capital).
Similar to the 2008-based RPL market
basket major cost weights, the proposed
2012-based IPF market basket cost
weights reflect Medicare allowable costs
(routine, ancillary and capital costs) that
are eligible for inclusion under the IPF
PPS payments. We define Medicare
allowable costs for freestanding
facilities as cost centers (CMS Form
2552–10): 30 through 35, 50 through 76
(excluding 52 and 75), 90 through 91,
and 93. We define Medicare allowable
costs for hospital-based facilities as cost
centers (CMS Form 2552–10): 40, 50
through 76 (excluding 52 and 75), 90
through 91, and 93. For freestanding
IPFs, total Medicare allowable costs are
equal to the total costs as reported on
Worksheet B, part I, column 26. For
hospital-based IPFs, total Medicare
allowable costs are equal to total costs
for the IPF inpatient unit after the
allocation of overhead costs (Worksheet
B, part I, column 26, line 40) and a
portion of total ancillary costs. We
calculate the portion of ancillary costs
attributable to the hospital-based IPF for
a given ancillary cost center by
multiplying total facility ancillary costs
for the specific cost center (as reported
on Worksheet B, Part I, column 26) by
the ratio of IPF Medicare ancillary costs
for the cost center (as reported on
Worksheet D–3, column 3 for IPF
subproviders) to total Medicare
ancillary costs for the cost center (equal
to the sum of Worksheet D–3, column 3
for all relevant PPS (that is, IPPS, IRF,
IPF and Skilled Nursing Facility
(SNF))).
Below we provide a description of the
proposed methodologies used to derive
costs for the six major cost categories.
Wages and Salaries Costs
For freestanding IPFs, Wages and
Salaries costs are derived as the sum of
routine inpatient salaries, ancillary
salaries, and a proportion of overhead
(or general service cost center) salaries
as reported on Worksheet A, column 1.
Since overhead salary costs are
attributable to the entire IPF, we only
include the proportion attributable to
the Medicare allowable cost centers. We
E:\FR\FM\01MYP2.SGM
01MYP2
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
estimate the proportion of overhead
salaries that are attributed to Medicare
allowable costs centers by multiplying
the ratio of Medicare allowable salaries
to total salaries (Worksheet A, column 1,
line 200) times total overhead salaries.
A similar methodology was used to
derive Wages and Salaries costs in the
2008-based RPL market basket.
For hospital-based IPFs, Wages and
Salaries costs are derived as the sum of
inpatient unit wages and salaries
(Worksheet A, column 1, line 40) and a
portion of salary costs attributable to
total facility ancillary and overhead cost
centers as these cost centers are shared
with the entire facility. We calculate the
portion of ancillary salaries attributable
to the hospital-based IPF for a given
ancillary cost center by multiplying
total facility ancillary salary costs for
the specific cost center (as reported on
Worksheet A, column 1) by the ratio of
IPF Medicare ancillary costs for the cost
center (as reported on Worksheet D–3,
column 3 for IPF subproviders) to total
Medicare ancillary costs for the cost
center (equal to the sum of Worksheet
D–3, column 3 for all relevant PPS units
(that is, IPPS, IRF, IPF and SNF)). For
example, if hospital-based IPF Medicare
laboratory costs represent 10 percent of
the total Medicare laboratory costs for
the entire facility, then 10 percent of
total facility laboratory salaries (as
reported in Worksheet A, column 1, line
60) would be attributable to the
hospital-based IPF. We believe it is
appropriate to use only a portion of the
ancillary costs in the market basket cost
weight calculations since the hospitalbased IPF only utilizes a portion of the
facility’s ancillary services. We believe
the ratio of reported IPF Medicare costs
to reported total Medicare costs
provides a reasonable estimate of the
ancillary services utilized, and costs
incurred, by the hospital-based IPF.
We calculate the portion of overhead
salary costs attributable to hospitalbased IPFs by multiplying the total
overhead costs attributable to the
hospital-based IPF (sum of columns 4
through18 on Worksheet B, part I, line
40) by the ratio of total facility overhead
salaries (as reported on Worksheet A,
column 1, lines 4 through18) to total
facility overhead costs (as reported on
Worksheet A, column 7, lines 4
through18). This methodology assumes
the proportion of total costs related to
salaries for the overhead cost centers is
similar for all inpatient units (that is,
acute inpatient or inpatient psychiatric).
Since the 2008-based RPL market basket
did not include hospital-based
providers, this proposed methodology
cannot be compared to the derivation of
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
Wages and Salaries costs in the 2008based RPL market basket.
Employee Benefits Costs
Effective with our implementation of
CMS Form 2552–10, CMS began
collecting Employee Benefits and
Contract Labor data on Worksheet S–3,
Part V. Previously, with CMS Form
2540–96, Employee Benefits and
Contract Labor data were reported on
Worksheet S–3, part II, which was
applicable to only IPPS providers and,
therefore, these data were not available
for the derivation of the RPL market
basket. Due to the lack of such data, the
Employee Benefits cost weight for the
2008-based RPL market basket was
derived by multiplying the 2008-based
RPL market basket Wages and Salaries
cost weight by the ratio of the IPPS
hospital market basket Employee
Benefits cost weight to the IPPS hospital
market basket Wages and Salaries cost
weight. Similarly, the Contract Labor
cost weight for the 2008-based RPL
market basket was derived by
multiplying the 2008-based RPL market
basket Wages and Salaries cost weight
by the ratio of the IPPS hospital market
basket Contract Labor cost weight to the
IPPS hospital market basket Wages and
Salaries cost weight.
For FY 2012 Medicare cost report
data, while there were providers that
did report data on Worksheet S–3, part
V, many providers did not complete this
worksheet. However, we believe we had
a large enough sample to enable us to
produce reasonable Employee Benefits
cost weights. We continue to encourage
all providers to report these data on the
Medicare cost report.
For freestanding IPFs, Employee
Benefits costs are equal to the data
reported on Worksheet S–3, Part V, line
2, column 2.
For hospital-based IPFs, we calculate
total benefits as the sum of benefit costs
reported on Worksheet S–3 Part V, line
3, column 2, and a portion of ancillary
benefits and overhead benefits for the
total facility. Ancillary benefits
attributable to the hospital-based IPF are
calculated by multiplying ancillary
salaries for the hospital-based IPF as
determined in the derivation of Wages
and Salaries for the hospital-based IPF
by the ratio of total facility benefits to
total facility salaries. Similarly,
overhead benefits attributable to the
hospital-based IPF are calculated by
multiplying overhead salaries for the
hospital-based IPF as determined in the
derivation of Wages and Salaries for the
hospital-based IPF by the ratio of total
facility benefits to total facility salaries.
PO 00000
Frm 00009
Fmt 4701
Sfmt 4702
25019
Contract Labor Costs
Similar to the RPL and IPPS market
baskets, Contract Labor costs are
primarily associated with direct patient
care services. Contract labor costs for
other services such as accounting,
billing, and legal are calculated
separately using other government data
sources as described in section
III.A.3.a.ii. As discussed above in the
Employee Benefits section, we now
have data reported on Worksheet S–3,
Part V that we can use to derive the
Contract Labor cost weight for the 2012based IPF market basket. For
freestanding IPFs, Contract Labor costs
are based on data reported on
Worksheet S–3, part V, column 1, line
2 and for hospital-based IPFs Contract
Labor costs are based on line 3 of this
same worksheet. As previously noted,
for FY 2012 Medicare cost report data,
while there were providers that did
report data on Worksheet S–3, part V,
many providers did not complete this
worksheet. However, we believe we had
a large enough sample to enable us to
produce a reasonable Contract Labor
cost weight. We continue to encourage
all providers to report these data on the
Medicare cost report.
Pharmaceuticals Costs
For freestanding IPFs,
pharmaceuticals costs are based on nonsalary costs reported on Worksheet A,
column 7 less Worksheet A, column 1
for the pharmacy cost center (line 15)
and drugs charged to patients cost
center (line 73).
For hospital-based IPFs,
pharmaceuticals costs are based on a
portion of the non-salary pharmacy
costs and a portion of the non-salary
drugs charged to patient costs reported
for the total facility. Non-salary
pharmacy costs attributable to the
hospital-based IPF are calculated by
multiplying total pharmacy costs
attributable to the hospital-based IPF (as
reported on Worksheet B, column 15,
line 40) by the ratio of total non-salary
pharmacy costs (Worksheet A, column
2, line 15) to total pharmacy costs (sum
of Worksheet A, column 1 and 2 for line
15) for the total facility. Non-salary
drugs charged to patient costs
attributable to the hospital-based IPF are
calculated by multiplying total nonsalary drugs charged to patient costs
(Worksheet B, part I, column 0, line 73
plus Worksheet B, part I, column 15,
line 73 less Worksheet A, column 1, line
73) for the total facility by the ratio of
Medicare drugs charged to patient
ancillary costs for the IPF unit (as
reported on Worksheet D–3 for IPF
subproviders, line 73, column 3) to total
E:\FR\FM\01MYP2.SGM
01MYP2
25020
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
Medicare drugs charged to patients
ancillary costs for the total facility
(equal to the sum of Worksheet D–3,
line 73, column 3, for all relevant PPS
(i.e. IPPS, IRF, IPF and SNF)).
Professional Liability Insurance (PLI)
Costs
For freestanding IPFs, PLI costs (often
referred to as malpractice costs) are
equal to premiums, paid losses and selfinsurance costs reported on Worksheet
S–2, line 118, columns 1 through 3.
For hospital-based IPFs, we assume
that the PLI weight for the total facility
is similar to the hospital-based IPF unit
since the only data reported on this
worksheet is for the entire facility.
Therefore, hospital-based IPF PLI costs
are equal to total facility PLI (as
reported on Worksheet S–2, line 118,
columns 1 through 3) divided by total
facility costs (as reported on Worksheet
A, line 200) times hospital-based IPF
Medicare allowable total costs.
Capital Costs
For freestanding IPFs, capital costs are
equal to Medicare allowable capital
costs as reported on Worksheet B, Part
II, column 26.
For hospital-based IPFs, capital costs
are equal to IPF inpatient capital costs
(as reported on Worksheet B, part II,
column 26, line 40) and a portion of IPF
ancillary capital costs. We calculate the
portion of ancillary capital costs
attributable to the hospital-based IPF for
a given cost center by multiplying total
facility ancillary capital costs for the
specific ancillary cost center (as
reported on Worksheet B, Part II,
column 26) by the ratio of IPF Medicare
ancillary costs for the cost center (as
reported on Worksheet D–3, column 3
for IPF subproviders) to total Medicare
ancillary costs for the cost center (equal
to the sum of Worksheet D–3, column 3
for all relevant PPS (that is, IPPS, IRF,
IPF and SNF)).
i. Final Major Cost Category
Computation
After we derive costs for the six major
cost categories for each provider using
the Medicare cost report data as
described above, we trim the data for
outliers based on the following steps.
First, we divide the costs for each of the
six categories by total Medicare
allowable costs calculated for the
provider to obtain cost weights for the
universe of IPF providers. Next, we
apply a mutually exclusive top and
bottom 5 percent trim for each cost
weight to remove outliers. After the
outliers have been removed, we sum the
costs for each category across all
remaining providers. We then divide
this by the sum of total Medicare
allowable costs across all remaining
providers to obtain a cost weight for the
proposed 2012-based IPF market basket
for the given category. Finally, we
calculate the residual ‘‘All Other’’ cost
weight that reflects all remaining costs
that are not captured in the six cost
categories listed above. See Table 1
below for the resulting cost weights for
these major cost categories that we
obtain from the Medicare cost reports.
TABLE 1—MAJOR COST CATEGORIES AS DERIVED FROM MEDICARE COST REPORTS
2012-Based
IPF
(percent)
Major cost categories
Wages and Salaries ................................................................................................................................................
Employee Benefits 1 .................................................................................................................................................
Contract Labor 1 .......................................................................................................................................................
Professional Liability Insurance (Malpractice) .........................................................................................................
Pharmaceuticals ......................................................................................................................................................
Capital ......................................................................................................................................................................
All Other ...................................................................................................................................................................
2008-Based
RPL
(percent)
50.8
13.0
1.4
1.1
4.8
7.0
22.0
47.4
12.3
2.6
0.8
6.5
8.4
22.0
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
* Total may not sum to 100 due to rounding.
1 Due to the lack of Medicare cost report data, the Employee Benefits and Contract Labor cost weights in the 2008-based RPL market basket
were based on the IPPS market basket.
The Wages and Salaries cost weight
obtained directly from the Medicare cost
reports for the proposed 2012-based IPF
market basket is approximately 3
percentage points higher than the Wages
and Salaries cost weight for the 2008based RPL market basket. This is the
result of freestanding IPFs having a
larger percentage of costs attributable to
labor than freestanding Inpatient
Rehabilitation Facilities (IRF) and Longterm care hospitals. These latter
facilities were included in the 2008based RPL market basket.
As we did for the 2008-based RPL
market basket, we propose to allocate
the Contract Labor cost weight to the
Wages and Salaries and Employee
Benefits cost weights based on their
relative proportions under the
assumption that contract labor costs are
comprised of both wages and salaries
and employee benefits. The Contract
Labor allocation proportion for Wages
and Salaries is equal to the Wages and
Salaries cost weight as a percent of the
sum of the Wages and Salaries cost
weight and the Employee Benefits cost
weight. This rounded percentage is 80
percent; therefore, we propose to
allocate 80 percent of the Contract Labor
cost weight to the Wages and Salaries
cost weight and 20 percent to the
Employee Benefits cost weight. Table 2
shows the Wages and Salaries and
Employee Benefit cost weights after
Contract Labor cost weight allocation for
both the proposed 2012-based IPF
market basket and 2008-based RPL
market basket.
TABLE 2—WAGES AND SALARIES AND EMPLOYEE BENEFITS COST WEIGHTS AFTER CONTRACT LABOR ALLOCATION
2012-Based
IPF
Major cost categories
Wages and Salaries ................................................................................................................................................
Employee Benefits ...................................................................................................................................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00010
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
51.9
13.3
2008-Based
RPL
49.4
12.8
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
i. Derivation of the Detailed Operating
Cost Weights
To further divide the ‘‘All Other’’
residual cost weight estimated from the
FY 2012 Medicare Cost Report data into
more detailed cost categories, we
propose to use the 2007 Benchmark
Input-Output (I–O) ‘‘Use Tables/Before
Redefinitions/Purchaser Value’’ for
North American Industry Classification
System (NAICS) 622000 Hospitals,
published by the Bureau of Economic
Analysis (BEA). These data are publicly
available at the following Web site:
https://www.bea.gov/industry/io_
annual.htm.
The BEA Benchmark I–O data are
scheduled for publication every five
years with the most recent data
available for 2007. The 2007 Benchmark
I–O data are derived from the 2007
Economic Census and are the building
blocks for BEA’s economic accounts.
Thus, they represent the most
comprehensive and complete set of data
on the economic processes or
mechanisms by which output is
produced and distributed.1 BEA also
produces Annual I–O estimates;
however, while based on a similar
methodology, these estimates reflect less
comprehensive and less detailed data
sources and are subject to revision when
benchmark data becomes available.
Instead of using the less detailed
Annual I–O data, we inflate the 2007
Benchmark I–O data forward to 2012 by
applying the annual price changes from
the respective price proxies to the
appropriate market basket cost
categories that are obtained from the
2007 Benchmark I–O data. We repeat
this practice for each year. We then
calculate the cost shares that each cost
category represents of the inflated 2012
data. These resulting 2012 cost shares
are applied to the All Other residual
cost weight to obtain the detailed cost
weights for the proposed 2012-based IPF
market basket. For example, the cost for
Food: Direct Purchases represents 6.5
percent of the sum of the ‘‘All Other’’
2007 Benchmark I–O Hospital
Expenditures inflated to 2012; therefore,
the Food: Direct Purchases cost weight
represents 6.5 percent of the 2012-based
IPF market basket’s ‘‘All Other’’ cost
category (22.0 percent), yielding a
‘‘final’’ Food: Direct Purchases cost
weight of 1.4 percent in the proposed
2012-based IPF market basket (0.065 *
22.0 percent = 1.4 percent).
Using this methodology, we derive
eighteen detailed IPF market basket cost
category weights from the proposed
2012-based IPF market basket residual
1 https://www.bea.gov/papers/pdf/IOmanual_
092906.pdf.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
cost weight (22.0 percent). These
categories are: (1) Electricity, (2) Fuel,
Oil, and Gasoline (3) Water & Sewerage
(4) Food: Direct Purchases, (5) Food:
Contract Services, (6) Chemicals, (7)
Medical Instruments, (8) Rubber &
Plastics, (9) Paper and Printing
Products, (10) Miscellaneous Products,
(11) Professional Fees: Labor-related,
(12) Administrative and Facilities
Support Services, (13) Installation,
Maintenance, and Repair, (14) All Other
Labor-related Services, (15) Professional
Fees: Nonlabor-related, (16) Financial
Services, (17) Telephone Services, and
(18) All Other Nonlabor-related
Services.
iii. Derivation of the Detailed Capital
Cost Weights
As described in section III.A.3.a.i of
this preamble, we are proposing a
Capital-Related cost weight of 7.0
percent as obtained from the FY 2012
Medicare cost reports for freestanding
and hospital-based IPF providers. We
are proposing to then separate this total
Capital-Related cost weight into more
detailed cost categories.
Using FY 2012 Medicare cost reports,
we are able to group Capital-Related
costs into the following categories:
Depreciation, Interest, Lease, and Other
Capital-Related costs. For each of these
categories, we are proposing to
determine separately for hospital-based
IPFs and freestanding IPFs what
proportion of total capital-related costs
the category represent.
For freestanding IPFs, we are
proposing to derive the proportions for
Depreciation, Interest, Lease, and Other
Capital-related costs using the data
reported by the IPF on Worksheet A–7,
which is similar to the methodology
used for the 2008-based RPL market
basket.
For hospital-based IPFs, data for these
four categories are not reported
separately for the subprovider;
therefore, we are proposing to derive
these proportions using data reported on
Worksheet A–7 for the total facility. We
are assuming the cost shares for the
overall hospital are representative for
the hospital-based subprovider IPF unit.
For example, if depreciation costs make
up 60 percent of total capital costs for
the entire facility, we believe it is
reasonable to assume that the hospitalbased IPF would also have a 60 percent
proportion because it is a subprovider
unit contained within the total facility.
In order to combine each detailed
capital cost weight for freestanding and
hospital-based IPFs into a single capital
cost weight for the proposed 2012-based
IPF market basket, we are proposing to
weight together the shares for each of
PO 00000
Frm 00011
Fmt 4701
Sfmt 4702
25021
the categories (Depreciation, Interest,
Lease, and Other Capital-related costs)
based on the share of total capital costs
each provider type represents of the
total capital costs for all IPFs for 2012.
Applying this methodology results in
proportions of total capital-related costs
for Depreciation, Interest, Lease and
Other Capital-related costs that are
representative of the universe of IPF
providers.
We next are proposing to allocate
lease costs across each of the remaining
detailed capital-related cost categories
as was done in the 2008-based RPL
market basket. This would result in 3
primary capital-related cost categories
in the proposed 2012-based IPF market
basket: Depreciation, Interest, and Other
Capital-Related costs. Lease costs are
unique in that they are not broken out
as a separate cost category in the
proposed 2012-based IPF market basket,
but rather we are proposing to
proportionally distribute these costs
among the cost categories of
Depreciation, Interest, and Other
Capital-Related, reflecting the
assumption that the underlying cost
structure of leases is similar to that of
capital-related costs in general. As was
done under the 2008-based RPL market
basket, we are proposing to assume that
10 percent of the lease costs as a
proportion of total capital-related costs
represents overhead and assign those
costs to the Other Capital-Related cost
category accordingly. We propose to
distribute the remaining lease costs
proportionally across the 3 cost
categories (Depreciation, Interest, and
Other Capital-Related) based on the
proportion that these categories
comprise of the sum of the Depreciation,
Interest, and Other Capital-related cost
categories (excluding lease expenses).
This is the same methodology used for
the 2008-based RPL market basket. The
allocation of these lease expenses are
shown in Table 3 below.
Finally, we are proposing to further
divide the Depreciation and Interest cost
categories. We are proposing to separate
Depreciation into the following 2
categories: (1) Building and Fixed
Equipment; and (2) Movable Equipment;
and proposing to separate Interest into
the following 2 categories: (1)
Government/Nonprofit; and (2) Forprofit.
To disaggregate the Depreciation cost
weight, we need to determine the
percent of total Depreciation costs for
IPFs that is attributable to Building and
Fixed Equipment, which we hereafter
refer to as the ‘‘fixed percentage.’’ For
the proposed 2012-based IPF market
basket, we are proposing to use slightly
different methods to obtain the fixed
E:\FR\FM\01MYP2.SGM
01MYP2
25022
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
percentages for hospital-based IPFs
compared to freestanding IPFs.
For freestanding IPFs, we are
proposing to use depreciation data from
Worksheet A–7 of the FY 2012 Medicare
cost reports, similar to the methodology
used for the 2008-based RPL market
basket. However, for hospital-based
IPFs, we determined that the fixed
percentage for the entire facility may not
be representative of the IPF subprovider
unit due to the entire facility likely
employing more sophisticated movable
assets that are not utilized by the
hospital-based IPF. Therefore, for
hospital-based IPFs, we are proposing to
calculate a fixed percentage using: (1)
Building and fixture capital costs
allocated to the subprovider unit as
reported on Worksheet B, part I line 40;
and (2) building and fixture capital costs
for the top five ancillary cost centers
utilized by hospital-based IPFs. We
propose to weight these 2 fixed
percentages (inpatient and ancillary)
using the proportion that each capital
cost type represents of total capital costs
in the proposed 2012-based IPF market
basket. We are proposing to then weight
the fixed percentages for hospital-based
and freestanding IPFs together using the
proportion of total capital costs each
provider type represents.
To disaggregate the Interest cost
weight, we need to determine the
percent of total interest costs for IPFs
that are attributable to government and
nonprofit facilities, which we hereafter
refer to as the ‘‘nonprofit percentage.’’
For the IPF market basket, we are
proposing to use interest costs data from
Worksheet A–7 of the FY 2012 Medicare
cost reports for both freestanding and
hospital-based IPFs, similar to the
methodology used for the 2008-based
RPL market basket. We are proposing to
determine the percent of total interest
costs that are attributed to government
and nonprofit IPFs separately for
hospital-based and freestanding IPFs.
We then are proposing to weight the
nonprofit percentages for hospital-based
and freestanding IPFs together using the
proportion of total capital costs each
provider type represents.
Table 3 below provides the detailed
capital cost shares obtained from the
Medicare cost reports. Ultimately, these
detailed capital cost shares are applied
to the total Capital-Related cost weight
determined in section III.A.3.a.i to split
out the total weight of 7.0 percent into
more detailed cost categories and
weights.
TABLE 3—DETAILED CAPITAL COST WEIGHTS FOR THE PROPOSED 2012-BASED IPF MARKET BASKET
Cost shares
obtained from
medicare cost
reports
percent
Depreciation .............................................................................................................................................................
Building and Fixed Equipment .................................................................................................................................
Movable Equipment .................................................................................................................................................
Interest .....................................................................................................................................................................
Government/Nonprofit ..............................................................................................................................................
For Profit ..................................................................................................................................................................
Lease .......................................................................................................................................................................
Other ........................................................................................................................................................................
v. Proposed 2012-Based IPF Market
Basket Cost Categories and Weights
Proposed detailed capital
cost shares
after allocation
of lease expenses
percent
64
46
19
15
12
2
15
6
75
53
22
17
14
3
n/a
8
2012-based IPF market basket compared
to the 2008-based RPL market basket.
Table 4 below shows the cost
categories and weights for the proposed
TABLE 4—PROPOSED 2012-BASED IPF COST WEIGHTS COMPARED TO 2008-BASED RPL COST WEIGHTS
Proposed
2012-Based
IPF cost
weight
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Cost category
Total .........................................................................................................................................................................
Compensation ...................................................................................................................................................
Wages and Salaries ...........................................................................................................................
Employee Benefits .............................................................................................................................
Utilities ..............................................................................................................................................................
Electricity ............................................................................................................................................
Fuel, Oil, and Gasoline ......................................................................................................................
Water & Sewerage .............................................................................................................................
Professional Liability Insurance ........................................................................................................................
Malpractice .........................................................................................................................................
All Other Products and Services ......................................................................................................................
All Other Products .....................................................................................................................................
Pharmaceuticals .................................................................................................................................
Food: Direct Purchases .....................................................................................................................
Food: Contract Services ....................................................................................................................
Chemicals ...........................................................................................................................................
Medical Instruments ...........................................................................................................................
Rubber & Plastics ..............................................................................................................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00012
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
100.0
65.2
51.9
13.3
1.8
0.8
0.9
0.1
1.1
1.1
25.0
11.7
4.8
1.4
0.9
0.6
1.9
0.5
2008-Based
RPL cost
weight
100.0
62.3
49.4
12.8
1.6
1.1
0.4
0.1
0.8
0.8
27.0
15.6
6.5
3.0
0.4
1.1
1.8
1.1
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
25023
TABLE 4—PROPOSED 2012-BASED IPF COST WEIGHTS COMPARED TO 2008-BASED RPL COST WEIGHTS—Continued
Proposed
2012-Based
IPF cost
weight
Cost category
Paper and Printing Products ..............................................................................................................
Apparel ...............................................................................................................................................
Machinery and Equipment .................................................................................................................
Miscellaneous Products .....................................................................................................................
All Other Services .............................................................................................................................................
Labor-Related Services .............................................................................................................................
Professional Fees: Labor-related .......................................................................................................
Administrative and Facilities Support Services ..................................................................................
Installation, Maintenance, and Repair ...............................................................................................
All Other: Labor-related Services .......................................................................................................
Nonlabor-Related Services .......................................................................................................................
Professional Fees: Nonlabor-related .................................................................................................
Financial services ...............................................................................................................................
Telephone Services ...........................................................................................................................
Postage ..............................................................................................................................................
All Other: Nonlabor-related Services .................................................................................................
Capital-Related Costs .......................................................................................................................................
Depreciation ..............................................................................................................................................
Fixed Assets .......................................................................................................................................
Movable Equipment ...........................................................................................................................
Interest Costs ............................................................................................................................................
Government/Nonprofit ........................................................................................................................
For Profit ............................................................................................................................................
Other Capital-Related Costs .....................................................................................................................
Other Capital-Related Costs ..............................................................................................................
The proposed 2012-based IPF market
basket does not include separate cost
categories for Apparel, Machinery &
Equipment, and Postage. Due to the
small weights associated with these
detailed categories and relatively stable
price growth in the applicable price
proxy, we are proposing to include
Apparel and Machinery & Equipment in
the Miscellaneous Products cost
category and Postage in the All-Other
Nonlabor-related Services. We note that
these Machinery & Equipment expenses
are for equipment that is paid for in a
given year and not depreciated over the
assets’ useful life. Depreciation
expenses for movable equipment are
reflected in the Capital-related costs of
the proposed 2012-based IPF market
basket. For the proposed 2012-based IPF
market basket, we are also proposing to
include a separate cost category for
Installation, Maintenance, and Repair.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
b. Selection of Price Proxies
After developing the cost weights for
the proposed 2012-based IPF market
basket, we selected the most appropriate
wage and price proxies currently
available to represent the rate of price
change for each expenditure category.
For the majority of the cost weights, we
base the price proxies on Bureau of
Labor Statistics (BLS) data and group
them into one of the following BLS
categories:
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
• Employment Cost Indexes.
Employment Cost Indexes (ECIs)
measure the rate of change in
employment wage rates and employer
costs for employee benefits per hour
worked. These indexes are fixed-weight
indexes and strictly measure the change
in wage rates and employee benefits per
hour. ECIs are superior to Average
Hourly Earnings (AHE) as price proxies
for input price indexes because they are
not affected by shifts in occupation or
industry mix, and because they measure
pure price change and are available by
both occupational group and by
industry. The industry ECIs are based
on the North American Classification
System (NAICS) and the occupational
ECIs are based on the Standard
Occupational Classification System
(SOC).
• Producer Price Indexes. Producer
Price Indexes (PPIs) measure price
changes for goods sold in other than
retail markets. PPIs are used when the
purchases of goods or services are made
at the wholesale level.
• Consumer Price Indexes. Consumer
Price Indexes (CPIs) measure change in
the prices of final goods and services
bought by consumers. CPIs are only
used when the purchases are similar to
those of retail consumers rather than
purchases at the wholesale level, or if
no appropriate PPIs are available.
PO 00000
Frm 00013
Fmt 4701
Sfmt 4702
2008-Based
RPL cost
weight
1.0
........................
........................
0.7
13.3
6.7
2.9
0.7
1.6
1.5
6.6
2.6
2.3
0.6
........................
1.1
7.0
5.2
3.7
1.5
1.2
1.0
0.2
0.6
0.6
1.0
0.2
0.1
0.3
11.4
4.7
2.1
0.4
........................
2.1
6.7
4.2
0.9
0.4
0.6
0.6
8.4
5.5
3.3
2.2
2.0
0.7
1.3
0.9
0.9
We evaluated the price proxies using
the criteria of reliability, timeliness,
availability, and relevance:
• Reliability. Reliability indicates that
the index is based on valid statistical
methods and has low sampling
variability. Widely accepted statistical
methods ensure that the data were
collected and aggregated in a way that
can be replicated. Low sampling
variability is desirable because it
indicates that the sample reflects the
typical members of the population.
(Sampling variability is variation that
occurs by chance because only a sample
was surveyed rather than the entire
population.)
• Timeliness. Timeliness implies that
the proxy is published regularly,
preferably at least once a quarter. The
market baskets are updated quarterly
and, therefore, it is important for the
underlying price proxies to be up-todate, reflecting the most recent data
available. We believe that using proxies
that are published regularly (at least
quarterly, whenever possible) helps to
ensure that we are using the most recent
data available to update the market
basket. We strive to use publications
that are disseminated frequently,
because we believe that this is an
optimal way to stay abreast of the most
current data available.
• Availability. Availability means that
the proxy is publicly available. We
prefer that our proxies are publicly
E:\FR\FM\01MYP2.SGM
01MYP2
25024
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
available because this will help ensure
that our market basket updates are as
transparent to the public as possible. In
addition, this enables the public to be
able to obtain the price proxy data on
a regular basis.
• Relevance. Relevance means that
the proxy is applicable and
representative of the cost category
weight to which it is applied. The CPIs,
PPIs, and ECIs that we have selected to
propose in this regulation meet these
criteria. Therefore, we believe that they
continue to be the best measure of price
changes for the cost categories to which
they would be applied.
Table 6 lists all price proxies for the
proposed 2012-based IPF market basket.
Below is a detailed explanation of the
price proxies we are proposing for each
cost category weight.
i. Price Proxies for the Operating Portion
of the Proposed 2012-Based IPF Market
Basket
Wages and Salaries
To measure wage price growth in the
proposed 2012-based IPF market basket,
we are proposing to apply a proxy blend
based on six occupational subcategories
within the Wages and Salaries category,
which would reflect the IPF
occupational mix. There is not a
published wage proxy for IPF workers.
The 2008-based RPL market basket uses
the ECI for Wages and Salaries for All
Civilian workers in Hospitals (BLS
series code #CIU1026220000000I) to
proxy these expenses.
We propose to use the National
Industry-Specific Occupational
Employment and Wage estimates for
North American Industrial
Classification System (NAICS) 622200,
Psychiatric & Substance Abuse
Hospitals, published by the BLS Office
of Occupational Employment Statistics
(OES), as the data source for the wage
cost shares in the wage proxy blend. We
propose to use OES’ May 2012 data.
Detailed information on the
methodology for the national industryspecific occupational employment and
wage estimates survey can be found at
https://www.bls.gov/oes/current/oes_
tec.htm.
Based on the OES data, there are six
wage subcategories: Management;
NonHealth Professional and Technical;
Health Professional and Technical;
Health Service; NonHealth Service; and
Clerical. Table 5 lists the proposed 2012
occupational assignments for the six
wage subcategories.
TABLE 5—PROPOSED 2012 OCCUPATIONAL ASSIGNMENTS FOR IPF WAGE BLEND
2012 PROPOSED OCCUPATIONAL GROUPINGS
Group 1
Management
11–0000 ....................................................................................................
Management Occupations.
Group 2
13–0000
15–0000
17–0000
19–0000
23–0000
25–0000
27–0000
NonHealth Professional & Technical
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
Business and Financial Operations Occupations.
Computer and Mathematical Science Occupations.
Architecture and Engineering Occupations.
Life, Physical, and Social Science Occupations.
Legal Occupations.
Education, Training, and Library Occupations.
Arts, Design, Entertainment, Sports, and Media Occupations.
Group 3
29–1021
29–1031
29–1051
29–1062
29–1063
29–1069
29–1071
29–1111
29–1122
29–1123
29–1125
29–1126
29–1127
29–1129
29–1199
Health Professional & Technical
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
Dentists, General.
Dietitians and Nutritionists.
Pharmacists.
Family and General Practitioners.
Internists, General.
Physicians and Surgeons, All Other.
Physician Assistants.
Registered Nurses.
Occupational Therapists.
Physical Therapists.
Recreational Therapists.
Respiratory Therapists.
Speech-Language Pathologists.
Therapists, All Other.
Health Diagnosing and Treating Practitioners, All Other.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Group 4
21–0000
29–2011
29–2012
29–2021
29–2032
29–2034
29–2041
29–2051
29–2052
29–2054
29–2061
29–2071
29–2099
29–9012
Health Service
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00014
Fmt 4701
Community and Social Services Occupations.
Medical and Clinical Laboratory Technologists.
Medical and Clinical Laboratory Technicians.
Dental Hygienists.
Diagnostic Medical Sonographers.
Radiologic Technologists and Technicians.
Emergency Medical Technicians and Paramedics.
Dietetic Technicians.
Pharmacy Technicians.
Respiratory Therapy Technicians.
Licensed Practical and Licensed Vocational Nurses.
Medical Records and Health Information Technicians.
Health Technologists and Technicians, All Other.
Occupational Health and Safety Technicians.
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
25025
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 5—PROPOSED 2012 OCCUPATIONAL ASSIGNMENTS FOR IPF WAGE BLEND—Continued
2012 PROPOSED OCCUPATIONAL GROUPINGS
29–9099 ....................................................................................................
31–0000 ....................................................................................................
Healthcare Practitioner and Technical Workers, All Other.
Healthcare Support Occupations.
Group 5
33–0000
35–0000
37–0000
39–0000
41–0000
47–0000
49–0000
51–0000
53–0000
NonHealth Service
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
....................................................................................................
Protective Service Occupations.
Food Preparation and Serving Related Occupations.
Building and Grounds Cleaning and Maintenance Occupations.
Personal Care and Service Occupations.
Sales and Related Occupations.
Construction and Extraction Occupations.
Installation, Maintenance, and Repair Occupations.
Production Occupations.
Transportation and Material Moving Occupations.
Group 6
Clerical
43–0000 ....................................................................................................
Total expenditures by occupation
(i.e., occupational assignment) were
calculated by taking the OES number of
employees multiplied by the OES
annual average salary. These
expenditures were aggregated based on
the six groups in Table 6. We next
Office and Administrative Support Occupations.
calculated the proportion of each
group’s expenditures relative to the total
expenditures of all six groups. These
proportions, listed in Table 5, represent
the weights used in the wage proxy
blend. We propose using the published
wage proxies in Table 6 for each of the
six groups (that is, wage subcategories)
as we believe these six price proxies are
the most technically appropriate indices
available to measure the price growth of
the Wages and Salaries cost category in
the proposed 2012-based IPF market
basket.
TABLE 6—PROPOSED 2012-BASED IPF MARKET BASKET WAGE PROXY BLEND
Wage blend
weight
Wage subcategory
Health Service ..............................
36.2
Health Professional and Technical
NonHealth Service ........................
33.5
9.2
NonHealth Professional and Technical.
Management .................................
7.3
Clerical ..........................................
6.7
Total .......................................
Price proxy
BLS Series ID
ECI for Wages and Salaries for All Civilian workers in Healthcare
and Social Assistance.
ECI for Wages and Salaries for All Civilian workers in Hospitals .....
ECI for Wages and Salaries for Private Industry workers in Service
Occupations.
ECI for Wages and Salaries for Private Industry workers in Professional, Scientific, and Technical Services.
ECI for Wages and Salaries for Private Industry workers in Management, Business, and Financial.
ECI for Wages and Salaries for Private Industry workers in Office
and Administrative Support.
CIU1026200000000I
100.0
7.1
A comparison of the yearly changes
from FY 2012 to FY 2015 for the
proposed 2012-based IPF wage blend
and the 2008-based RPL wage proxy is
shown in Table 7. The average annual
increase in the 2 price proxies is similar,
CIU1026220000000I
CIU2020000300000I
CIU2025400000000I
CIU2020000110000I
CIU2020000220000I
and in no year is the difference greater
than 0.2 percentage point.
TABLE 7—FISCAL YEAR GROWTH IN THE PROPOSED 2012-BASED IPF WAGE PROXY BLEND AND 2008-BASED RPL
WAGE PROXY
2012
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
2012-based IPF Proposed Wage Proxy Blend ...................
2008-based RPL Wage Proxy .............................................
2013
1.6
1.5
2014
1.6
1.5
Average
2012–2015
2015
1.6
1.5
2.2
2.0
1.8
1.6
** Source: IHS Global Insight, Inc., 1st Quarter 2015 forecast with historical data through 4th Quarter 2014.
Benefits
For measuring benefits price growth
in the proposed 2012-based IPF market
basket, we are proposing to apply a
benefits proxy blend based on the same
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
six subcategories and the same six blend
weights proposed for the wage proxy
blend. These subcategories and blend
weights are listed in Table 8.
Applicable benefit ECIs, that are
identical in industry definition to the
PO 00000
Frm 00015
Fmt 4701
Sfmt 4702
wage blend ECIs, were selected for each
of the six subcategories. These proposed
benefit ECIs, listed in Table 8, are not
publically available. Therefore, we
calculated ‘‘ECIs for Total Benefits’’
using publically available ‘‘ECIs for
E:\FR\FM\01MYP2.SGM
01MYP2
25026
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
Total Compensation’’ for each
subcategory and the relative importance
of wages within that subcategory’s total
compensation. This is the same benefits
ECI methodology we implemented in
our IPPS, SNF, HHA, RPL, LTCH, and
ESRD market baskets. We believe the six
price proxies listed in Table 8 are the
most technically appropriate indices to
measure the price growth of the Benefits
cost category in the proposed 2012based IPF market basket.
The current 2008-based RPL market
basket uses the ECI for Benefits for All
Civilian Workers in Hospitals to proxy
Benefit expenses.
TABLE 8—PROPOSED 2012-BASED IPF MARKET BASKET BENEFITS PROXY BLEND
Wage blend
weight
Wage subcategory
Health Service ..........................................
Health Professional and Technical ...........
NonHealth Service ....................................
NonHealth Professional and Technical ....
36.2
33.5
9.2
7.3
Management .............................................
7.1
Clerical ......................................................
6.7
Total ...................................................
Price proxy
100.0
A comparison of the yearly changes
from FY 2012 to FY 2015 for the
proposed 2012-based IPF benefit proxy
ECI for Total Benefits for All Civilian workers in Healthcare and Social Assistance.
ECI for Total Benefits for All Civilian workers in Hospitals.
ECI for Total Benefits for Private Industry workers in Service Occupations.
ECI for Total Benefits for Private Industry workers in Professional, Scientific, and
Technical Services.
ECI for Total Benefits for Private Industry workers in Management, Business, and
Financial.
ECI for Total Benefits for Private Industry workers in Office and Administrative Support.
blend and the 2008-based RPL benefit
proxy is shown in Table 9. The average
annual increase in the 2 price proxies is
similar, and in no year is the difference
greater than 0.4 percentage point.
TABLE 9—FISCAL YEAR GROWTH IN THE PROPOSED 2012-BASED IPF BENEFIT PROXY BLEND AND 2008-BASED RPL
BENEFIT PROXY
2012
2012-based IPF Proposed Benefit Proxy Blend ..................
2008-based RPL Benefit Proxy ...........................................
2013
2.5
2.1
2014
Average
2012–2015
2015
1.9
1.8
2.0
2.1
2.2
2.1
2.2
2.0
Source: IHS Global Insight, Inc., 1st Quarter 2015 forecast with historical data through 4th Quarter 2014.
Electricity
We are proposing to continue to use
the PPI for Commercial Electric Power
(BLS series code #WPU0542) to measure
the price growth of this cost category.
This is the same price proxy used in the
2008-based RPL market basket.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Fuel, Oil, and Gasoline
We are proposing to change the proxy
used for the Fuel, Oil, and Gasoline cost
category. The 2008-based RPL market
basket uses the PPI for Petroleum
Refineries (BLS series code #PCU32411–
32411) to proxy these expenses.
For the proposed 2012-based IPF
market basket, we are proposing to use
a blend of the PPI for Petroleum
Refineries and the PPI Commodity for
Natural Gas (BLS series code
#WPU0531). Our analysis of the Bureau
of Economic Analysis’ 2007 Benchmark
Input-Output data (use table before
redefinitions, purchaser’s value for
NAICS 622000 [Hospitals]), shows that
Petroleum Refineries expenses accounts
for approximately 70 percent and
Natural Gas accounts for approximately
30 percent of the Fuel, Oil, and Gasoline
expenses. Therefore, we propose a blend
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
using 70 percent of the PPI for
Petroleum Refineries (BLS series code
#PCU32411–32411) and 30 percent of
the PPI Commodity for Natural Gas (BLS
series code #WPU0531). We believe that
these 2 price proxies are the most
technically appropriate indices
available to measure the price growth of
the Fuel, Oil, and Gasoline cost category
in the proposed 2012-based IPF market
basket.
Water and Sewerage
We are proposing to continue to use
the CPI for Water and Sewerage
Maintenance (BLS series code
#CUUR0000SEHG01) to measure the
price growth of this cost category. This
is the same proxy used in the 2008based RPL market basket.
Professional Liability Insurance
We are proposing to continue to use
the CMS Hospital Professional Liability
Index to measure changes in
professional liability insurance (PLI)
premiums. To generate this index, we
collect commercial insurance premiums
for a fixed level of coverage while
holding non-price factors constant (such
PO 00000
Frm 00016
Fmt 4701
Sfmt 4702
as a change in the level of coverage).
This is the same proxy used in the 2008based RPL market basket.
Pharmaceuticals
We are proposing to continue to use
the PPI for Pharmaceuticals for Human
Use, Prescription (BLS series code
#WPUSI07003) to measure the price
growth of this cost category. This is the
same proxy used in the 2008-based RPL
market basket.
Food: Direct Purchases
We are proposing to continue to use
the PPI for Processed Foods and Feeds
(BLS series code #WPU02) to measure
the price growth of this cost category.
This is the same proxy used in the 2008based RPL market basket.
Food: Contract Purchases
We are proposing to continue to use
the CPI for Food Away From Home (BLS
series code #CUUR0000SEFV) to
measure the price growth of this cost
category. This is the same proxy used in
the 2008-based RPL market basket.
E:\FR\FM\01MYP2.SGM
01MYP2
25027
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
Chemicals
We are proposing to continue to use
a four part blended PPI composed of the
PPI for Industrial Gas Manufacturing
(BLS series code PCU325120325120P),
the PPI for Other Basic Inorganic
Chemical Manufacturing (BLS series
code #PCU32518–32518), the PPI for
Other Basic Organic Chemical
Manufacturing (BLS series code
#PCU32519–32519), and the PPI for
Soap and Cleaning Compound
Manufacturing (BLS series code
#PCU32561–32561). We propose
updating the blend weights using 2007
Benchmark I–O data which, compared
to 2002 Benchmark I–O data, is
weighted more toward organic chemical
products and weighted less toward
inorganic chemical products.
Table 10 below shows the proposed
weights for each of the four PPIs used
to create the blended PPI. These are the
same four proxies used in the 2008based RPL market basket; however, the
blended PPI weights in the 2008-based
RPL market baskets were based on 2002
Benchmark I–O data.
TABLE 10—BLENDED CHEMICAL PPI WEIGHTS
Proposed
2012-Based
IPF weights
(percent)
Name
PPI
PPI
PPI
PPI
for
for
for
for
Industrial Gas Manufacturing ..........................................................................................
Other Basic Inorganic Chemical Manufacturing .............................................................
Other Basic Organic Chemical Manufacturing ................................................................
Soap and Cleaning Compound Manufacturing ...............................................................
Professional Fees: Labor-Related
We are proposing to continue to use
the ECI for Total Compensation for
Private Industry workers in Professional
and Related (BLS series code
#CIU2010000120000I) to measure the
price growth of this category. This is the
same proxy used in the 2008-based RPL
market basket.
Rubber and Plastics
We are proposing to continue to use
the PPI for Rubber and Plastic Products
(BLS series code #WPU07) to measure
price growth of this cost category. This
is the same proxy used in the 2008based RPL market basket.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Medical Instruments
We are proposing to use a blend for
the Medical Instruments cost category.
The 2007 Benchmark Input-Output data
shows an approximate 50/50 split
between Surgical and Medical
Instruments and Medical and Surgical
Appliances and Supplies for this cost
category. Therefore, we propose a blend
composed of 50 percent of the
commodity-based PPI for Surgical and
Medical Instruments (BLS code
#WPU1562) and 50 percent of the
commodity-based PPI for Medical and
Surgical Appliances and Supplies (BLS
code #WPU1563). The 2008-based RPL
market basket uses the single, higher
level PPI for Medical, Surgical, and
Personal Aid Devices (BLS series code
#WPU156).
Installation, Maintenance, and Repair
We are proposing to use the ECI for
Total Compensation for Civilian
workers in Installation, Maintenance,
and Repair (BLS series code
#CIU1010000430000I) to measure the
price growth of this new cost category.
Previously these costs were included in
the All Other: Labor-related Services
category and were proxied by the ECI
for Total Compensation for Private
Industry workers in Service
Occupations (BLS series code
#CIU2010000300000I). We believe that
this index better reflects the price
changes of labor associated with
maintenance-related services and its
incorporation represents a technical
improvement to the market basket.
Paper and Printing Products
We are proposing to continue to use
the PPI for Converted Paper and
Paperboard Products (BLS series code
#WPU0915) to measure the price growth
of this cost category. This is the same
proxy used in the 2008-based RPL
market basket.
Miscellaneous Products
We are proposing to continue to use
the PPI for Finished Goods Less Food
and Energy (BLS series code
#WPUSOP3500) to measure the price
growth of this cost category. This is the
same proxy used in the 2008-based RPL
market basket.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
Administrative and Facilities Support
Services
We are proposing to continue to use
the ECI for Total Compensation for
Private Industry workers in Office and
Administrative Support (BLS series
code #CIU2010000220000I) to measure
the price growth of this category. This
is the same proxy used in the 2008based RPL market basket.
All Other: Labor-Related Services
We are proposing to continue to use
the ECI for Total Compensation for
Private Industry workers in Service
Occupations (BLS series code
PO 00000
Frm 00017
Fmt 4701
Sfmt 4702
2008-Based
RPL weights
(percent)
32
17
45
6
35
25
30
10
NAICS
325120
325180
325190
325610
#CIU2010000300000I) to measure the
price growth of this cost category. This
is the same proxy used in the 2008based RPL market basket.
Professional Fees: Nonlabor-Related
We are proposing to continue to use
the ECI for Total Compensation for
Private Industry workers in Professional
and Related (BLS series code
#CIU2010000120000I) to measure the
price growth of this category. This is the
same proxy used in the 2008-based RPL
market basket.
Financial Services
We are proposing to continue to use
the ECI for Total Compensation for
Private Industry workers in Financial
Activities (BLS series code
#CIU201520A000000I) to measure the
price growth of this cost category. This
is the same proxy used in the 2008based RPL market basket.
Telephone Services
We are proposing to continue to use
the CPI for Telephone Services (BLS
series code #CUUR0000SEED) to
measure the price growth of this cost
category. This is the same proxy used in
the 2008-based RPL market basket.
All Other: Nonlabor-Related Services
We are proposing to continue to use
the CPI for All Items Less Food and
Energy (BLS series code
#CUUR0000SA0L1E) to measure the
price growth of this cost category. This
is the same proxy used in the 2008based RPL market basket.
E:\FR\FM\01MYP2.SGM
01MYP2
25028
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
ii. Price Proxies for the Capital Portion
of the Proposed 2012-Based IPF Market
Basket
Capital Price Proxies Prior to Vintage
Weighting
We are proposing to apply the same
price proxies to the detailed capitalrelated cost categories as were applied
in the 2008-based RPL market basket,
which are provided in Table 12 and
described below. We are also proposing
to continue to vintage weight the capital
price proxies for Depreciation and
Interest in order to capture the longterm consumption of capital. This
vintage weighting method is similar to
the method used for the 2008-based RPL
market basket and is described below.
We are proposing to proxy the
Depreciation: Building and Fixed
Equipment cost category by BEA’s
Chained Price Index for Nonresidential
Construction for Hospitals and Special
Care Facilities (BEA Table 5.4.4. Price
Indexes for Private Fixed Investment in
Structures by Type). We are proposing
to proxy the Depreciation: Movable
Equipment cost category by the PPI for
Machinery and Equipment (BLS series
code #WPU11). We are proposing to
proxy the Nonprofit Interest cost
category by the average yield on
domestic municipal bonds (Bond Buyer
20-bond index). We are proposing to
proxy the For-profit Interest cost
category by the average yield on
Moody’s Aaa bonds (Federal Reserve).
We are proposing to proxy the Other
Capital-Related cost category by the
CPI–U for Rent of Primary Residence
(BLS series code #CUUS0000SEHA). We
believe these are the most appropriate
proxies for IPF capital-related costs that
meet our selection criteria of relevance,
timeliness, availability, and reliability.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Vintage Weights for Price Proxies
Because capital is acquired and paid
for over time, capital-related expenses
in any given year are determined by
both past and present purchases of
physical and financial capital. The
vintage-weighted capital-related portion
of the proposed 2012-based IPF market
basket is intended to capture the longterm consumption of capital, using
vintage weights for depreciation
(physical capital) and interest (financial
capital). These vintage weights reflect
the proportion of capital-related
purchases attributable to each year of
the expected life of building and fixed
equipment, movable equipment, and
interest. We are proposing to use vintage
weights to compute vintage-weighted
price changes associated with
depreciation and interest expenses.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
Capital-related costs are inherently
complicated and are determined by
complex capital-related purchasing
decisions, over time, based on such
factors as interest rates and debt
financing. In addition, capital is
depreciated over time instead of being
consumed in the same period it is
purchased. By accounting for the
vintage nature of capital, we are able to
provide an accurate and stable annual
measure of price changes. Annual nonvintage price changes for capital are
unstable due to the volatility of interest
rate changes and, therefore, do not
reflect the actual annual price changes
for IPF capital-related costs. The capitalrelated component of the proposed
2012-based IPF market basket reflects
the underlying stability of the capitalrelated acquisition process.
To calculate the vintage weights for
depreciation and interest expenses, we
first need a time series of capital-related
purchases for building and fixed
equipment and movable equipment. We
found no single source that provides an
appropriate time series of capital-related
purchases by hospitals for all of the
above components of capital purchases.
The early Medicare cost reports did not
have sufficient capital-related data to
meet this need. Data we obtained from
the American Hospital Association
(AHA) do not include annual capitalrelated purchases. However, the AHA
does provide a consistent database of
total expenses back to 1963.
Consequently, we are proposing to use
data from the AHA Panel Survey and
the AHA Annual Survey to obtain a
time series of total expenses for
hospitals. We are then proposing to use
data from the AHA Panel Survey
supplemented with the ratio of
depreciation to total hospital expenses
obtained from the Medicare cost reports
to derive a trend of annual depreciation
expenses for 1963 through 2012. We
propose to separate these depreciation
expenses into annual amounts of
building and fixed equipment
depreciation and movable equipment
depreciation as determined above. From
these annual depreciation amounts we
derive annual end-of-year book values
for building and fixed equipment and
movable equipment using the expected
life for each type of asset category.
While data are not available that are
specific to IPFs, we believe this
information for all hospitals serves as a
reasonable alternative for the pattern of
depreciation for IPFs.
To continue to calculate the vintage
weights for depreciation and interest
expenses, we also need the expected
lives for Building and Fixed Equipment,
Movable Equipment, and Interest for the
PO 00000
Frm 00018
Fmt 4701
Sfmt 4702
proposed 2012-based IPF market basket.
We are proposing to calculate the
expected lives using Medicare cost
report data from freestanding and
hospital-based IPFs. The expected life of
any asset can be determined by dividing
the value of the asset (excluding fully
depreciated assets) by its current year
depreciation amount. This calculation
yields the estimated expected life of an
asset if the rates of depreciation were to
continue at current year levels,
assuming straight-line depreciation. We
are proposing to determine the expected
life of building and fixed equipment
separately for hospital-based IPFs and
freestanding IPFs and weight these
expected lives using the percent of total
capital costs each provider type
represents. We are proposing to apply a
similar method for movable equipment.
Using these proposed methods, we
determined the average expected life of
building and fixed equipment to be
equal to 23 years, and the average
expected life of movable equipment to
be equal to 11 years. For the expected
life of interest, we believe vintage
weights for interest should represent the
average expected life of building and
fixed equipment because, based on
previous research described in the FY
1997 IPPS final rule (61 FR 46198), the
expected life of hospital debt
instruments and the expected life of
buildings and fixed equipment are
similar. We note that for the 2008-based
RPL market basket, we used FY 2008
Medicare cost reports for IPPS hospitals
to determine the expected life of
building and fixed equipment and
movable equipment (76 FR 51763). The
2008-based RPL market basket was
based on an expected average life of
building and fixed equipment of 26
years and an expected average life of
movable equipment of 11 years, which
were both calculated using data for IPPS
hospitals.
Multiplying these expected lives by
the annual depreciation amounts results
in annual year-end asset costs for
building and fixed equipment and
movable equipment. We then calculate
a time series, beginning in 1964, of
annual capital purchases by subtracting
the previous year’s asset costs from the
current year’s asset costs.
For the building and fixed equipment
and movable equipment vintage
weights, we are proposing to use the
real annual capital-related purchase
amounts for each asset type to capture
the actual amount of the physical
acquisition, net of the effect of price
inflation. These real annual capitalrelated purchase amounts are produced
by deflating the nominal annual
purchase amount by the associated price
E:\FR\FM\01MYP2.SGM
01MYP2
25029
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
proxy as provided above. For the
interest vintage weights, we are
proposing to use the total nominal
annual capital-related purchase
amounts to capture the value of the debt
instrument (including, but not limited
to, mortgages and bonds). Using these
capital-related purchase time series
specific to each asset type, we are
proposing to calculate the vintage
weights for building and fixed
equipment, for movable equipment, and
for interest.
The vintage weights for each asset
type are deemed to represent the
average purchase pattern of the asset
over its expected life (in the case of
building and fixed equipment and
interest, 23 years, and in the case of
movable equipment, 11 years). For each
asset type, we used the time series of
annual capital-related purchase
amounts available from 2012 back to
1964. These data allow us to derive
twenty-seven 23-year periods of capitalrelated purchases for building and fixed
equipment and interest, and thirty-nine
11-year periods of capital-related
purchases for movable equipment. For
each 23-year period for building and
fixed equipment and interest, or 11-year
period for movable equipment, we
calculate annual vintage weights by
dividing the capital-related purchase
amount in any given year by the total
amount of purchases over the entire 23year or 11-year period. This calculation
is done for each year in the 23-year or
11-year period and for each of the
periods for which we have data. We
then calculate the average vintage
weight for a given year of the expected
life by taking the average of these
vintage weights across the multiple
periods of data. The vintage weights for
the capital-related portion of the 2008based RPL market basket and the
proposed 2012-based IPF market basket
are presented in Table 11 below.
TABLE 11—2008-BASED RPL MARKET BASKET AND PROPOSED 2012-BASED IPF MARKET BASKET VINTAGE WEIGHTS
FOR CAPITAL-RELATED PRICE PROXIES
Building and fixed equipment
Year
2012-based
23 years
1 ...........................
2 ...........................
3 ...........................
4 ...........................
5 ...........................
6 ...........................
7 ...........................
8 ...........................
9 ...........................
10 .........................
11 .........................
12 .........................
13 .........................
14 .........................
15 .........................
16 .........................
17 .........................
18 .........................
19 .........................
20 .........................
21 .........................
22 .........................
23 .........................
24 .........................
25 .........................
26 .........................
0.029
0.031
0.034
0.036
0.037
0.039
0.040
0.041
0.042
0.044
0.045
0.045
0.045
0.046
0.046
0.048
0.049
0.050
0.051
0.051
0.051
0.050
0.052
..............................
..............................
..............................
Total ..............
1.000
2008-based
26 years
Movable equipment
Interest
2012-based
11 years
2008-based
11 years
2012-based
23 years
2008-based
26 years
0.021
0.023
0.025
0.027
0.028
0.030
0.031
0.033
0.035
0.037
0.039
0.041
0.042
0.043
0.044
0.045
0.046
0.047
0.047
0.045
0.045
0.045
0.046
0.046
0.045
0.046
0.069
0.073
0.077
0.083
0.087
0.091
0.096
0.100
0.103
0.107
0.114
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
0.071
0.075
0.080
0.083
0.085
0.089
0.092
0.098
0.103
0.109
0.116
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
0.017
0.019
0.022
0.024
0.026
0.028
0.030
0.032
0.035
0.038
0.040
0.042
0.044
0.046
0.048
0.053
0.057
0.060
0.063
0.066
0.067
0.069
0.073
..............................
..............................
..............................
0.010
0.012
0.014
0.016
0.018
0.020
0.021
0.024
0.026
0.029
0.033
0.035
0.038
0.041
0.043
0.046
0.049
0.052
0.053
0.053
0.055
0.056
0.060
0.063
0.064
0.068
1.000
1.000
1.000
1.000
1.000
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Note: Numbers may not add to total due to rounding.
The process of creating vintageweighted price proxies requires
applying the vintage weights to the
price proxy index where the last applied
vintage weight in Table 11 is applied to
the most recent data point. We have
provided on the CMS Web site an
example of how the vintage weighting
price proxies are calculated, using
example vintage weights and example
price indices. The example can be found
at the following link: https://www.cms.
gov/Research-Statistics-Data-andSystems/Statistics-Trends-and-Reports/
MedicareProgramRatesStats/Market
BasketResearch.html in the zip file
titled ‘‘Weight Calculations as described
in the IPPS FY 2010 Proposed Rule.’’
iii. Summary of Price Proxies of the
Proposed 2012-Based IPF Market Basket
Table 12 shows both the operating
and capital price proxies for the
proposed 2012-based IPF Market Basket.
TABLE 12—PRICE PROXIES FOR THE PROPOSED 2012-BASED IPF MARKET BASKET
Weight
(percent)
Cost description
Price proxies
Total ..........................................................
.......................................................................................................................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00019
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
100.0
25030
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 12—PRICE PROXIES FOR THE PROPOSED 2012-BASED IPF MARKET BASKET—Continued
Cost description
Weight
(percent)
Price proxies
Compensation ....................................
Wages and Salaries ...................
Employee Benefits .....................
Utilities ...............................................
Electricity ....................................
Fuel, Oil, and Gasoline ...............
Water & Sewerage .....................
Professional Liability Insurance .........
Malpractice .................................
All Other Products and Services .......
All Other Products .............................
Pharmaceuticals .........................
Food: Direct Purchases ..............
Food: Contract Services .............
Chemicals ...................................
Medical Instruments ...................
Rubber & Plastics .......................
Paper and Printing Products ......
Miscellaneous Products ..............
All Other Services ..............................
Labor-Related Services .....................
Professional Fees: Labor-related
Administrative
and
Facilities
Support Services.
Installation, Maintenance, and
Repair.
All Other: Labor-related Services
Nonlabor-Related Services ................
Professional Fees: Nonlabor-related.
Financial services .......................
Telephone Services ....................
All Other: Nonlabor-related Services.
Capital-Related Costs ........................
Depreciation .......................................
Fixed Assets ...............................
Movable Equipment ....................
Interest Costs ....................................
Government/Nonprofit ................
For Profit .....................................
Other Capital-Related Costs ..............
.......................................................................................................................................
Blended Wages and Salaries Price Proxy ...................................................................
Blended Benefits Price Proxy ......................................................................................
.......................................................................................................................................
PPI for Commercial Electric Power .............................................................................
Blend of the PPI for Petroleum Refineries and PPI for Natural Gas ..........................
CPI–U for Water and Sewerage Maintenance ............................................................
.......................................................................................................................................
CMS Hospital Professional Liability Insurance Premium Index ..................................
.......................................................................................................................................
.......................................................................................................................................
PPI for Pharmaceuticals for human use, prescription .................................................
PPI for Processed Foods and Feeds ..........................................................................
CPI–U for Food Away From Home ..............................................................................
Blend of Chemical PPIs ...............................................................................................
Blend of the PPI for Surgical and medical instruments and PPI for Medical and surgical appliances and supplies.
PPI for Rubber and Plastic Products ...........................................................................
PPI for Converted Paper and Paperboard Products ...................................................
PPI for Finished Goods Less Food and Energy ..........................................................
.......................................................................................................................................
.......................................................................................................................................
ECI for Total compensation for Private industry workers in Professional and related
ECI for Total compensation for Private industry workers in Office and administrative
support.
ECI for Total compensation for Civilian workers in Installation, maintenance, and repair.
ECI for Total compensation for Private industry workers in Service occupations ......
.......................................................................................................................................
ECI for Total compensation for Private industry workers in Professional and related
65.2
51.9
13.3
1.8
0.8
0.9
0.1
1.1
1.1
25.0
11.7
4.8
1.4
0.9
0.6
1.9
ECI for Total compensation for Private industry workers in Financial activities .........
CPI–U for Telephone Services ....................................................................................
CPI–U for All Items Less Food and Energy ................................................................
2.3
0.6
1.1
.......................................................................................................................................
.......................................................................................................................................
BEA chained price index for nonresidential construction for hospitals and special
care facilities—vintage weighted (23 years).
PPI for machinery and equipment—vintage weighted (11 years) ...............................
.......................................................................................................................................
Average yield on domestic municipal bonds (Bond Buyer 20 bonds)—vintage
weighted (23 years).
Average yield on Moody’s Aaa bonds—vintage weighted (23 years) .........................
CPI–U for Rent of primary residence ..........................................................................
7.0
5.2
3.7
0.5
1.0
0.7
13.3
6.7
2.9
0.7
1.6
1.5
6.6
2.6
1.5
1.2
1.0
0.2
0.6
Note: Totals may not sum to 100.0 percent due to rounding.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
4. Proposed FY 2016 Market Basket
Update
For FY 2016 (that is, beginning
October 1, 2015 and ending September
30, 2016), we are proposing to use an
estimate of the proposed 2012-based IPF
market basket increase factor to update
the IPF PPS base payment rate.
Consistent with historical practice, we
estimate the market basket update for
the IPF PPS based on IHS Global
Insight’s forecast using the most recent
available data. IHS Global Insight (IGI),
Inc. is a nationally recognized economic
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
and financial forecasting firm that
contracts with CMS to forecast the
components of the market baskets and
multifactor productivity (MFP).
Based on IGI’s first quarter 2015
forecast with historical data through the
fourth quarter of 2014, the projected
proposed 2012-based IPF market basket
increase factor for FY 2016 is 2.7
percent. Therefore, consistent with our
historical practice of estimating market
basket increases based on the best
available data, we are proposing a
market basket increase factor of 2.7
percent for FY 2016. We are also
PO 00000
Frm 00020
Fmt 4701
Sfmt 4702
proposing that if more recent data are
subsequently available (for example, a
more recent estimate of the market
basket) we would use such data, to
determine the FY 2016 update in the
final rule.
For comparison, the current 2008based RPL market basket is projected to
increase by 2.8 percent in FY 2016
based on IGI’s first quarter 2015
forecast. Table 13 compares the
proposed 2012-based IPF market basket
and the 2008-based RPL market basket
percent changes.
E:\FR\FM\01MYP2.SGM
01MYP2
25031
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 13—PROPOSED 2012-BASED IPF MARKET BASKET AND 2008-BASED RPL MARKET BASKET PERCENT CHANGES,
FY 2010 THROUGH FY 2018
Proposed
2012-Based
IPF market
basket index
percent
change
Fiscal Year (FY)
Historical data:
FY 2010 ............................................................................................................................................................
FY 2011 ............................................................................................................................................................
FY 2012 ............................................................................................................................................................
FY 2013 ............................................................................................................................................................
FY 2014 ............................................................................................................................................................
Average 2010–2014 .........................................................................................................................................
Forecast:
FY 2015 ............................................................................................................................................................
FY 2016 ............................................................................................................................................................
FY 2017 ............................................................................................................................................................
FY 2018 ............................................................................................................................................................
Average 2015–2018 .........................................................................................................................................
2008-Based
RPL market
basket index
percent
change
2.0
2.2
1.9
2.0
1.9
2.0
2.2
2.5
2.2
2.1
1.8
2.2
2.0
2.7
3.0
3.0
2.7
2.2
2.8
3.0
3.1
2.8
Note: These market basket percent changes do not include any further adjustments as may be statutorily required. Source: IHS Global Insight,
Inc. 1st quarter 2015 forecast.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
For FY 2016, the proposed 2012-based
IPF market basket update (2.7 percent)
is one tenth of a percentage point lower
than the 2008-based RPL market basket
(2.8 percent). The 0.1 percentage point
difference stems from the lower
Pharmaceuticals cost weight in the
proposed 2012-based IPF market basket
(4.8 percent) compared to the 2008based RPL market basket (6.5 percent) as
well as from the use of the blended
price proxies for the Wages and Salaries
and Employee Benefits cost categories.
5. Proposed Productivity Adjustment
Section 1886(s)(2)(A)(i) of the Act
requires the application of the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act to
the IPF PPS for the RY beginning in
2012 (that is, a RY that coincides with
a FY) and each subsequent RY. The
statute defines the productivity
adjustment to be equal to the 10-year
moving average of changes in annual
economy-wide private nonfarm business
multifactor productivity (MFP) (as
projected by the Secretary for the 10year period ending with the applicable
FY, year, cost reporting period, or other
annual period) (the ‘‘MFP adjustment’’).
The Bureau of Labor Statistics (BLS)
publishes the official measure of private
non-farm business MFP. We refer
readers to the BLS Web site at https://
www.bls.gov/mfp for the BLS historical
published MFP data.
MFP is derived by subtracting the
contribution of labor and capital inputs
growth from output growth. The
projections of the components of MFP
are currently produced by IGI, a
nationally recognized economic
forecasting firm with which CMS
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
contracts to forecast the components of
the market baskets and MFP. As
described in the FY 2012 IPPS/LTCH
final rule (76 FR 51690 through 51692),
in order to generate a forecast of MFP,
IGI replicated the MFP measure
calculated by the BLS using a series of
proxy variables derived from IGI’s U.S.
macroeconomic models. In the FY 2012
rule, we identified each of the major
MFP component series employed by the
BLS to measure MFP as well as
provided the corresponding concepts
determined to be the best available
proxies for the BLS series.
Beginning with the FY 2016
rulemaking cycle, the MFP adjustment
is calculated using a revised series
developed by IGI to proxy the aggregate
capital inputs. Specifically, IGI has
replaced the Real Effective Capital Stock
used for Full Employment GDP with a
forecast of BLS aggregate capital inputs
recently developed by IGI using a
regression model. This series provides a
better fit to the BLS capital inputs, as
measured by the differences between
the actual BLS capital input growth
rates and the estimated model growth
rates over the historical time period.
Therefore, we are using IGI’s most
recent forecast of the BLS capital inputs
series in the MFP calculations beginning
with the FY 2016 rulemaking cycle. A
complete description of the MFP
projection methodology is available on
our Web site at https://www.cms.gov/
Research-Statistics-Data-and-Systems/
Statistics-Trends-and-Reports/Medicare
ProgramRatesStats/MarketBasket
Research.html. Although we discuss the
IGI changes to the MFP proxy series in
this proposed rule, in the future, when
IGI makes changes to the MFP
PO 00000
Frm 00021
Fmt 4701
Sfmt 4702
methodology, we will announce them
on our Web site rather than in the
annual rulemaking.
Using IGI’s first quarter 2015 forecast,
the MFP adjustment for FY 2016 (the
10-year moving average of MFP for the
period ending FY 2016) is projected to
be 0.6 percent. Thus, in accordance with
section 1886(s)(2)(A)(i) of the Act, we
propose to base the FY 2016 market
basket update, which is used to
determine the applicable percentage
increase for the IPF payments, on the
most recent estimate of the proposed
2012-based IPF market basket (currently
estimated to be 2.7 percent based on
IGI’s first quarter 2015 forecast). We
propose to then reduce this percentage
increase by the current estimate of the
MFP adjustment for FY 2016 of 0.6
percentage point (the 10-year moving
average of MFP for the period ending FY
2016 based on IGI’s first quarter 2015
forecast). Furthermore, we also propose
that if more recent data are subsequently
available (for example, a more recent
estimate of the market basket and MFP
adjustment), we would use such data to
determine the FY 2016 market basket
update and MFP adjustment in the final
rule.
Section 1886(s)(2)(A)(ii) of the Act
requires the application of an ‘‘other
adjustment’’ that reduces any update to
an IPF PPS base rate by percentages
specified in section 1886(s)(3) of the Act
for the RY beginning in 2010 through
the RY beginning in 2019. For the RY
beginning in 2015 (that is, FY 2016),
section 1886(s)(3)(D) of the Act requires
the reduction to be 0.2 percentage point.
We are proposing to implement the
productivity adjustment and ‘other
adjustment’ in this FY 2016 IPF PPS
E:\FR\FM\01MYP2.SGM
01MYP2
25032
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
proposed rule. We invite public
comment on these proposals.
6. Proposed Labor-Related Share
Due to variations in geographic wage
levels and other labor-related costs, we
believe that payment rates under the IPF
PPS should continue to be adjusted by
a geographic wage index, which would
apply to the labor-related portion of the
Federal per diem base rate (hereafter
referred to as the labor-related share).
The labor-related share is determined by
identifying the national average
proportion of total costs that are related
to, influenced by, or vary with the local
labor market. We continue to classify a
cost category as labor-related if the costs
are labor-intensive and vary with the
local labor market. As stated in the FY
2015 IPF PPS final rule (79 FR 45943),
the labor-related share was defined as
the sum of the relative importance of
Wages and Salaries, Employee Benefits,
Professional Fees: Labor- Related
Services, Administrative and Facilities
Support Services, All Other: Laborrelated Services, and a portion of the
Capital Costs from the 2008-based RPL
market basket.
Based on our definition of the laborrelated share and the cost categories in
the proposed 2012-based IPF market
basket, we are proposing to include in
the labor-related share the sum of the
relative importance of Wages and
Salaries, Employee Benefits,
Professional Fees: Labor- Related,
Administrative and Facilities Support
Services, Installation, Maintenance, and
Repair, All Other: Labor-related
Services, and a portion of the CapitalRelated cost weight from the proposed
2012-based IPF market basket. As noted
in Section III.A.3.b.i of this proposed
rule, for the proposed 2012-based IPF
market basket, we have created a
separate cost category for Installation,
Maintenance and Repair services. These
expenses were previously included in
the ‘‘All Other’’ Labor-related Services
cost category in the 2008-based RPL
market basket, along with other services,
including but not limited to janitorial,
waste management, security, and dry
cleaning/laundry services. Because
these services tend to be labor-intensive
and are mostly performed at the facility
(and, therefore, unlikely to be purchased
in the national market), we continue to
believe that they meet our definition of
labor-related services.
Similar to the 2008-based RPL market
basket, the proposed 2012-based IPF
market basket includes 2 cost categories
for nonmedical Professional fees
(including but not limited to, expenses
for legal, accounting, and engineering
services). These are Professional Fees:
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
Labor-related and Professional Fees:
Nonlabor-related. For the proposed
2012-based IPF market basket, we
propose to estimate the labor-related
percentage of non-medical professional
fees (and assign these expenses to the
Professional Fees: Labor-related services
cost category) based on the same
method that was used to determine the
labor-related percentage of professional
fees in the 2008-based RPL market
basket.
To summarize, the professional
services survey found that hospitals
purchase the following proportion of
these four services outside of their local
labor market:
• 34 percent of accounting and
auditing services.
• 30 percent of engineering services.
• 33 percent of legal services.
• 42 percent of management
consulting services.
We applied each of these percentages
to the respective Benchmark I–O cost
category underlying the professional
fees cost category to determine the
Professional Fees: Nonlabor-related
costs. The Professional Fees: Laborrelated costs were determined to be the
difference between the total costs for
each Benchmark I–O category and the
Professional Fees: Nonlabor-related
costs. This is the same methodology that
we used to separate the 2008-based RPL
market basket professional fees category
into Professional Fees: Labor-related
and Professional Fees: Nonlabor-related
cost categories. For more detail
regarding this methodology see the FY
2012 IPF final rule (76 FR 26445).
In addition to the professional
services listed above, we also classified
expenses under NAICS 55, Management
of Companies and Enterprises, into the
Professional Fees cost category as was
done in the 2008-based RPL market
basket. The NAICS 55 data are mostly
comprised of corporate, subsidiary, and
regional managing offices, or otherwise
referred to as home offices. Since many
facilities are not located in the same
geographic area as their home office, we
analyzed data from a variety of sources
in order to determine what proportion
of these costs should be appropriately
included in the labor-related share. For
the 2012-based IPF market basket, we
are proposing to derive the home office
percentages using data for both
freestanding IPF providers and hospitalbased IPF providers. In the 2008-based
RPL market basket, we used the home
office percentages based on the data
reported by freestanding IRFs, IPFs, and
LTCHs. Using data primarily from the
Medicare cost reports and the Home
Office Medicare Records (HOMER)
database that provides the address
PO 00000
Frm 00022
Fmt 4701
Sfmt 4702
(including city and state) for home
offices, we were able to determine that
36 percent of the total number of
freestanding and hospital-based IPFs
that had home offices had those home
offices located in their respective local
labor markets—defined as being in the
same Metropolitan Statistical Area
(MSA).
The Medicare cost report requires
hospitals to report their home office
provider numbers. Using the HOMER
database to determine the home office
location for each home office provider
number, we compared the location of
the provider with the location of the
hospital’s home office. We then placed
providers into one of the following 2
groups:
• Group 1—Provider and home office
are located in different MSAs.
• Group 2—Provider and home office
are located in the same MSA.
We found that 64 percent of the
providers with home offices were
classified into Group 1 (that is, different
MSA) and, thus, these providers were
determined to not be located in the
same local labor market as their home
office. We found that 36 percent of all
providers with home offices were
classified into Group 2 (that is, the same
MSA). Given these results, we are
proposing to classify 36 percent of the
Professional Fees costs into the
Professional Fees: Labor-related cost
category and the remaining 64 percent
into the Professional Fees: Nonlaborrelated Services cost category. This
methodology for apportioning the
Professional Fee expenses between
labor-related and nonlabor-related
categories is similar to the method used
in the 2008-based RPL market basket
(see 76 FR 26445).
Using this proposed method and the
IHS Global Insight, Inc. 4th quarter 2014
forecast for the proposed 2012-based IPF
market basket, the proposed IPF laborrelated share for FY 2016 is the sum of
the FY 2016 relative importance of each
labor-related cost category. The relative
importance reflects the different rates of
price change for these cost categories
between the base year (FY 2012) and FY
2016. Table 14 shows the proposed FY
2016 labor-related share using the
proposed 2012-based IPF market basket
relative importance and the FY 2015
labor-related share using the 2008-based
RPL market basket.
The sum of the relative importance for
FY 2016 operating costs (Wages and
Salaries, Employee Benefits,
Professional Fees: Labor-related,
Administrative and Facilities Support
Services, Installation Maintenance &
Repair Services, and All Other: Laborrelated Services) is 71.8 percent, as
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
shown in Table 14. We are proposing to
specify the labor-related share to one
decimal place, which is consistent with
the IPPS labor-related share (currently
the Labor-related share from the RPL
market basket is specified to 3 decimal
places).
We are proposing that the portion of
Capital that is influenced by the local
labor market is estimated to be 46
percent, which is the same percentage
applied to the 2008-based RPL market
basket. Since the relative importance for
Capital-Related Costs is 6.8 percent of
the proposed 2012-based IPF market
basket in FY 2016, we are proposing to
take 46 percent of 6.8 percent to
determine the proposed labor-related
share of Capital for 2016. The result
would be 3.1 percent, which we propose
to add to 71.8 percent for the operating
cost amount to determine the total
proposed labor-related share for FY
2016.
The FY 2016 labor-related share using
the proposed 2012-based IPF market
basket is about five percentage points
higher than the FY 2015 labor-related
share using the 2008-based RPL market
basket. Of the five percentage point
difference, 3 percentage points is
attributable to the higher Wages and
Salaries and Employee Benefits cost
weights in the 2012-based IPF market
25033
basket compared to the 2008-based RPL
market basket, while 2 percentage
points is attributable to the higher
weight associated with the labor-related
services cost categories. We would note
that the higher Wages and Salaries cost
weight in the 2012-based IPF market
basket relative to the 2008-based RPL
market basket is the result of
freestanding IPFs having a larger
percentage of costs attributable to labor
than freestanding IRFs and Long-term
care hospitals. These latter facilities
were included in the 2008-based RPL
market basket.
TABLE 14—PROPOSED 2016 IPF LABOR-RELATED SHARE
FY 2016 laborrelated share
based on
proposed 2012based IPF
market basket 1
FY 2015
final laborrelated share 2
Wages and Salaries ....................................................................................................................................
Employee Benefits .......................................................................................................................................
Professional Fees: Labor-related ................................................................................................................
Administrative and Facilities Support Services ...........................................................................................
Installation, Maintenance and Repair ..........................................................................................................
All Other: Labor-related Services ................................................................................................................
51.7
13.4
2.9
0.7
1.6
1.5
48.271
12.936
2.058
0.415
..............................
2.061
Subtotal .................................................................................................................................................
Labor-related portion of capital (46%) .........................................................................................................
71.8
3.1
65.741
3.553
Total LRS ......................................................................................................................................
74.9
69.294
1 IHS
Global Insight, Inc. 4th quarter 2014 forecast.
Register 79–FR–45943.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
2 Federal
In weighing the effects of the change
in the LRS, we considered whether to
recommend a 2-year transitional
implementation of the increase in the
LRS. We recognize that IPFs with wage
index values of less than one would be
adversely affected by an increased LRS,
as a larger share of the base rate would
be adjusted by the wage index value.
About 69 percent of IPFs would have
wage index values of less than one using
FY2015 CBSA data, and 30 percent of
these providers are rural. While the LRS
would be updated in a budget neutral
fashion so that the overall impact on
payments is zero, there would still be
distributional effects on specific
categories of IPFs. We considered the
distributional effects of the multiple
proposals made in this proposed rule,
including the proposal to update the full
LRS in FY 2016, and we found that the
negative impact of updating the LRS in
a single year, without a transition, was
relatively small, as shown in Table 26
in section VII. of this proposed rule.
Additionally, we are proposing 2 other
adjustments to benefit providers: A
transitional wage index and a phase-out
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
of the 17 percent rural adjustment for
the 37 IPFs that would change from
rural to urban status due to the new
CBSA delineations. As presented in
section III.A.6. of this proposed rule, we
are proposing to use the 2012-based IPF
market basket relative importance’s to
determine the FY 2016 IPF LRS. We
believe this is technically appropriate as
it is based on more recent, providerspecific data for IPFs. For all of these
reasons, we propose to implement the
full LRS in FY 2016, but solicit
comments on this issue.
B. Proposed Updates to the IPF PPS for
FY 2016 (Beginning October 1, 2015)
The IPF PPS is based on a
standardized Federal per diem base rate
calculated from the IPF average per
diem costs and adjusted for budgetneutrality in the implementation year.
The Federal per diem base rate is used
as the standard payment per day under
the IPF PPS and is adjusted by the
patient-level and facility-level
adjustments that are applicable to the
IPF stay. A detailed explanation of how
we calculated the average per diem cost
PO 00000
Frm 00023
Fmt 4701
Sfmt 4702
appears in the November 2004 IPF PPS
final rule (69 FR 66926).
1. Determining the Standardized
Budget-Neutral Federal Per Diem Base
Rate
Section 124(a)(1) of the BBRA
required that we implement the IPF PPS
in a budget-neutral manner. In other
words, the amount of total payments
under the IPF PPS, including any
payment adjustments, must be projected
to be equal to the amount of total
payments that would have been made if
the IPF PPS were not implemented.
Therefore, we calculated the budgetneutrality factor by setting the total
estimated IPF PPS payments to be equal
to the total estimated payments that
would have been made under the Tax
Equity and Fiscal Responsibility Act of
1982 (TEFRA) (Pub. L. 97–248)
methodology had the IPF PPS not been
implemented. A step-by-step
description of the methodology used to
estimate payments under the TEFRA
payment system appears in the
November 2004 IPF PPS final rule (69
FR 66926).
E:\FR\FM\01MYP2.SGM
01MYP2
25034
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Under the IPF PPS methodology, we
calculated the final Federal per diem
base rate to be budget-neutral during the
IPF PPS implementation period (that is,
the 18-month period from January 1,
2005 through June 30, 2006) using a July
1 update cycle. We updated the average
cost per day to the midpoint of the IPF
PPS implementation period (that is,
October 1, 2005), and this amount was
used in the payment model to establish
the budget-neutrality adjustment.
Next, we standardized the IPF PPS
Federal per diem base rate to account
for the overall positive effects of the IPF
PPS payment adjustment factors by
dividing total estimated payments under
the TEFRA payment system by
estimated payments under the IPF PPS.
Additional information concerning this
standardization can be found in the
November 2004 IPF PPS final rule (69
FR 66932) and the RY 2006 IPF PPS
final rule (71 FR 27045). We then
reduced the standardized Federal per
diem base rate to account for the outlier
policy, the stop loss provision, and
anticipated behavioral changes. A
complete discussion of how we
calculated each component of the
budget-neutrality adjustment appears in
the November 2004 IPF PPS final rule
(69 FR 66932 through 66933) and in the
May 2006 IPF PPS final rule (71 FR
27044 through 27046). The final
standardized budget-neutral Federal per
diem base rate established for cost
reporting periods beginning on or after
January 1, 2005 was calculated to be
$575.95.
The Federal per diem base rate has
been updated in accordance with
applicable statutory requirements and
§ 412.428 through publication of annual
notices or proposed and final rules. A
detailed discussion on the standardized
budget-neutral Federal per diem base
rate and the electroconvulsive therapy
(ECT) rate appears in the August 2013
IPF PPS update notice (78 FR 46738
through 46739). These documents are
available on the CMS Web site at https://
www.cms.hhs.gov/InpatientPsych
FacilPPS/.
2. Proposed FY 2016 Update of the
Federal Per Diem Base Rate and
Electroconvulsive Therapy (ECT) Rate
The current (that is, FY 2015) Federal
per diem base rate is $728.31 and the
ECT rate is $313.55. For FY 2016, we are
proposing to apply an update of 1.9
percent (that is, the proposed FY 2012based IPF-specific market basket
increase for FY 2016 of 2.7 percent less
the proposed productivity adjustment of
0.6 percentage point, and further
reduced by the 0.2 percentage point
required under section1886(s)(3)(D) of
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
the Act), and the wage index budgetneutrality factor of 1.0041 (as discussed
in section III.D.1.e. of this proposed
rule) to the FY 2015 Federal per diem
base rate of $728.31, yielding a
proposed Federal per diem base rate of
$745.19 for FY 2016. Similarly, we are
proposing to apply the 1.9 percent
payment update and the 1.0041 wage
index budget-neutrality factor to the FY
2015 ECT rate, yielding a proposed ECT
rate of $320.82 for FY 2016.
As noted above, section 1886(s)(4) of
the Act requires the establishment of a
quality data reporting program for the
IPF PPS beginning in RY 2015. We refer
readers to section V. of this proposed
rule for a discussion of the IPF Quality
Reporting Program. Section
1886(s)(4)(A)(i) of the Act requires that,
for RY 2014 and each subsequent rate
year, the Secretary shall reduce any
annual update to a standard Federal rate
for discharges occurring during the rate
year by 2.0 percentage points for any
IPF that does not comply with the
quality data submission requirements
with respect to an applicable year.
Therefore, we are proposing to apply a
2.0 percentage point reduction to the
Federal per diem base rate and the ECT
rate as follows:
For IPFs that failed to submit quality
reporting data under the IPFQR
program, we would apply a ¥0.1
percent annual update (that is, 1.9
percent reduced by 2 percentage points,
in accordance with section
1886(s)(4)(A)(ii) of the Act) and the
wage index budget-neutrality factor of
1.0041 to the FY 2015 Federal per diem
base rate of $728.31, yielding a Federal
per diem base rate of $730.56 for FY
2016.
Similarly, we would apply the ¥0.1
percent annual update and the 1.0041
wage index budget-neutrality factor to
the FY 2015 ECT rate of $313.55,
yielding an ECT rate of $314.52 for FY
2016.
C. Proposed Updates to the IPF PPS
Patient-Level Adjustment Factors
1. Overview of the IPF PPS Adjustment
Factors
The IPF PPS payment adjustments
were derived from a regression analysis
of 100 percent of the FY 2002 MedPAR
data file, which contained 483,038
cases. For a more detailed description of
the data file used for the regression
analysis, see the November 2004 IPF
PPS final rule (69 FR 66935 through
66936). While we have since used more
recent claims data to simulate payments
to set the fixed dollar loss threshold
amount for the outlier policy and to
assess the impact of the IPF PPS
PO 00000
Frm 00024
Fmt 4701
Sfmt 4702
updates, we continue to use the
regression-derived adjustment factors
established in 2005 for FY 2016.
2. IPF PPS Patient-Level Adjustments
The IPF PPS includes payment
adjustments for the following patientlevel characteristics: Medicare Severity
Diagnosis Related Groups (MS–DRGs)
assignment of the patient’s principal
diagnosis, selected comorbidities,
patient age, and the variable per diem
adjustments.
a. MS–DRG Assignment
We believe it is important to maintain
the same diagnostic coding and DRG
classification for IPFs that are used
under the IPPS for providing psychiatric
care. For this reason, when the IPF PPS
was implemented for cost reporting
periods beginning on or after January 1,
2005, we adopted the same diagnostic
code set (ICD–9–CM) and DRG patient
classification system (that is, the CMS
DRGs) that were utilized at the time
under the IPPS. In the May 2008 IPF
PPS notice (73 FR 25709), we discussed
CMS’s effort to better recognize resource
use and the severity of illness among
patients. CMS adopted the new MS–
DRGs for the IPPS in the FY 2008 IPPS
final rule with comment period (72 FR
47130). In the 2008 IPF PPS notice (73
FR 25716), we provided a crosswalk to
reflect changes that were made under
the IPF PPS to adopt the new MS–DRGs.
For a detailed description of the
mapping changes from the original DRG
adjustment categories to the current
MS–DRG adjustment categories, we
refer readers to the May 2008 IPF PPS
notice (73 FR 25714).
The IPF PPS includes payment
adjustments for designated psychiatric
DRGs assigned to the claim based on the
patient’s principal diagnosis. The DRG
adjustment factors were expressed
relative to the most frequently reported
psychiatric DRG in FY 2002, that is,
DRG 430 (psychoses). The coefficient
values and adjustment factors were
derived from the regression analysis.
Mapping the DRGs to the MS–DRGs
resulted in the current 17 IPF–MS–
DRGs, instead of the original 15 DRGs,
for which the IPF PPS provides an
adjustment.
For the FY 2016 update, we are not
proposing any changes to the IPF MS–
DRG adjustment factors. In FY 2015
rulemaking (79 FR 45945 through
45947), we proposed and finalized
conversions of the ICD–9–CM-based
MS–DRGs to ICD–10–CM/PCS-based
MS–DRGs, which will be implemented
on October 1, 2015. Further information
for the ICD–10–CM/PCS MS–DRG
conversion project can be found on the
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
CMS ICD–10–CM Web site at https://
www.cms.hhs.gov/Medicare/Coding/
ICD10/ICD-10-MS-DRG-ConversionProject.html.
For FY 2016, we propose to continue
to make a payment adjustment for
psychiatric diagnoses that group to one
of the existing 17 MS–IPF–DRGs listed
in the Addendum. Psychiatric principal
diagnoses that do not group to one of
the 17 designated DRGs would still
receive the Federal per diem base rate
and all other applicable adjustments,
but the payment would not include a
DRG adjustment.
As noted above, the diagnoses for
each IPF MS–DRG will be updated on
October 1, 2015, using the ICD–10–CM/
PCS code sets.
b. Payment for Comorbid Conditions
The intent of the comorbidity
adjustments is to recognize the
increased costs associated with
comorbid conditions by providing
additional payments for certain
concurrent medical or psychiatric
conditions that are expensive to treat. In
the May 2011 IPF PPS final rule (76 FR
26451 through 26452), we explained
that the IPF PPS includes 17
comorbidity categories and identified
the new, revised, and deleted ICD–9–
CM diagnosis codes that generate a
comorbid condition payment
adjustment under the IPF PPS for RY
2012 (76 FR 26451).
Comorbidities are specific patient
conditions that are secondary to the
patient’s principal diagnosis and that
require treatment during the stay.
Diagnoses that relate to an earlier
episode of care and have no bearing on
the current hospital stay are excluded
and must not be reported on IPF claims.
Comorbid conditions must exist at the
time of admission or develop
subsequently, and affect the treatment
received, length of stay (LOS), or both
treatment and LOS.
For each claim, an IPF may receive
only one comorbidity adjustment within
a comorbidity category, but it may
receive an adjustment for more than one
comorbidity category. Current billing
instructions for claims for discharges on
or after October 1, 2015 require IPFs to
enter the complete ICD–10–CM codes
for up to 24 additional diagnoses if they
co-exist at the time of admission, or
develop subsequently and impact the
treatment provided.
The comorbidity adjustments were
determined based on the regression
analysis using the diagnoses reported by
IPFs in FY 2002. The principal
diagnoses were used to establish the
DRG adjustments and were not
accounted for in establishing the
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
25035
comorbidity category adjustments,
except where ICD–9–CM ‘‘code first’’
instructions apply. As we explained in
the May 2011 IPF PPS final rule (76 FR
265451), the ‘‘code first’’ rule applies
when a condition has both an
underlying etiology and a manifestation
due to the underlying etiology. For these
conditions, ICD–9–CM has a coding
convention that requires the underlying
conditions to be sequenced first
followed by the manifestation.
Whenever a combination exists, there is
a ‘‘use additional code’’ note at the
etiology code and a ‘‘code first’’ note at
the manifestation code.
The same principle holds for ICD–10–
CM as for ICD–9–CM. Whenever a
combination exists, there is a ‘‘use
additional code’’ note in the ICD–10–
CM codebook pertaining to the etiology
code, and a ‘‘code first’’ code pertaining
to the manifestation code. In the FY
2015 IPF PPS final rule, we provided a
‘‘code first’’ table for reference that
highlights the same or similar
manifestation codes where the ‘‘code
first’’ instructions apply in ICD–10–CM
that were present in ICD–9–CM (79 FR
46009).
As noted previously, it is our policy
to maintain the same diagnostic coding
set for IPFs that is used under the IPPS
for providing the same psychiatric care.
The 17 comorbidity categories formerly
defined using ICD–9–CM codes were
converted to ICD–10–CM/PCS in the FY
2015 IPF PPS final rule (79 FR 45947 to
45955). The goal for converting the
comorbidity categories is referred to as
replication, meaning that the payment
adjustment for a given patient encounter
is the same after ICD–10–CM
implementation as it would be if the
same record had been coded in ICD–9–
CM and submitted prior to ICD–10–CM/
PCS implementation on October 1,
2015. All conversion efforts were made
with the intent of achieving this goal.
We are not proposing any refinements
to the comorbidity adjustments at this
time, and propose to continue to use the
existing adjustments in effect in FY
2015. The FY 2016 comorbidity
adjustments are found in the Addendum
to this proposed rule.
successive age group, and the
differences are statistically significant.
For FY 2016, we are proposing to
continue to use the patient age
adjustments currently in effect in FY
2015, as shown in the Addendum to this
proposed rule.
3. Patient Age Adjustments
a. Background
As discussed in the May 2006 IPF PPS
final rule (71 FR 27061) and in the May
2008 (73 FR 25719) and May 2009 IPF
PPS notices (74 FR 20373), in order to
provide an adjustment for geographic
wage levels, the labor-related portion of
an IPF’s payment is adjusted using an
appropriate wage index. Currently, an
IPF’s geographic wage index value is
determined based on the actual location
As explained in the November 2004
IPF PPS final rule (69 FR 66922), we
analyzed the impact of age on per diem
cost by examining the age variable (that
is, the range of ages) for payment
adjustments. In general, we found that
the cost per day increases with age. The
older age groups are more costly than
the under 45 age group, the differences
in per diem cost increase for each
PO 00000
Frm 00025
Fmt 4701
Sfmt 4702
4. Variable Per Diem Adjustments
We explained in the November 2004
IPF PPS final rule (69 FR 66946) that the
regression analysis indicated that per
diem cost declines as the LOS increases.
The variable per diem adjustments to
the Federal per diem base rate account
for ancillary and administrative costs
that occur disproportionately in the first
days after admission to an IPF.
We used a regression analysis to
estimate the average differences in per
diem cost among stays of different
lengths. As a result of this analysis, we
established variable per diem
adjustments that begin on day 1 and
decline gradually until day 21 of a
patient’s stay. For day 22 and thereafter,
the variable per diem adjustment
remains the same each day for the
remainder of the stay. However, the
adjustment applied to day 1 depends
upon whether the IPF has a qualifying
emergency department (ED). If an IPF
has a qualifying ED, it receives a 1.31
adjustment factor for day 1 of each stay.
If an IPF does not have a qualifying ED,
it receives a 1.19 adjustment factor for
day 1 of the stay. The ED adjustment is
explained in more detail in section
III.D.4. of this proposed rule.
For FY 2016, we propose to continue
to use the variable per diem adjustment
factors currently in effect as shown in
the Addendum to this proposed rule. A
complete discussion of the variable per
diem adjustments appears in the
November 2004 IPF PPS final rule (69
FR 66946).
D. Proposed Updates to the IPF PPS
Facility-Level Adjustments
The IPF PPS includes facility-level
adjustments for the wage index, IPFs
located in rural areas, teaching IPFs,
cost of living adjustments for IPFs
located in Alaska and Hawaii, and IPFs
with a qualifying ED.
1. Proposed Wage Index Adjustment
E:\FR\FM\01MYP2.SGM
01MYP2
25036
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
of the IPF in an urban or rural area as
defined in § 412.64(b)(1)(ii)(A) and (C).
b. Proposed Wage Index for FY 2016
Since the inception of the IPF PPS, we
have used the pre-floor, pre-reclassified
acute care hospital wage index in
developing a wage index to be applied
to IPFs because there is not an IPFspecific wage index available. We
believe that IPFs generally compete in
the same labor markets as acute care
hospitals, so the pre-floor, prereclassified hospital wage index should
reflect IPF labor costs. As discussed in
the May 2006 IPF PPS final rule for FY
2007 (71 FR 27061 through 27067),
under the IPF PPS, the wage index is
calculated using the IPPS wage index
for the labor market area in which the
IPF is located, without taking into
account geographic reclassifications,
floors, and other adjustments made to
the wage index under the IPPS. For a
complete description of these IPPS wage
index adjustments, please see the CY
2013 IPPS/LTCH PPS final rule (77 FR
53365 through 53374). For FY 2016, we
are proposing to continue to apply the
most recent hospital wage index (that is,
the FY 2015 pre-floor, pre-reclassified
hospital wage index, which is the most
appropriate index as it best reflects the
variation in local labor costs of IPFs in
the various geographic areas) using the
most recent hospital wage data (that is,
data from hospital cost reports for the
cost reporting period beginning during
FY 2011) without any geographic
reclassifications, floors, or other
adjustments. We propose to apply the
FY 2016 IPF PPS wage index to
payments beginning October 1, 2015.
We apply the wage index adjustment
to the labor-related portion of the
Federal rate, which we are proposing to
change from 69.294 percent to 74.9
percent in FY 2016. This percentage
reflects the labor-related relative
importance of the FY 2012-based
proposed IPF-specific market basket for
FY 2016 (see section III.A.6. of this
proposed rule).
c. OMB Bulletins and Proposed
Transitional Wage Index
OMB publishes bulletins regarding
CBSA changes, including changes to
CBSA numbers and titles. In the May
2006 IPF PPS final rule for RY 2007 (71
FR 27061 through 27067), we adopted
the changes discussed in the Office of
Management and Budget (OMB)
Bulletin No. 03–04 (June 6, 2003),
which announced revised definitions
for Metropolitan Statistical Areas
(MSAs), and the creation of
Micropolitan Statistical Areas and
Combined Statistical Areas. In adopting
the OMB CBSA geographic designations
in RY 2007, we did not provide a
separate transition for the CBSA-based
wage index since the IPF PPS was
already in a transition period from
TEFRA payments to PPS payments.
In the May 2008 IPF PPS notice, we
incorporated the CBSA nomenclature
changes published in the most recent
OMB bulletin that applies to the
hospital wage index used to determine
the current IPF PPS wage index and
stated that we expect to continue to do
the same for all the OMB CBSA
nomenclature changes in future IPF PPS
rules and notices, as necessary (73 FR
25721). The OMB bulletins may be
accessed online at https://www.white
house.gov/omb/bulletins_default/.
In accordance with our established
methodology, we have historically
adopted any CBSA changes that are
published in the OMB bulletin that
corresponds with the hospital wage
index used to determine the IPF PPS
wage index. For the FY 2015 IPF wage
index, we used the FY 2014 pre-floor,
pre-reclassified hospital wage index to
adjust the IPF PPS payments. On
February 28, 2013, OMB issued OMB
Bulletin No. 13–01, which established
revised delineations for Metropolitan
Statistical Areas, Micropolitan
Statistical Areas, and Combined
Statistical Areas, and provided guidance
on the use of the delineations of these
statistical areas. A copy of this bulletin
may be obtained at https://www.
whitehouse.gov/omb/bulletins_default/.
Because the FY 2014 pre-floor, pre-
reclassified hospital wage index was
finalized prior to the issuance of this
Bulletin, the FY 2015 IPF PPS wage
index, which was based on the FY 2014
pre-floor, pre-reclassified hospital wage
index, did not reflect OMB’s new area
delineations based on the 2010 Census.
According to OMB, ‘‘[t]his bulletin
provides the delineations of all
Metropolitan Statistical Areas,
Metropolitan Divisions, Micropolitan
Statistical Areas, Combined Statistical
Areas, and New England City and Town
Areas in the United States and Puerto
Rico based on the standards published
on June 28, 2010, in the Federal
Register (75 FR 37246 through 37252)
and Census Bureau data.’’ These OMB
Bulletin changes are reflected in the FY
2015 pre-floor, pre-reclassified hospital
wage index, upon which the FY 2016
IPPS PPS wage index is based. We
propose to adopt these new OMB CBSA
delineations in the FY 2016 proposed
IPF PPS wage index.
We believe that the most current
CBSA delineations accurately reflect the
local economies and wage levels of the
areas where IPFs are located, and we
believe that it is important for the IPF
PPS to use the latest CBSA delineations
available in order to maintain an up-todate payment system that accurately
reflects the reality of population shifts
and labor market conditions.
In proposing adoption of these
changes for the IPF PPS, it is necessary
to identify the new labor market area
delineation for each county and facility
in the country. For example, there
would be new CBSAs, urban counties
that would become rural, rural counties
that would become urban, and existing
CBSAs that would be split apart.
Because the wage index of urban areas
is typically higher than that of rural
areas, IPF facilities currently located in
rural counties that would become urban,
beginning October 1, 2015, would
generally experience an increase in their
wage index values. We identified 105
counties and 37 IPFs that would move
from rural to urban status due to the
new CBSA delineations beginning in FY
2016, shown in Table 15.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
TABLE 15—FY 2016 RURAL TO URBAN CBSA CROSSWALK
FY 2014 CBSA Delineations/FY 2015
data
FY 2015 CBSA Delineations/FY 2015
data
County name
Urban/
Rural
CBSA
Baldwin County, Alabama .....................................
Pickens County, Alabama .....................................
Cochise County, Arizona .......................................
Little River County, Arkansas ................................
Windham County, Connecticut ..............................
Sussex County, Delaware .....................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
1
1
3
4
7
8
Frm 00026
Wage index
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
0.6963
0.6963
0.9125
0.7311
1.1251
1.0261
Fmt 4701
Sfmt 4702
CBSA
19300
46220
43420
45500
49340
41540
E:\FR\FM\01MYP2.SGM
Urban/
Rural
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
0.7248
0.8337
0.8937
0.7362
1.1493
0.9289
01MYP2
Change in
value
(percent)
4.09
19.73
¥2.06
0.70
2.15
¥9.47
25037
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 15—FY 2016 RURAL TO URBAN CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015
data
FY 2015 CBSA Delineations/FY 2015
data
County name
Urban/
Rural
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
CBSA
Citrus County, Florida ...........................................
Gulf County, Florida ..............................................
Highlands County, Florida .....................................
Sumter County, Florida .........................................
Walton County, Florida ..........................................
Lincoln County, Georgia ........................................
Morgan County, Georgia .......................................
Peach County, Georgia .........................................
Pulaski County, Georgia .......................................
Kalawao County, Hawaii .......................................
Maui County, Hawaii .............................................
Butte County, Idaho ..............................................
De Witt County, Illinois ..........................................
Jackson County, Illinois .........................................
Williamson County, Illinois ....................................
Scott County, Indiana ............................................
Union County, Indiana ...........................................
Plymouth County, Iowa .........................................
Kingman County, Kansas ......................................
Allen County, Kentucky .........................................
Butler County, Kentucky ........................................
Acadia Parish, Louisiana .......................................
Iberia Parish, Louisiana .........................................
St. James Parish, Louisiana .................................
Tangipahoa Parish, Louisiana ...............................
Vermilion Parish, Louisiana ...................................
Webster Parish, Louisiana ....................................
St. Marys County, Maryland ..................................
Worcester County, Maryland .................................
Midland County, Michigan .....................................
Montcalm County, Michigan ..................................
Fillmore County, Minnesota ..................................
Le Sueur County, Minnesota ................................
Mille Lacs County, Minnesota ...............................
Sibley County, Minnesota .....................................
Benton County, Mississippi ...................................
Yazoo County, Mississippi ....................................
Golden Valley County, Montana ...........................
Hall County, Nebraska ..........................................
Hamilton County, Nebraska ..................................
Howard County, Nebraska ....................................
Merrick County, Nebraska .....................................
Jefferson County, New York .................................
Yates County, New York .......................................
Craven County, North Carolina .............................
Davidson County, North Carolina .........................
Gates County, North Carolina ...............................
Iredell County, North Carolina ...............................
Jones County, North Carolina ...............................
Lincoln County, North Carolina .............................
Pamlico County, North Carolina ............................
Rowan County, North Carolina .............................
Oliver County, North Dakota .................................
Sioux County, North Dakota .................................
Hocking County, Ohio ...........................................
Perry County, Ohio ................................................
Cotton County, Oklahoma .....................................
Josephine County, Oregon ...................................
Linn County, Oregon .............................................
Adams County, Pennsylvania ...............................
Columbia County, Pennsylvania ...........................
Franklin County, Pennsylvania ..............................
Monroe County, Pennsylvania ..............................
Montour County, Pennsylvania .............................
Utuado Municipio, Puerto Rico .............................
Beaufort County, South Carolina ..........................
Chester County, South Carolina ...........................
Jasper County, South Carolina .............................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
10
10
10
10
10
11
11
11
11
12
12
13
14
14
14
15
15
16
17
18
18
19
19
19
19
19
19
21
21
23
23
24
24
24
24
25
25
27
28
28
28
28
33
33
34
34
34
34
34
34
34
34
35
35
36
36
37
38
38
39
39
39
39
39
40
42
42
42
Frm 00027
Wage index
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
0.8006
0.8006
0.8006
0.8006
0.8006
0.7425
0.7425
0.7425
0.7425
1.0741
1.0741
0.7398
0.8362
0.8362
0.8362
0.8416
0.8416
0.8451
0.7806
0.7744
0.7744
0.7580
0.7580
0.7580
0.7580
0.7580
0.7580
0.8554
0.8554
0.8207
0.8207
0.9124
0.9124
0.9124
0.9124
0.7589
0.7589
0.9024
0.8924
0.8924
0.8924
0.8924
0.8208
0.8208
0.7995
0.7995
0.7995
0.7995
0.7995
0.7995
0.7995
0.7995
0.7099
0.7099
0.8329
0.8329
0.7799
1.0083
1.0083
0.8719
0.8719
0.8719
0.8719
0.8719
0.4047
0.8374
0.8374
0.8374
Fmt 4701
Sfmt 4702
CBSA
26140
37460
42700
45540
18880
12260
12060
47580
47580
27980
27980
26820
14010
16060
16060
31140
17140
43580
48620
14540
14540
29180
29180
35380
25220
29180
43340
15680
41540
33220
24340
40340
33460
33460
33460
32820
27140
13740
24260
24260
24260
24260
48060
40380
35100
49180
47260
16740
35100
16740
35100
16740
13900
13900
18140
18140
30020
24420
10540
23900
14100
16540
20700
14100
10380
25940
16740
25940
E:\FR\FM\01MYP2.SGM
Urban/
Rural
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
0.7625
0.7906
0.7982
0.8095
0.8156
0.9225
0.9369
0.7542
0.7542
1.0561
1.0561
0.8933
0.9165
0.8324
0.8324
0.8605
0.9473
0.8915
0.8472
0.8410
0.8410
0.7869
0.7869
0.8821
0.9452
0.7869
0.8325
0.8593
0.9289
0.7935
0.8799
1.1398
1.1196
1.1196
1.1196
0.8991
0.7891
0.8686
0.9219
0.9219
0.9219
0.9219
0.8386
0.8750
0.8994
0.8679
0.9223
0.9073
0.8994
0.9073
0.8994
0.9073
0.7216
0.7216
0.9539
0.9539
0.7918
1.0086
1.0879
1.0104
0.9347
1.0957
0.9372
0.9347
0.3586
0.8708
0.9073
0.8708
01MYP2
Change in
value
(percent)
¥4.76
¥1.25
¥0.30
1.11
1.87
24.24
26.18
1.58
1.58
¥1.68
¥1.68
20.75
9.60
¥0.45
¥0.45
2.25
12.56
5.49
8.53
8.60
8.60
3.81
3.81
16.37
24.70
3.81
9.83
0.46
8.59
¥3.31
7.21
24.92
22.71
22.71
22.71
18.47
3.98
¥3.75
3.31
3.31
3.31
3.31
2.17
6.60
12.50
8.56
15.36
13.48
12.50
13.48
12.50
13.48
1.65
1.65
14.53
14.53
1.53
0.03
7.89
15.88
7.20
25.67
7.49
7.20
¥11.39
3.99
8.35
3.99
25038
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 15—FY 2016 RURAL TO URBAN CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015
data
FY 2015 CBSA Delineations/FY 2015
data
County name
Urban/
Rural
CBSA
Lancaster County, South Carolina ........................
Union County, South Carolina ..............................
Custer County, South Dakota ...............................
Campbell County, Tennessee ...............................
Crockett County, Tennessee .................................
Maury County, Tennessee ....................................
Morgan County, Tennessee ..................................
Roane County, Tennessee ...................................
Falls County, Texas ..............................................
Hood County, Texas .............................................
Hudspeth County, Texas .......................................
Lynn County, Texas ..............................................
Martin County, Texas ............................................
Newton County, Texas ..........................................
Oldham County, Texas .........................................
Somervell County, Texas ......................................
Box Elder County, Utah ........................................
Augusta County, Virginia .......................................
Buckingham County, Virginia ................................
Culpeper County, Virginia .....................................
Floyd County, Virginia ...........................................
Rappahannock County, Virginia ............................
Staunton City County, Virginia ..............................
Waynesboro City County, Virginia ........................
Columbia County, Washington ..............................
Pend Oreille County, Washington .........................
Stevens County, Washington ................................
Walla Walla County, Washington ..........................
Fayette County, West Virginia ..............................
Raleigh County, West Virginia ..............................
Green County, Wisconsin .....................................
The wage index values of rural areas
are typically lower than that of urban
areas. Therefore, IPFs located in a
county that is currently designated as
urban under the IPF PPS wage index
that would become rural when we
would adopt the new CBSA
delineations may experience a decrease
in their wage index values. We
42
42
43
44
44
44
44
44
45
45
45
45
45
45
45
45
46
49
49
49
49
49
49
49
50
50
50
50
51
51
52
Wage index
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
0.8374
0.8374
0.8312
0.7365
0.7365
0.7365
0.7365
0.7365
0.7855
0.7855
0.7855
0.7855
0.7855
0.7855
0.7855
0.7855
0.8891
0.7674
0.7674
0.7674
0.7674
0.7674
0.7674
0.7674
1.0892
1.0892
1.0892
1.0892
0.7410
0.7410
0.9041
Urban/
Rural
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
0.9073
0.8277
0.8989
0.7015
0.7747
0.8969
0.7015
0.7015
0.8137
0.9386
0.8139
0.8830
0.8940
0.8508
0.8277
0.9386
0.9225
0.8326
0.9053
1.0403
0.8473
1.0403
0.8326
0.8326
1.0934
1.1425
1.1425
1.0934
0.8024
0.8024
1.1130
CBSA
16740
43900
39660
28940
27180
34980
28940
28940
47380
23104
21340
31180
33260
13140
11100
23104
36260
44420
16820
47894
13980
47894
44420
44420
47460
44060
44060
47460
13220
13220
31540
identified 37 counties and 3 IPFs that
would move from urban to rural status
due to the new CBSA delineations
beginning in FY 2016. Table 16 shows
the CBSA delineations and the urban
wage index values for FY 2015 based on
existing CBSA delineations, compared
with the proposed CBSA delineations
and wage index values for FY 2016
Change in
value
(percent)
8.35
¥1.16
8.14
¥4.75
5.19
21.78
¥4.75
¥4.75
3.59
19.49
3.62
12.41
13.81
8.31
5.37
19.49
3.76
8.50
17.97
35.56
10.41
35.56
8.50
8.50
0.39
4.89
4.89
0.39
8.29
8.29
23.11
based on the new OMB CBSA
delineations. Table 16 also shows the
percentage change in these values for
those counties that would change from
urban to rural, beginning in FY 2016,
when we would adopt the new CBSA
delineations.
TABLE 16—FY 2016 URBAN TO RURAL CBSA CROSSWALK
FY 2014 CBSA Delineations/FY 2015
data
FY 2015 CBSA Delineations/FY 2015
data
County name
Urban/
Rural
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
CBSA
Greene County, Alabama ......................................
Franklin County, Arkansas ....................................
Power County, Idaho .............................................
Franklin County, Indiana .......................................
Gibson County, Indiana .........................................
Greene County, Indiana ........................................
Tipton County, Indiana ..........................................
Franklin County, Kansas .......................................
Geary County, Kansas ..........................................
Nelson County, Kentucky ......................................
Webster County, Kentucky ....................................
Franklin County, Massachusetts ...........................
Ionia County, Michigan ..........................................
Newaygo County, Michigan ..................................
George County, Mississippi ..................................
Stone County, Mississippi .....................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
46220
22900
38540
17140
21780
14020
29020
28140
31740
31140
21780
44140
24340
24340
37700
25060
Frm 00028
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
0.8387
0.7593
0.9672
0.9473
0.8537
0.9062
0.8990
0.9419
0.8406
0.8593
0.8537
1.0271
0.8965
0.8965
0.7396
0.8179
Fmt 4701
Sfmt 4702
Urban/
Rural
CBSA
1
4
13
15
15
15
15
17
17
18
18
22
23
23
25
25
E:\FR\FM\01MYP2.SGM
Wage index
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
0.6914
0.7311
0.7398
0.8416
0.8416
0.8416
0.8416
0.7779
0.7779
0.7748
0.7748
1.1553
0.8288
0.8288
0.7570
0.7570
01MYP2
Change in
value
(percent)
¥17.56
¥3.71
¥23.51
¥11.16
¥1.42
¥7.13
¥6.38
¥17.41
¥7.46
¥9.83
¥9.24
12.48
¥7.55
¥7.55
2.35
¥7.45
25039
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 16—FY 2016 URBAN TO RURAL CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015
data
FY 2015 CBSA Delineations/FY 2015
data
County name
Urban/
Rural
CBSA
Crawford County, Missouri ....................................
Howard County, Missouri ......................................
Washington County, Missouri ...............................
Anson County, North Carolina ..............................
Greene County, North Carolina ............................
Erie County, Ohio ..................................................
Ottawa County, Ohio .............................................
Preble County, Ohio ..............................................
Washington County, Ohio .....................................
Stewart County, Tennessee ..................................
Calhoun County, Texas .........................................
Delta County, Texas ..............................................
San Jacinto County, Texas ...................................
Summit County, Utah ............................................
Cumberland County, Virginia ................................
Danville City County, Virginia ................................
King And Queen County, Virginia .........................
Louisa County, Virginia .........................................
Pittsylvania County, Virginia ..................................
Surry County, Virginia ...........................................
Morgan County, West Virginia ..............................
Pleasants County, West Virginia ...........................
We note that IPFs in some urban
CBSAs would experience a change in
their wage index values even though
they remain urban because an urban
CBSA’s boundaries and/or the counties
included in that CBSA could change.
Table 17 shows those counties that
41180
17860
41180
16740
24780
41780
45780
19380
37620
17300
47020
19124
26420
41620
40060
19260
40060
40060
19260
47260
25180
37620
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
0.9366
0.8319
0.9366
0.9230
0.9371
0.7784
0.9129
0.8938
0.8186
0.7526
0.8473
0.9703
0.9734
0.9512
0.9625
0.7963
0.9625
0.9625
0.7963
0.9223
0.9080
0.8186
Urban/
Rural
CBSA
26
26
26
34
34
36
36
36
36
44
45
45
45
46
49
49
49
49
49
49
51
51
would experience a change in their
wage index value in FY 2016 due to the
new OMB CBSAs. Table 17 shows the
urban CBSA delineations and wage
index values for FY 2015 based on
existing CBSA delineations, compared
with the urban CBSA delineations and
Wage index
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
0.7725
0.7725
0.7725
0.7899
0.7899
0.8348
0.8348
0.8348
0.8348
0.7277
0.7847
0.7847
0.7847
0.9005
0.7554
0.7554
0.7554
0.7554
0.7554
0.7554
0.7274
0.7274
Change in
value
(percent)
¥17.52
¥7.14
¥17.52
¥14.42
¥15.71
7.25
¥8.56
¥6.60
1.98
¥3.31
¥7.39
¥19.13
¥19.39
¥5.33
¥21.52
¥5.14
¥21.52
¥21.52
¥5.14
¥18.10
¥19.89
¥11.14
wage index values for FY 2016 based on
the new OMB delineations, and the
percentage change in these values, for
counties that would remain urban even
though the CBSA boundaries and/or
counties included in that CBSA would
change.
TABLE 17—FY 2015 URBAN TO A DIFFERENT FY 2016 URBAN CBSA CROSSWALK
FY 2014 CBSA Delineations/FY 2015
data
FY 2015 CBSA Delineations/FY 2015
data
County name
Urban/
Rural
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
CBSA
Flagler County, Florida ..........................................
De Kalb County, Illinois .........................................
Kane County, Illinois .............................................
Madison County, Indiana ......................................
Meade County, Kentucky ......................................
Essex County, Massachusetts ..............................
Ottawa County, Michigan ......................................
Jackson County, Mississippi .................................
Bergen County, New Jersey .................................
Hudson County, New Jersey ................................
Middlesex County, New Jersey .............................
Monmouth County, New Jersey ............................
Ocean County, New Jersey ..................................
Passaic County, New Jersey ................................
Somerset County, New Jersey .............................
Bronx County, New York .......................................
Dutchess County, New York .................................
Kings County, New York .......................................
New York County, New York ................................
Orange County, New York ....................................
Putnam County, New York ....................................
Queens County, New York ...................................
Richmond County, New York ................................
Rockland County, New York .................................
Westchester County, New York ............................
Brunswick County, North Carolina ........................
Bucks County, Pennsylvania .................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
37380
16974
16974
11300
31140
37764
26100
37700
35644
35644
20764
20764
20764
35644
20764
35644
39100
35644
35644
39100
35644
35644
35644
35644
35644
48900
37964
Frm 00029
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
0.8462
1.0412
1.0412
1.0078
0.8593
1.0769
0.8136
0.7396
1.3110
1.3110
1.0989
1.0989
1.0989
1.3110
1.0989
1.3110
1.1533
1.3110
1.3110
1.1533
1.3110
1.3110
1.3110
1.3110
1.3110
0.8867
1.0837
Fmt 4701
Sfmt 4702
CBSA
19660
20994
20994
26900
21060
15764
24340
25060
35614
35614
35614
35614
35614
35614
35084
35614
20524
35614
35614
35614
20524
35614
35614
35614
35614
34820
33874
E:\FR\FM\01MYP2.SGM
Urban/
Rural
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
0.8376
1.0299
1.0299
1.0133
0.7701
1.1159
0.8799
0.7896
1.2837
1.2837
1.2837
1.2837
1.2837
1.2837
1.1233
1.2837
1.1345
1.2837
1.2837
1.2837
1.1345
1.2837
1.2837
1.2837
1.2837
0.8620
1.0157
01MYP2
Change in
value
(percent)
¥1.02
¥1.09
¥1.09
0.55
¥10.38
3.62
8.15
6.76
¥2.08
¥2.08
16.82
16.82
16.82
¥2.08
2.22
¥2.08
¥1.63
¥2.08
¥2.08
11.31
¥13.46
¥2.08
¥2.08
¥2.08
¥2.08
¥2.79
¥6.27
25040
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 17—FY 2015 URBAN TO A DIFFERENT FY 2016 URBAN CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015
data
FY 2015 CBSA Delineations/FY 2015
data
County name
Urban/
Rural
CBSA
Chester County, Pennsylvania ..............................
Montgomery County, Pennsylvania ......................
Arecibo Municipio, Puerto Rico .............................
Camuy Municipio, Puerto Rico ..............................
Ceiba Municipio, Puerto Rico ................................
Fajardo Municipio, Puerto Rico .............................
Guanica Municipio, Puerto Rico ............................
Guayanilla Municipio, Puerto Rico ........................
Hatillo Municipio, Puerto Rico ...............................
Luquillo Municipio, Puerto Rico .............................
Penuelas Municipio, Puerto Rico ..........................
Quebradillas Municipio, Puerto Rico .....................
Yauco Municipio, Puerto Rico ...............................
Anderson County, South Carolina ........................
Grainger County, Tennessee ................................
Lincoln County, West Virginia ...............................
Putnam County, West Virginia ..............................
Likewise, IPFs currently located in a
rural area may remain rural under the
new CBSA delineations but experience
a change in their rural wage index value
due to implementation of the new CBSA
37964
37964
41980
41980
21940
21940
49500
49500
41980
21940
49500
41980
49500
11340
34100
16620
16620
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
1.0837
1.0837
0.4449
0.4449
0.3669
0.3669
0.3375
0.3375
0.4449
0.3669
0.3375
0.4449
0.3375
0.8744
0.6983
0.7988
0.7988
delineations. Table 18 shows the FY
2015 CBSA delineations and rural
statewide wage index values, compared
with the FY 2016 CBSA delineations
and rural statewide wage index values,
Urban/
Rural
CBSA
33874
33874
11640
11640
41980
41980
38660
38660
11640
41980
38660
11640
38660
24860
28940
26580
26580
Wage index
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
URBAN
1.0157
1.0157
0.4213
0.4213
0.4438
0.4438
0.4154
0.4154
0.4213
0.4438
0.4154
0.4213
0.4154
0.9161
0.7015
0.8846
0.8846
Change in
value
(percent)
¥6.27
¥6.27
¥5.30
¥5.30
20.96
20.96
23.08
23.08
¥5.30
20.96
23.08
¥5.30
23.08
4.77
0.46
10.74
10.74
and the percentage change in these
values, for those rural areas that would
change.
TABLE 18—FY 2016 CHANGES TO THE STATEWIDE RURAL WAGE INDEX CROSSWALK
FY 2014 CBSA Delineations/
FY 2015 data
FY 2015 CBSA Delineations/
FY 2015 data
County name
Urban/
Rural
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
CBSA
ALABAMA ..............................................................
ARIZONA ...............................................................
CONNECTICUT ....................................................
FLORIDA ...............................................................
GEORGIA ..............................................................
HAWAII ..................................................................
ILLINOIS ................................................................
KANSAS ................................................................
KENTUCKY ...........................................................
LOUISIANA ...........................................................
MARYLAND ...........................................................
MASSACHUSETTS ...............................................
MICHIGAN .............................................................
MISSISSIPPI .........................................................
NEBRASKA ...........................................................
NEW YORK ...........................................................
NORTH CAROLINA ..............................................
OHIO .....................................................................
OREGON ...............................................................
PENNSYLVANIA ...................................................
SOUTH CAROLINA ..............................................
TENNESSEE .........................................................
TEXAS ...................................................................
UTAH .....................................................................
VIRGINIA ...............................................................
WASHINGTON ......................................................
WEST VIRGINIA ...................................................
WISCONSIN ..........................................................
While we believe that the new CBSA
delineations would result in wage index
values that are more representative of
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
1
3
7
10
11
12
14
17
18
19
21
22
23
25
28
33
34
36
38
39
42
44
45
46
49
50
51
52
Wage index
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
0.6963
0.9125
1.1251
0.8006
0.7425
1.0741
0.8362
0.7806
0.7744
0.7580
0.8554
1.3920
0.8207
0.7589
0.8924
0.8208
0.7995
0.8329
1.0083
0.8719
0.8374
0.7365
0.7855
0.8891
0.7674
1.0892
0.7410
0.9041
the actual costs of labor in a given area,
we also recognize that use of the new
CBSA delineations would result in
PO 00000
Frm 00030
Fmt 4701
Sfmt 4702
Urban/
Rural
CBSA
1
3
7
10
11
12
14
17
18
19
21
22
23
25
28
33
34
36
38
39
42
44
45
46
49
50
51
52
Wage index
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
0.6914
0.9219
1.1295
0.8371
0.7439
1.0872
0.8369
0.7779
0.7748
0.7108
0.8746
1.1553
0.8288
0.7570
0.8877
0.8192
0.7899
0.8348
0.9949
0.8083
0.8370
0.7277
0.7847
0.9005
0.7554
1.0877
0.7274
0.9087
Change in
value
(percent)
¥0.70
1.03
0.39
4.56
0.19
1.22
0.08
¥0.35
0.05
¥6.23
2.24
¥17.00
0.99
¥0.25
¥0.53
¥0.19
¥1.20
0.23
¥1.33
¥7.29
¥0.05
¥1.19
¥0.10
1.28
¥1.56
¥0.14
¥1.84
0.51
reduced payments to some IPFs and
increased payments to other IPFs, due to
changes in wage index values.
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Approximately 23.4 percent of IPFs
would experience a decrease in wage
index values due to CBSA changes,
while 12.4 percent of IPFs would
experience an increase in wage index
values due to CBSA changes. The
remaining 64.1 percent of IPFs would
experience no change in their wage
index values (these percentages do not
sum to 100.0 percent due to rounding).
While the wage index CBSA changes
would be implemented in a budgetneutral fashion, the distributional
effects of these CBSA changes appear to
affect rural IPFs in particular; column 5
in Table 26 in section VII. of this
proposed rule shows that rural
providers overall are anticipated to
experience payment reductions of 0.2
percent, with for-profit rural psychiatric
hospitals anticipated to experience the
greatest reduction of 0.6 percent. We
believe that it would be appropriate to
provide for a transition period to
mitigate any negative impacts on
facilities that experience reduced
payments as a result of our adopting the
new OMB CBSA delineations.
Therefore, we propose to implement
these CBSA changes using a 1-year
transition with a blended wage index for
all providers. For FY 2016, the wage
index for each provider would consist of
a blend of 50 percent of the FY 2016 IPF
wage index using the current OMB
delineations and 50 percent of the FY
2016 IPF wage index using the new
OMB delineations. This results in an
average of the 2 values. We propose that
the FY 2017 IPF PPS wage index and
subsequent IPF PPS wage indices would
be based solely on the new OMB CBSA
delineations. We believe a 1-year
transition strikes an appropriate balance
between ensuring that IPF PPS
payments are as accurate and stable as
possible while giving IPFs time to adjust
to the new CBSA delineations. The
proposed FY 2016 IPF PPS Transitional
wage index is located on the CMS Web
site at https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
IPFPPS/WageIndex.html.
d. Adjustment for Rural Location and
Proposal to Phase Out the Rural
Adjustment for IPFs Losing Their Rural
Adjustment Due to CBSA Changes
In the November 2004 IPF PPS final
rule, we provided a 17 percent payment
adjustment for IPFs located in a rural
area. This adjustment was based on the
regression analysis, which indicated
that the per diem cost of rural facilities
was 17 percent higher than that of urban
facilities after accounting for the
influence of the other variables included
in the regression. For FY 2016, we
propose to continue to apply a 17
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
percent payment adjustment for IPFs
located in a rural area as defined at
§ 412.64(b)(1)(ii)(C). A complete
discussion of the adjustment for rural
locations appears in the November 2004
IPF PPS final rule (69 FR 66954).
As noted in section III.D.1.c. of this
proposed rule, we are proposing to
adopt OMB updates to CBSA
delineations. Adoption of the updated
CBSAs would change the status of 37
IPF providers currently designated as
‘‘rural’’ to ‘‘urban’’ for FY 2016 and
subsequent fiscal years. As such, these
37 newly-urban providers would no
longer receive the 17 percent rural
adjustment.
While 34 of these 37 rural IPFs that
would be designated as urban under the
new CBSA delineations would
experience an increase in their wage
index value, all 37 of these IPFs would
lose the 17 percent rural adjustment.
Consistent with the transition policy
adopted for Inpatient Rehabilitation
Facilities (IRFs) in FY 2006 (70 FR
47923 through 47927), we considered
the appropriateness of applying a 3-year
phase-out of the rural adjustment for
IPFs located in rural counties that
would become urban under the new
OMB delineations, given the potentially
significant payment impacts for these
IPFs. We believe that a phase-out of the
rural adjustment transition period for
these 37 IPFs specifically is appropriate
because we expect these IPFs would
experience a steeper and more abrupt
reduction in their payments compared
to other IPFs.
Therefore, in addition to the 2-year
wage index transition policy noted
above, we are proposing a budgetneutral 3-year phase-out of the rural
adjustment for existing FY 2015 rural
IPFs that would become urban in FY
2016 and that experience a loss in
payments due to changes from the new
CBSA delineations. Accordingly, the
incremental steps needed to reduce the
impact of the loss of the FY 2015 rural
adjustment of 17 percent would be
taken over FYs 2016, 2017 and 2018.
This policy would allow rural IPFs that
would be classified as urban in FY 2016
to receive two-thirds of the 2015 rural
adjustment for FY 2016, as well as the
blended wage index. For FY 2017, these
IPFs would receive the full FY 2017
wage index and one-third of the FY
2015 rural adjustment. For FY 2018,
these IPFs would receive the full FY
2018 wage index without a rural
adjustment. We believe a 3-year budgetneutral phase-out of the rural
adjustment for IPFs that transition from
rural to urban status under the new
CBSA delineations would best
accomplish the goals of mitigating the
PO 00000
Frm 00031
Fmt 4701
Sfmt 4702
25041
loss of the rural adjustment for existing
FY 2015 rural IPFs. The purpose of the
gradual phase-out of the rural
adjustment for these providers is to
alleviate the significant payment
implications for existing rural IPFs that
may need time to adjust to the loss of
their FY 2015 rural payment adjustment
or that experience a reduction in
payments solely because of this redesignation. As stated, this policy is
specifically for rural IPFs that become
urban in FY 2016. We are not
implementing a transition policy for
urban IPFs that become rural in FY 2016
because these IPFs will receive the full
rural adjustment of 17 percent
beginning October 1, 2015.
For the reasons discussed, we are
proposing to implement a 3-year budgetneutral phase-out of the rural
adjustment for the IPFs that during FY
2015 were designated as rural and for
FY 2016 are designated as urban under
the new CBSA system. This is in
addition to our proposed
implementation of a 2-year blended
wage index for all IPFs. We believe that
the incremental reduction of the FY
2015 rural adjustment would be
appropriate to mitigate a significant
reduction in payment. We considered
alternative timeframes for phasing out
the rural adjustment for IPFs which
would transition from rural to urban
status in FY 2016, but believe that a 3year budget-neutral phase-out of the
rural adjustment would appropriately
mitigate the adverse payment impacts
for existing FY 2015 rural IPFs that will
be designated as urban IPFs in FY 2016,
while also ensuring that payment rates
for these providers are set accurately
and appropriately. We invite public
comment on this proposed policy.
e. Budget Neutrality Adjustment
Changes to the wage index are made
in a budget-neutral manner so that
updates do not increase expenditures.
Therefore, for FY 2016, we propose to
continue to apply a budget-neutrality
adjustment in accordance with our
existing budget-neutrality policy. This
policy requires us to estimate the total
amount of IPF PPS payments for FY
2016 using the labor-related share and
the wage indices from FY 2015 divided
by the total estimated IPF PPS payments
for FY 2016 using the labor-related
share and wage indices from FY 2016.
The estimated payments are based on
FY 2014 IPF claims, inflated to the
appropriate FY. This quotient is the
wage index budget-neutrality factor, and
it is applied in the update of the Federal
per diem base rate for FY 2016 in
addition to the market basket described
in section III.A. of this proposed rule.
E:\FR\FM\01MYP2.SGM
01MYP2
25042
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
The proposed wage index budgetneutrality factor for FY 2016 is 1.0041.
2. Teaching Adjustment
In the November 2004 IPF PPS final
rule, we implemented regulations at
§ 412.424(d)(1)(iii) to establish a facilitylevel adjustment for IPFs that are, or are
part of, teaching hospitals. The teaching
adjustment accounts for the higher
indirect operating costs experienced by
hospitals that participate in graduate
medical education (GME) programs. The
payment adjustments are made based on
the ratio of the number of full-time
equivalent (FTE) interns and residents
training in the IPF and the IPF’s average
daily census (ADC).
Medicare makes direct GME payments
(for direct costs such as resident and
teaching physician salaries, and other
direct teaching costs) to all teaching
hospitals including those paid under a
PPS, and those paid under the TEFRA
rate-of-increase limits. These direct
GME payments are made separately
from payments for hospital operating
costs and are not part of the IPF PPS.
The direct GME payments do not
address the estimated higher indirect
operating costs teaching hospitals may
face.
The results of the regression analysis
of FY 2002 IPF data established the
basis for the payment adjustments
included in the November 2004 IPF PPS
final rule. The results showed that the
indirect teaching cost variable is
significant in explaining the higher
costs of IPFs that have teaching
programs. We calculated the teaching
adjustment based on the IPF’s ‘‘teaching
variable,’’ which is one plus the ratio of
the number of FTE residents training in
the IPF (subject to limitations described
below) to the IPF’s ADC.
We established the teaching
adjustment in a manner that limited the
incentives for IPFs to add FTE residents
for the purpose of increasing their
teaching adjustment. We imposed a cap
on the number of FTE residents that
may be counted for purposes of
calculating the teaching adjustment. The
cap limits the number of FTE residents
that teaching IPFs may count for the
purpose of calculating the IPF PPS
teaching adjustment, not the number of
residents teaching institutions can hire
or train. We calculated the number of
FTE residents that trained in the IPF
during a ‘‘base year’’ and used that FTE
resident number as the cap. An IPF’s
FTE resident cap is ultimately
determined based on the final
settlement of the IPF’s most recent cost
report filed before November 15, 2004
(that is, the publication date of the IPF
PPS final rule). A complete discussion
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
on the temporary adjustment to the FTE
cap to reflect residents added due to
hospital closure and by residency
program appears in the January 27, 2011
IPF PPS proposed rule (76 FR 5018
through 5020) and the May 6, 2011 IPF
PPS final rule (76 R 26453 through
26456).
In the regression analysis, the
logarithm of the teaching variable had a
coefficient value of 0.5150. We
converted this cost effect to a teaching
payment adjustment by treating the
regression coefficient as an exponent
and raising the teaching variable to a
power equal to the coefficient value. We
note that the coefficient value of 0.5150
was based on the regression analysis
holding all other components of the
payment system constant. A complete
discussion of how the teaching
adjustment was calculated appears in
the November 2004 IPF PPS final rule
(69 FR 66954 through 66957) and the
May 2008 IPF PPS notice (73 FR 25721).
As with other adjustment factors
derived through the regression analysis,
we do not plan to rerun the teaching
adjustment factors in the regression
analysis until we more fully analyze IPF
PPS data. Therefore, in this proposed
rule, for FY 2016, we propose to
continue to retain the coefficient value
of 0.5150 for the teaching adjustment to
the Federal per diem base rate.
3. Cost of Living Adjustment for IPFs
Located in Alaska and Hawaii
The IPF PPS includes a payment
adjustment for IPFs located in Alaska
and Hawaii based upon the county in
which the IPF is located. As we
explained in the November 2004 IPF
PPS final rule, the FY 2002 data
demonstrated that IPFs in Alaska and
Hawaii had per diem costs that were
disproportionately higher than other
IPFs. Other Medicare PPSs (for example,
the IPPS and LTCH PPS) adopted a cost
of living adjustment (COLA) to account
for the cost differential of care furnished
in Alaska and Hawaii.
We analyzed the effect of applying a
COLA to payments for IPFs located in
Alaska and Hawaii. The results of our
analysis demonstrated that a COLA for
IPFs located in Alaska and Hawaii
would improve payment equity for
these facilities. As a result of this
analysis, we provided a COLA in the
November 2004 IPF PPS final rule.
A COLA for IPFs located in Alaska
and Hawaii is made by multiplying the
nonlabor-related portion of the Federal
per diem base rate by the applicable
COLA factor based on the COLA area in
which the IPF is located.
The COLA factors are published on
the Office of Personnel Management
PO 00000
Frm 00032
Fmt 4701
Sfmt 4702
(OPM) Web site (https://www.opm.gov/
oca/cola/rates.asp).
We note that the COLA areas for
Alaska are not defined by county as are
the COLA areas for Hawaii. In 5 CFR
591.207, the OPM established the
following COLA areas:
• City of Anchorage, and 80-kilometer
(50-mile) radius by road, as measured
from the Federal courthouse;
• City of Fairbanks, and 80-kilometer
(50-mile) radius by road, as measured
from the Federal courthouse;
• City of Juneau, and 80-kilometer
(50-mile) radius by road, as measured
from the Federal courthouse;
• Rest of the State of Alaska.
As stated in the November 2004 IPF
PPS final rule, we update the COLA
factors according to updates established
by the OPM. However, sections 1911
through 1919 of the Nonforeign Area
Retirement Equity Assurance Act, as
contained in subtitle B of title XIX of the
National Defense Authorization Act
(NDAA) for Fiscal Year 2010 (Pub. L.
111–84, October 28, 2009), transitions
the Alaska and Hawaii COLAs to
locality pay. Under section 1914 of Pub.
L. 111–84, locality pay is being phased
in over a 3-year period beginning in
January 2010, with COLA rates frozen as
of the date of enactment, October 28,
2009, and then proportionately reduced
to reflect the phase-in of locality pay.
When we published the proposed
COLA factors in the January 2011 IPF
PPS proposed rule (76 FR 4998), we
inadvertently selected the FY 2010
COLA rates which had been reduced to
account for the phase-in of locality pay.
We did not intend to propose the
reduced COLA rates because that would
have understated the adjustment. Since
the 2009 COLA rates did not reflect the
phase-in of locality pay, we finalized
the FY 2009 COLA rates for RY 2010
through RY 2014.
In the FY 2013 IPPS/LTCH final rule
(77 FR 53700 through 53701), CMS
established a methodology for FY 2014
to update the COLA factors for Alaska
and Hawaii. Under that methodology,
we use a comparison of the growth in
the Consumer Price Indices (CPIs) in
Anchorage, Alaska and Honolulu,
Hawaii relative to the growth in the
overall CPI as published by the Bureau
of Labor Statistics (BLS) to update the
COLA factors for all areas in Alaska and
Hawaii, respectively. As discussed in
the FY 2013 IPPS/LTCH proposed rule
(77 FR 28145), because BLS publishes
CPI data for only Anchorage, Alaska and
Honolulu, Hawaii, our methodology for
updating the COLA factors uses a
comparison of the growth in the CPIs for
those cities relative to the growth in the
overall CPI to update the COLA factors
E:\FR\FM\01MYP2.SGM
01MYP2
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
for all areas in Alaska and Hawaii,
respectively. We believe that the relative
price differences between these cities
and the United States (as measured by
the CPIs mentioned above) are generally
appropriate proxies for the relative price
differences between the ‘‘other areas’’ of
Alaska and Hawaii and the United
States.
The CPIs for ‘‘All Items’’ that BLS
publishes for Anchorage, Alaska,
Honolulu, Hawaii, and for the average
U.S. city are based on a different mix of
commodities and services than is
reflected in the nonlabor-related share
of the IPPS market basket. As such,
under the methodology we established
to update the COLA factors, we
calculated a ‘‘reweighted CPI’’ using the
CPI for commodities and the CPI for
services for each of the geographic areas
to mirror the composition of the IPPS
market basket nonlabor-related share.
The current composition of BLS’ CPI for
‘‘All Items’’ for all of the respective
areas is approximately 40 percent
commodities and 60 percent services.
However, the nonlabor-related share of
the IPPS market basket is comprised of
60 percent commodities and 40 percent
services. Therefore, under the
methodology established for FY 2014 in
the FY 2013 IPPS/LTCH PPS final rule,
we created reweighted indexes for
Anchorage, Alaska, Honolulu, Hawaii,
and the average U.S. city using the
respective CPI commodities index and
CPI services index and applying the
approximate 60/40 weights from the
IPPS market basket. This approach is
appropriate because we would continue
to make a COLA for hospitals located in
Alaska and Hawaii by multiplying the
nonlabor-related portion of the
standardized amount by a COLA factor.
Under the COLA factor update
methodology established in the FY 2014
IPPS/LTCH final rule, we adjust
payments made to hospitals located in
Alaska and Hawaii by incorporating a
25-percent cap on the CPI-updated
COLA factors. We note that OPM’s
COLA factors were calculated with a
statutorily mandated cap of 25 percent,
and since at least 1984, we have
exercised our discretionary authority to
adjust Alaska and Hawaii payments by
incorporating this cap. In keeping with
this historical policy, we would
continue to use such a cap, as our
proposal is based on OPM’s COLA
factors. We believe this approach is
appropriate because our CPI-updated
COLA factors use the 2009 OPM COLA
factors as a basis.
In FY 2015 IPF PPS rulemaking, we
adopted the same methodology for the
COLA factors applied under the IPPS
because IPFs are hospitals with a similar
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
mix of commodities and services. We
think it is appropriate to have a
consistent policy approach with that of
other hospitals in Alaska and Hawaii.
Therefore, in the FY 2015 IPF PPS final
rule, we adopted the cost of living
adjustment factors shown in the
Addendum for IPFs located in Alaska
and Hawaii. Under IPPS COLA policy,
the COLA updates are determined every
four years, when the IPPS market basket
is rebased. Since the IPPS COLA factors
were last updated in FY 2014, they are
not scheduled to be updated again until
FY 2018. As such, we propose to
continue using the existing IPF PPS
COLA factors in effect in FY 2015 for FY
2016. The IPF PPS COLA factors for FY
2016 are shown in the Addendum of
this proposed rule.
4. Proposed Adjustment for IPFs With a
Qualifying Emergency Department (ED)
The IPF PPS includes a facility-level
adjustment for IPFs with qualifying EDs.
We provide an adjustment to the
Federal per diem base rate to account
for the costs associated with
maintaining a full-service ED. The
adjustment is intended to account for
ED costs incurred by a freestanding
psychiatric hospital with a qualifying
ED or a distinct part psychiatric unit of
an acute care hospital or a CAH, for
preadmission services otherwise
payable under the Medicare Outpatient
Prospective Payment System (OPPS),
furnished to a beneficiary on the date of
the beneficiary’s admission to the
hospital and during the day
immediately preceding the date of
admission to the IPF (see § 413.40(c)(2)),
and the overhead cost of maintaining
the ED. This payment is a facility-level
adjustment that applies to all IPF
admissions (with one exception
described below), regardless of whether
a particular patient receives
preadmission services in the hospital’s
ED.
The ED adjustment is incorporated
into the variable per diem adjustment
for the first day of each stay for IPFs
with a qualifying ED. That is, IPFs with
a qualifying ED receive an adjustment
factor of 1.31 as the variable per diem
adjustment for day 1 of each stay. If an
IPF does not have a qualifying ED, it
receives an adjustment factor of 1.19 as
the variable per diem adjustment for day
1 of each patient stay.
The ED adjustment is made on every
qualifying claim except as described
below. As specified in
§ 412.424(d)(1)(v)(B), the ED adjustment
is not made when a patient is
discharged from an acute care hospital
or CAH and admitted to the same
hospital’s or CAH’s psychiatric unit. We
PO 00000
Frm 00033
Fmt 4701
Sfmt 4702
25043
clarified in the November 2004 IPF PPS
final rule (69 FR 66960) that an ED
adjustment is not made in this case
because the costs associated with ED
services are reflected in the DRG
payment to the acute care hospital or
through the reasonable cost payment
made to the CAH.
Therefore, when patients are
discharged from an acute care hospital
or CAH and admitted to the same
hospital or CAH’s psychiatric unit, the
IPF receives the 1.19 adjustment factor
as the variable per diem adjustment for
the first day of the patient’s stay in the
IPF.
For FY 2016, we are proposing to
continue to retain the 1.31 adjustment
factor for IPFs with qualifying EDs. A
complete discussion of the steps
involved in the calculation of the ED
adjustment factor appears in the
November 2004 IPF PPS final rule (69
FR 66959 through 66960) and the May
2006 IPF PPS final rule (71 FR 27070
through 27072).
E. Other Proposed Payment
Adjustments and Policies
1. Outlier Payment Overview
The IPF PPS includes an outlier
adjustment to promote access to IPF
care for those patients who require
expensive care and to limit the financial
risk of IPFs treating unusually costly
patients. In the November 2004 IPF PPS
final rule, we implemented regulations
at § 412.424(d)(3)(i) to provide a percase payment for IPF stays that are
extraordinarily costly. Providing
additional payments to IPFs for
extremely costly cases strongly
improves the accuracy of the IPF PPS in
determining resource costs at the patient
and facility level. These additional
payments reduce the financial losses
that would otherwise be incurred in
treating patients who require more
costly care and, therefore, reduce the
incentives for IPFs to under-serve these
patients.
We make outlier payments for
discharges in which an IPF’s estimated
total cost for a case exceeds a fixed
dollar loss threshold amount
(multiplied by the IPF’s facility-level
adjustments) plus the Federal per diem
payment amount for the case.
In instances when the case qualifies
for an outlier payment, we pay 80
percent of the difference between the
estimated cost for the case and the
adjusted threshold amount for days 1
through 9 of the stay (consistent with
the median LOS for IPFs in FY 2002),
and 60 percent of the difference for day
10 and thereafter. We established the 80
percent and 60 percent loss sharing
E:\FR\FM\01MYP2.SGM
01MYP2
25044
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
ratios because we were concerned that
a single ratio established at 80 percent
(like other Medicare PPSs) might
provide an incentive under the IPF per
diem payment system to increase LOS
in order to receive additional payments.
After establishing the loss sharing
ratios, we determined the current FY
2015 fixed dollar loss threshold amount
through payment simulations designed
to compute a dollar loss beyond which
payments are estimated to meet the 2
percent outlier spending target. Each
year when we update the IPF PPS, we
simulate payments using the latest
available data to compute the fixed
dollar loss threshold so that outlier
payments represent 2 percent of total
projected IPF PPS payments.
2. Proposed Update to the Outlier Fixed
Dollar Loss Threshold Amount
In accordance with the update
methodology described in § 412.428(d),
we propose to update the fixed dollar
loss threshold amount used under the
IPF PPS outlier policy. Based on the
regression analysis and payment
simulations used to develop the IPF
PPS, we established a 2 percent outlier
policy which strikes an appropriate
balance between protecting IPFs from
extraordinarily costly cases while
ensuring the adequacy of the Federal
per diem base rate for all other cases
that are not outlier cases.
Based on an analysis of the latest
available data (that is, FY 2014 IPF
claims) and rate increases, we believe it
is necessary to update the fixed dollar
loss threshold amount in order to
maintain an outlier percentage that
equals 2 percent of total estimated IPF
PPS payments. To update the IPF outlier
threshold amount for FY 2016, we
propose to use FY 2014 claims data and
the same methodology that we used to
set the initial outlier threshold amount
in the May 2006 IPF PPS final rule (71
FR 27072 and 27073), which is also the
same methodology that we used to
update the outlier threshold amounts for
years 2008 through 2015. Based on an
analysis of this updated data, we
estimate that IPF outlier payments as a
percentage of total estimated payments
are approximately 2.3 percent in FY
2015. Therefore, we propose to update
the outlier threshold amount to $9,825
to maintain estimated outlier payments
at approximately 2 percent of total
estimated aggregate IPF payments for FY
2016.
3. Proposed Update to IPF Cost-toCharge Ratio Ceilings
Under the IPF PPS, an outlier
payment is made if an IPF’s cost for a
stay exceeds a fixed dollar loss
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
threshold amount plus the IPF PPS
amount. In order to establish an IPF’s
cost for a particular case, we multiply
the IPF’s reported charges on the
discharge bill by its overall cost-tocharge ratio (CCR). This approach to
determining an IPF’s cost is consistent
with the approach used under the IPPS
and other PPSs. In the June 2003 IPPS
final rule (68 FR 34494), we
implemented changes to the IPPS policy
used to determine CCRs for acute care
hospitals because we became aware that
payment vulnerabilities resulted in
inappropriate outlier payments. Under
the IPPS, we established a statistical
measure of accuracy for CCRs in order
to ensure that aberrant CCR data did not
result in inappropriate outlier
payments.
As we indicated in the November
2004 IPF PPS final rule (69 FR 66961),
because we believe that the IPF outlier
policy is susceptible to the same
payment vulnerabilities as the IPPS, we
adopted a method to ensure the
statistical accuracy of CCRs under the
IPF PPS. Specifically, we adopted the
following procedure in the November
2004 IPF PPS final rule: We calculated
2 national ceilings, one for IPFs located
in rural areas and one for IPFs located
in urban areas. We computed the
ceilings by first calculating the national
average and the standard deviation of
the CCR for both urban and rural IPFs
using the most recent CCRs entered in
the CY 2015 Provider Specific File.
To determine the rural and urban
ceilings, we multiplied each of the
standard deviations by 3 and added the
result to the appropriate national CCR
average (either rural or urban). The
upper threshold CCR for IPFs in FY
2016 is 1.9041 for rural IPFs, and 1.6881
for urban IPFs, based on CBSA-based
geographic designations. If an IPF’s CCR
is above the applicable ceiling, the ratio
is considered statistically inaccurate,
and we assign the appropriate national
(either rural or urban) median CCR to
the IPF.
We apply the national CCRs to the
following situations:
• New IPFs that have not yet
submitted their first Medicare cost
report. We continue to use these
national CCRs until the facility’s actual
CCR can be computed using the first
tentatively or final settled cost report.
• IPFs whose overall CCR is in excess
of 3 standard deviations above the
corresponding national geometric mean
(that is, above the ceiling).
• Other IPFs for which the MAC
obtains inaccurate or incomplete data
with which to calculate a CCR.
We are not proposing to make any
changes to the application of the
PO 00000
Frm 00034
Fmt 4701
Sfmt 4702
national CCRs or to the procedures for
updating the CCR ceilings in FY 2016.
However, we are proposing to update
the FY 2016 national median and
ceiling CCRs for urban and rural IPFs
based on the CCRs entered in the latest
available IPF PPS Provider Specific File.
Specifically, for FY 2016, and to be used
in each of the 3 situations listed above,
using the most recent CCRs entered in
the CY 2015 Provider Specific File we
estimate the national median CCR of
0.6210 for rural IPFs and the national
median CCR of 0.4675 for urban IPFs.
These calculations are based on the
IPF’s location (either urban or rural)
using the CBSA-based geographic
designations.
A complete discussion regarding the
national median CCRs appears in the
November 2004 IPF PPS final rule (69
FR 66961 through 66964).
IV. Other Payment Policy Issues
A. ICD–10–CM and ICD–10–PCS
Implementation
We remind IPF providers that CMS is
implementing the International
Classification of Diseases, 10th
Revision, Clinical Modification (ICD–
10–CM) as the HIPAA designated code
set for reporting diseases, injuries,
impairments, other health related
problems, their manifestations, and
causes of injury as of October 1, 2015.
Below is a brief history of key activities
leading to the October 1, 2015
implementation date.
In the Standards for Electronic
Transactions final rule, published in the
Federal Register on August 17, 2000 (65
FR 50312), the Department adopted the
International Classification of Diseases,
9th Revision, Clinical Modification
(ICD–9–CM) as the HIPAA designated
code set for reporting diseases, injuries,
impairments, other health related
problems, their manifestations, and
causes of injury. Therefore, on January
1, 2005 when the IPF PPS began, we
used ICD–9–CM as the designated code
set for the IPF PPS. IPF claims with a
principal diagnosis included in Chapter
Five of the ICD–9–CM are paid the
Federal per diem base rate and all other
applicable adjustments, including any
applicable DRG adjustment.
Together with the rest of the
healthcare industry, CMS was
scheduled to implement the 10th
revision of the ICD coding scheme, that
is, ICD–10–CM, on October 1, 2014.
Hence, in the FY 2014 IPF PPS final rule
(78 FR 46741–46742), we finalized a
policy that ICD–10–CM codes will be
used in IPF PPS.
On April 1, 2014, the Protecting
Access to Medicare Act of 2014 (PAMA)
E:\FR\FM\01MYP2.SGM
01MYP2
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
(Pub. L. 113–93) was enacted. Section
212 of PAMA, titled ‘‘Delay in
Transition from ICD–9 to ICD–10 Code
Sets,’’ provided that ‘‘[t]he Secretary of
Health and Human Services may not,
prior to October 1, 2015, adopt ICD–10
code sets as the standard for code sets
under section 1173(c) of the Social
Security Act (42 U.S.C. 1320d-2(c)) and
section 162.1002 of title 45, Code of
Federal Regulations.’’ On May 1, 2014,
the Secretary announced that HHS
expected to issue an interim final rule
that would require use of ICD–10–CM
beginning October 1, 2015 and would
continue to require use of ICD–9–CM
through September 30, 2015. This
announcement is available on the CMS
Web site at https://cms.gov/Medicare/
Coding/ICD10/. HHS
finalized the new compliance date of
October 1, 2015 for ICD–10–CM and
ICD–10–PCS in an August 4, 2014 final
rule titled ‘‘Administrative
Simplification: Change to the
Compliance Date for the International
Classification of Diseases, 10th Revision
(ICD–10–CM and ICD–10–PCS)’’ (79 FR
45128). This rule also requires HIPAA
covered entities to continue to use the
ICD–9–CM code set through September
30, 2015. Therefore, beginning October
1, 2015, we require use of the ICD–10–
CM and ICD–10–PCS codes for reporting
the MS–DRG and comorbidity
adjustment factors for IPF services.
Every year, changes to the ICD–10–
CM and the ICD–10–PCS coding system
will be addressed in the IPPS proposed
and final rules. The changes to the
codes are effective October 1 of each
year and must be used by acute care
hospitals as well as other providers to
report diagnostic and procedure
information. The IPF PPS has always
incorporated ICD–9–CM coding changes
made in the annual IPPS update and
will continue to do so for the ICD–10–
CM and ICD–10–PCS coding changes.
We will continue to publish coding
changes in a Transmittal/Change
Request, similar to how coding changes
are announced by the IPPS and LTCH
PPS. The coding changes relevant to the
IPF PPS are also published in the IPF
PPS proposed and final rules, or in IPF
PPS update notices. In § 412.428(e), we
indicate that CMS will publish
information pertaining to the annual
update for the IPF PPS, which includes
describing the ICD–9–CM coding
changes and DRG classification changes
discussed in the annual update to the
hospital IPPS regulations. Because ICD–
10–CM will be implemented on October
1, 2015, we need to update the
regulation language at § 412.428(e) to
refer to ICD–10–CM, rather than ICD–9–
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
CM. Therefore, we propose to revise
§ 412.428(e) to state that the information
we will publish annually in the Federal
Register to describe IPF PPS updates
would describe the ICD–10–CM coding
changes and DRG classification changes
discussed in the annual update to the
hospital inpatient prospective payment
system regulations. In the FY 2015 IPF
PPS final rule (79 FR 45945 through
46946), the MS–DRGs were converted so
that the MS–DRG assignment logic uses
ICD–10–CM/PCS codes directly. When
an IPF submits a claim for discharges,
the ICD–10–CM/PCS diagnosis and
procedure codes will be assigned to the
correct MS–DRG. In the FY 2015 IPF
PPS final rule, we also identified the
ICD–10–CM/PCS codes that are eligible
for comorbidity payment adjustments
under the IPF PPS (79 FR 45947 through
45955).
The ICD–10–CM guidelines are
updated each year along with the ICD–
10–CM code set. To find the annual
coding guidelines, go to CDC’s Web site
at https://www.cdc.gov/nchs/icd/
icd10cm.htm or the annual ICD–10–CM
updates posted on the CMS ICD–10 Web
site at https://www.cms.gov/Medicare/
Coding/ICD10/.
B. Status of Future Refinements
For RY 2012, we identified several
areas of concern for future refinement,
and we invited comments on these
issues in our RY 2012 proposed and
final rules. For further discussion of
these issues and to review the public
comments, we refer readers to the RY
2012 IPF PPS proposed rule (76 FR
4998) and final rule (76 FR 26432).
We have delayed making refinements
to the IPF PPS until we have completed
a thorough analysis of IPF PPS data on
which to base those refinements.
Specifically, we will delay updating the
adjustment factors derived from the
regression analysis until we have IPF
PPS data that include as much
information as possible regarding the
patient-level characteristics of the
population that each IPF serves. We
have begun the necessary analysis to
better understand IPF industry practices
so that we may refine the IPF PPS in the
future, as appropriate.
IPF Covered Services
The IPF PPS established the Federal
per diem base rate for each patient day
in an IPF from the national average
routine operating, ancillary, and capital
costs. Preliminary analysis reveals that
in 2012 to 2013, over 20 percent of IPF
stays show no reported ancillary costs,
such as laboratory and drug costs, in
cost reports or charges on claims. The
majority of these stays with zero
PO 00000
Frm 00035
Fmt 4701
Sfmt 4702
25045
ancillary costs or charges were in forprofit, free-standing IPF hospitals. We
would expect that patients admitted to
an IPF would undergo laboratory testing
as part of the admission history and
physical. We would also expect that
most patients requiring hospitalization
for active psychiatric treatment would
need drugs. Therefore, we were
surprised when the analysis showed
such a large number of stays reporting
no laboratory services and no drugs
were provided throughout the
hospitalization. Until further analysis is
completed, we can only surmise that the
stays did not require ancillaries and
therefore, were not provided, or that the
ancillary services were separately billed.
We remind the industry that CMS
pays only the inpatient psychiatric
facility for services furnished to a
Medicare beneficiary who is an
inpatient of that inpatient psychiatric
facility, except for certain professional
services, and that payments made under
this subpart are payments in full for all
inpatient hospital services, provided
directly or under arrangement (see 42
CFR 412.404(d)), as specified in 42 CFR
409.10.
The covered services specified in
§ 409.10(a), which apply to IPFs,
include the following: Bed and board;
nursing services and other related
services; use of hospital or CAH
facilities; medical social services; drugs,
biologicals, supplies, appliances, and
equipment; certain other diagnostic or
therapeutic services; medical or surgical
services provided by certain interns or
residents-in-training; and transportation
services, including transport by
ambulance.
Only the professional services listed
in § 409.10(b) can be separately billed
for a Medicare beneficiary who is an
inpatient at an IPF, including services of
physicians, physician assistants, nurse
practitioners, clinical nurse specialists,
certified nurse mid-wives, anesthetists,
and qualified psychologists. (see
§ 409.10(b) for specifics on how these
professions and services are defined.
These regulations are available online at
the electronic Code of Federal
Regulations, at https://www.ecfr.gov/cgibin/text-idx?c=ecfr&tpl=%2Findex.tpl.)
Ancillary costs such as laboratory
costs and drugs are already included in
the Medicare IPF PPS per diem payment
and should not be unbundled and billed
separately to Medicare. We expect that
the IPF would be recording the cost of
all drugs provided to its Medicare
patients on its Medicare cost reports,
and reporting charges for those drugs on
its Medicare claims. We expect that
when an IPF contracts with an outside
laboratory to provide services to its
E:\FR\FM\01MYP2.SGM
01MYP2
25046
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
Medicare inpatients, the IPF would
instruct the laboratory to bill the IPF
and not to bill Medicare. Similarly,
drugs provided to IPF Medicare
inpatients where Medicare is the
primary payer should not be billed to
Part D or to other insurers.
We are continuing to analyze claims
and cost report data that do not include
ancillary charges or costs, and will be
sharing our findings with the Center for
Program Integrity and the Office of
Financial Management for further
investigation, as the results warrant. Our
refinement analysis is dependent on
recent precise data for costs, including
ancillary costs. We will continue to
collect these data until an accurate
refinement analysis can be performed.
Therefore, we are not proposing
refinements in this proposed rule. Once
we have gathered timely and accurate
data, we will analyze that data with the
expectation of a refinement update in
future rulemaking. We invite comments
on this issue of zero ancillary costs to
better understand industry practices.
V. Inpatient Psychiatric Facilities
Quality Reporting (IPFQR) Program
A. Background
1. Statutory Authority
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Section 1886(s)(4) of the Act, as added
and amended by sections 3401(f) and
10322(a) of the Affordable Care Act,
requires the Secretary to implement a
quality reporting program for inpatient
psychiatric hospitals and psychiatric
units. Section 1886(s)(4)(A)(i) of the Act
requires that, for FY 2014 2 and each
subsequent fiscal year, the Secretary
must reduce any annual update to a
standard Federal rate for discharges
occurring during the rate year by 2.0
percentage points for any inpatient
psychiatric hospital or psychiatric unit
that does not comply with quality data
2 The statute uses the term ‘‘rate year’’ (RY).
However, beginning with the annual update of the
inpatient psychiatric facility prospective payment
system (IPF PPS) that took effect on July 1, 2011
(RY 2012), we aligned the IPF PPS update with the
annual update of the ICD–9–CM codes, effective on
October 1 of each year. This change allowed for
annual payment updates and the ICD–9–CM coding
update to occur on the same schedule and appear
in the same Federal Register document, promoting
administrative efficiency. To reflect the change to
the annual payment rate update cycle, we revised
the regulations at 42 CFR 412.402 to specify that,
beginning October 1, 2012, the RY update period
would be the 12-month period from October 1
through September 30, which we refer to as a
‘‘fiscal year’’ (FY) (76 FR 26435). Therefore, with
respect to the IPFQR Program, the terms ‘‘rate year’’,
as used in the statute, and ‘‘fiscal year’’ as used in
the regulation, both refer to the period from October
1 through September 30. For more information
regarding this terminology change, we refer readers
to section III. of the RY 2012 IPF PPS final rule (76
FR 26434 through 26435).
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
submission requirements with respect to
an applicable fiscal year.
As provided in section
1886(s)(4)(A)(ii) of the Act, the
application of the reduction for failure
to report under section 1886(s)(4)(A)(i)
of the Act may result in an annual
update of less than 0.0 percent for a
fiscal year, and may result in payment
rates under section 1886(s)(1) of the Act
being less than the payment rates for the
preceding year. In addition, section
1886(s)(4)(B) of the Act requires that the
application of the reduction to a
standard Federal rate update be
noncumulative across fiscal years. Thus,
any reduction applied under section
1886(s)(4)(A) of the Act will apply only
with respect to the fiscal year rate
involved and the Secretary may not take
into account the reduction in computing
the payment amount under the system
described in section 1886(s)(1) of the
Act for subsequent years.
Section 1886(s)(4)(C) of the Act
requires that, for FY 2014 (October 1,
2013, through September 30, 2014) and
each subsequent year, each psychiatric
hospital and psychiatric unit must
submit to the Secretary data on quality
measures as specified by the Secretary.
The data must be submitted in a form
and manner and at a time specified by
the Secretary. Under section
1886(s)(4)(D)(i) of the Act, measures
selected for the quality reporting
program must have been endorsed by
the entity with a contract under section
1890(a) of the Act. The National Quality
Forum (NQF) currently holds this
contract.
Section 1886(s)(4)(D)(ii) of the Act
provides that, in the case of a specified
area or medical topic determined
appropriate by the Secretary for which
a feasible and practical measure has not
been endorsed by the entity with a
contract under section 1890(a) of the
Act, the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary. Pursuant to
section 1886(s)(4)(D)(iii) of the Act, the
Secretary must publish the measures
applicable to the FY 2014 IPFQR
Program no later than October 1, 2012.
Section 1886(s)(4)(E) of the Act
requires the Secretary to establish
procedures for making public the data
submitted by inpatient psychiatric
hospitals and psychiatric units under
the IPFQR Program. These procedures
must ensure that a facility has the
opportunity to review its data prior to
the data being made public. The
Secretary must report quality measures
that relate to services furnished by the
PO 00000
Frm 00036
Fmt 4701
Sfmt 4702
psychiatric hospitals and units on the
CMS Web site.
2. Covered Entities
In the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53645), we established that
the IPFQR Program’s quality reporting
requirements cover those psychiatric
hospitals and psychiatric units paid
under Medicare’s IPF PPS (42 CFR
412.404(b)). Generally, psychiatric
hospitals and psychiatric units within
acute care and critical access hospitals
that treat Medicare patients are paid
under the IPF PPS. Consistent with
prior rules, we continue to use the term
‘‘inpatient psychiatric facility’’ (IPF) to
refer to both inpatient psychiatric
hospitals and psychiatric units. This
usage follows the terminology in our IPF
PPS regulations at § 412.402. For more
information on covered entities, we
refer readers to the FY 2013 IPPS/LTCH
PPS final rule (77 FR 53645).
3. Considerations in Selecting Quality
Measures
Our objective in selecting quality
measures is to balance the need for
information on the full spectrum of care
delivery and the need to minimize the
burden of data collection and reporting.
We have focused on measures that
evaluate critical processes of care that
have significant impact on patient
outcomes and support CMS and HHS
priorities for improved quality and
efficiency of care provided by IPFs. We
refer readers to the FY 2013 IPPS/LTCH
PPS final rule Section 4.a. (77 FR 53645
through 53646) for a detailed discussion
of the considerations taken into account
in selecting quality measures.
Before being proposed for inclusion in
the IPFQR Program, measures are placed
on a list of measures under
consideration, which is published
annually by December 1 on behalf of
CMS by the NQF. In compliance with
section 1890A(a)(2) of the Act, measures
proposed for the IPFQR Program were
included in 2 publicly available
documents: ‘‘List of Measures under
Consideration for December 1, 2013,’’
and ‘‘List of Measures under
Consideration for December 1, 2014’’
(https://www.qualityforum.org/Setting_
Priorities/Partnership/Measure_
Applications_Partnership.aspx). The
Measure Applications Partnership
(MAP), a multi-stakeholder group
convened by the NQF, reviews the
measures under consideration for the
IPFQR Program, among other Federal
programs, and provides input on those
measures to the Secretary. The MAP’s
2014 and 2015 recommendations for
quality measures under consideration
are captured in the following
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
documents: ‘‘MAP Pre-Rulemaking
Report: 2014 Recommendations on
Measures for More than 20 Federal
Programs’’ (https://
www.qualityforum.org/Publications/
2014/01/MAP_Pre-Rulemaking_Report_
_2014_Recommendations_on_
Measures_for_More_than_20_Federal_
Programs.aspx) and ‘‘Process and
Approach for MAP Pre-Rulemaking
Deliberations 2015’’ (https://
www.qualityforum.org/Publications/
2015/01/Process_and_Approach_for_
MAP_Pre-Rulemaking_Deliberations_
2015.aspx). We considered the input
and recommendations provided by the
MAP in selecting all measures for the
Program, including those discussed
below.
B. Retention of IPFQR Program
Measures Adopted in Previous Payment
Determinations
Since the inception of the IPFQR
Program in FY 2013, we have adopted
a total of 14 mandatory measures. In the
FY 2013 IPPS/LTCH PPS final rule (77
FR 53646 through 53652), we adopted
six chart-abstracted IPF quality
measures for the FY 2014 payment
determination and subsequent years. In
the FY 2014 IPPS/LTCH PPS final rule
(78 FR 50889 through 50895), we added
2 measures for the FY 2016 payment
determination and subsequent years. In
the FY 2015 IPF PPS final rule (79 FR
45963 through 45974), we finalized the
addition of 2 new measures to the
IPFQR Program to those already adopted
for the FY 2016 payment determination
and subsequent years, and finalized four
quality measures for the FY 2017
payment determination and subsequent
years.
C. Proposed Removal of HBIPS–4 From
the IPFQR Program Measure Set for the
FY 2017 Payment Determination and
Subsequent Years
We first adopted HBIPS–4 Patients
Discharged on Multiple Antipsychotic
Medications in the FY 2013 IPPS/LTCH
PPS final rule (77 FR 53649 through
53650). We refer readers to that rule for
a detailed discussion of the measure. At
the time that we adopted the measure,
it was NQF-endorsed and intended for
use in conjunction with HBIPS–5
Patients Discharged on Multiple
Antipsychotic Medications with
Appropriate Justification. However,
NQF removed its endorsement of
HBIPS–4 in January 2014. The NQF’s
Behavioral Health Steering Committee,
in its May 2014 Technical Expert Panel
Report, found that current evidence
indicated that HBIPS–4 ‘‘does not allow
for the distinction of differences in
providers . . . .’’ 3 Moreover, the
Steering Committee noted that HBIPS–
4 ‘‘is not a measure of quality of patient
care . . . and there is insufficient
evidence to warrant the endorsement of
this measure given the use of HBIPS–5,
25047
which addresses patients discharged on
multiple antipsychotic medications
with appropriate justification.’’ 4 For
these reasons, the Steering Committee
did not re-endorse HBIPS–4.
As we stated in the FY 2013 IPPS/
LTCH PPS final rule, we originally
proposed HBIPS–4, in part, because
HBIPS–4 and HBIPS–5 were intended to
be reported as a set (77 FR 53649).
However, as discussed above, NQF no
longer believes HBIPS–4 is necessary in
that set, and we agree. We have the
authority to maintain measures that are
not NQF-endorsed under section
1886(s)(4)(D)(ii) of the Act. However,
based on the loss of NQF endorsement
and because providers must still submit
data for HBIPS–5, which we believe
sufficiently includes the information
HBIPS–4 was intended to collect, we
believe removal of HBIPS–4 from the
IPFQR Program is warranted. We note
that the data collection period for FY
2016 has ended and providers are
required to submit this data before this
rule will be finalized. Therefore, FY
2017 is the first year that we would be
able to remove this measure from the
program.
In summary, Table 19, below,
identifies the measure that we are
proposing to remove beginning with the
FY 2017 payment determination. We
request comment on this proposal.
TABLE 19—IPFQR PROGRAM MEASURE PROPOSED TO BE REMOVED FOR THE FY 2017 PAYMENT DETERMINATION AND
SUBSEQUENT YEARS
NQF No.
Measure ID
N/A ..................................................
HBIPS–4 ........................................
D. New Quality Measures Proposed for
the FY 2018 Payment Determination
and Subsequent Years
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
For the FY 2018 payment
determination and subsequent years, we
are proposing five new measures. The
sections below outline our rationale for
proposing these measures.
3 Behavioral Health Endorsement Maintenance
2014, Phase 2, Technical Report, 67, (May 9, 2014).
Available at https://www.qualityforum.org/
Publications/2014/05/Behavioral_Health_
Endorsement_Maintenance_2014_-_Phase_II.aspx.
4 Ibid.
5 Centers for Disease Control and Prevention.
Annual Smoking-Attributable Mortality, Years of
Potential Life Lost, and Productivity Losses—
United States, 2000–2004.’’ Morb Mortal Wkly Rep.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
Measure
Patients Discharged on Multiple Antipsychotic Medications
Tobacco use is one of the greatest
contributors of morbidity and mortality
in the United States, accounting for
more than 435,000 deaths annually.5
Smoking is a known cause of multiple
cancers, heart disease, stroke,
complications of pregnancy, chronic
obstructive pulmonary disease, other
respiratory problems, poorer wound
healing, and many other diseases.6 This
health issue has significant implications
for persons with mental illness and
substance use disorders. Tobacco use is
much higher among people with coexisting mental health conditions than
for the general population.7 One study
has estimated that these individuals are
twice as likely to smoke as the rest of
the population.8 Tobacco use also
creates a heavy financial cost to both
individuals and society. Smoking-
2008. 57(45): 1226–1228. Available at: https://www.
cdc.gov/mmwr/preview/mmwrhtml/
mm5745a3.htm.
6 U.S. Department of Health and Human Services.
‘‘The health consequences of smoking: a report of
the Surgeon General.’’ Atlanta, GA, U.S.
Department of Health and Human Services, Centers
for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health
Promotion, Office on Smoking and Health, 2004.
7 Fiore, Michael C., Goplerud, Eric, Shroeder,
Steven A. (2010). The Joint Commission’s New
Tobacco Cessation Measures—Will Hospitals Do the
Right Thing? N Engl J Med 2012; 366:1172–1174.
Available at https://www.nejm.org/doi/full/10.1056/
nejmp1115176.
8 Lasser K, Boyd JW, Woolhandler S,
Himmelstein, DU, McCormick D, Bor DH. Smoking
and mental illness: A population-based prevalence
study. JAMA. 2000;284(20):2606–2610.
1. TOB–3 Tobacco Use Treatment
Provided or Offered at Discharge and
the Subset Measure TOB–3a Tobacco
Use Treatment at Discharge (NQF
#1656)
PO 00000
Frm 00037
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
25048
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
attributable health care expenditures are
estimated at $96 billion per year in
direct medical expenses and $97 billion
in lost productivity.9
Strong and consistent evidence
demonstrates that timely tobacco
dependence interventions for patients
using tobacco can significantly reduce
the risk of developing a tobacco-related
disease, as well as provide improved
health outcomes for those already
suffering from a tobacco-related
disease.10 Even a minimal intervention
has been shown to result in cessation.11
Research discloses that tobacco users
hospitalized with psychiatric illnesses
who enter into smoking-cessation
treatment can successfully overcome
their tobacco dependence; 12 however,
‘‘studies show that many hospitals do
not consistently provide cessation
services to their patients.’’ 13 Evidence
also suggests that tobacco cessation
treatment does not increase, and may
even decrease, the risk of rehospitalization for tobacco users
hospitalized with psychiatric
illnesses.14 Research further
demonstrates that effective tobacco
cessation support across the care
continuum can be provided with only
minimal additional provider effort and
without harm to the mental health
recovery process.15
TOB–3 (NQF #1656) is a chartabstracted measure that identifies those
patients 18 years of age and older who
have used tobacco products within 30
days of admission and who ‘‘were
9 Centers for Disease Control and Prevention.
‘‘Best Practices for Comprehensive Tobacco Control
Programs—2007.’’ Atlanta, GA, Department of
Health and Human Services, Centers for Disease
Control and Prevention, National Center for Chronic
Disease Prevention and Health Promotion, Office on
Smoking and Health, 2007.
10 U.S. Department of Health and Human
Services. ‘‘The health consequences of smoking: a
report of the Surgeon General.’’ Atlanta, GA, U.S.
Department of Health and Human Services, Centers
for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health
Promotion, Office on Smoking and Health, 2004.
11 Fiore MC, Jaen CR, Baker TB, et al. Treating
´
Tobacco Use and Dependence: 2008 Update.
Clinical Practice Guideline. Rockville, MD: U.S.
Department of Health and Human Services. Public
Health Service. May 2008, available at https://www.
ncbi.nlm.nih.gov/books/NBK63952.
12 Prochaska, JJ, et al. ‘‘Efficacy of Initiating
Tobacco Dependence Treatment in Inpatient
Psychiatry: A Randomized Controlled Trial.’’ Am.
J. Pub. Health. 2013 August 15; e1-e9.
13 Fiore, Michael C., Goplerud, Eric, Shroeder,
Steven A. (2010). The Joint Commission’s New
Tobacco Cessation Measures—Will Hospitals Do the
Right Thing? N Engl J Med 2012; 366:1172–1174,
available at https://www.nejm.org/doi/full/10.1056/
nejmp1115176.
14 Prochaska, JJ, et al. ‘‘Efficacy of Initiating
Tobacco Dependence Treatment in Inpatient
Psychiatry: A Randomized Controlled Trial.’’ Am.
J. Pub. Health. 2013 August 15; e1–e9.
15 Ibid.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
referred to or refused evidence-based
outpatient counseling AND received or
refused a prescription for FDA-approved
cessation medication upon
discharge.’’ 16 TOB–3a is a subset of
TOB–3 and identifies those IPF
‘‘patients who were referred to
evidence-based outpatient counseling
AND received a prescription for FDAapproved cessation medication upon
discharge as well as those who were
referred to outpatient counseling and
had reason for not receiving a
prescription for medication.’’ 17
Providers must report this measure set
as ‘‘an overall rate which includes all
patients to whom tobacco treatment was
provided, or offered and refused, at the
time of hospital discharge (TOB–3), and
a second rate, a subset of the first, which
includes only those patients who
received tobacco use treatment at
discharge. (TOB–3a).’’ 18 For more
information on the measure
specifications, we refer readers to the
Specifications Manual for National
Hospital Inpatient Quality Measures at
https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=QnetPublic
%2FPage%2FQnetTier4&cid=122877
3989482. Providing counseling and
recommending cessation medication are
core strategies of the Treating Tobacco
Use and Dependence Guidelines.19 For
the reasons stated above, we believe that
adoption of the TOB–3/TOB–3a
measure set, which assesses IPFs’
offering of these tobacco use cessation
treatments to IPF patients, would result
in better overall health outcomes for IPF
patients.
Furthermore, the adoption of this
measure set would strengthen related
measures already in place in the IPFQR
Program. Currently, the IPFQR Program
includes 2 other tobacco cessation
measures: (1) Tobacco Use Screening
(TOB–1), a chart-abstracted measure
that assesses hospitalized patients who
are screened within the first 3 days of
admission for tobacco use (cigarettes,
smokeless tobacco, pipe, and cigar)
within the previous 30 days; and (2) The
Tobacco Use Treatment Provided or
Offered (TOB–2), which includes the
16 TOB–3 and TOB–3a Measure Specifications,
available at https://www.jointcommission.org/assets/
1/6/HIQR_Jan2015_v4_4a_1_EXE.zip
17 Ibid.
18 TOB–3 and TOB–3a Measure Specifications,
available at https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=QnetPublic%2FPage
%2FQnetTier4&cid=1228773989482.
19 See Fiore MC, Jaen CR, Baker TB, et al. Treating
´
Tobacco Use and Dependence: 2008 Update.
Clinical Practice Guideline. Rockville, MD: U.S.
Department of Health and Human Services. Public
Health Service. May 2008. Available at https://www.
ncbi.nlm.nih.gov/books/NBK63952. The specific
strategy is further specified in Strategy 4A.
PO 00000
Frm 00038
Fmt 4701
Sfmt 4702
subset, Tobacco Use Treatment (TOB–
2a). TOB–2/TOB–2a is a chartabstracted measure set reported as an
overall rate that includes all patients to
whom tobacco use treatment was
provided, or offered and refused, and a
second rate, a subset of the first, which
includes only those patients who
received tobacco use treatment. TOB–1
and TOB–2/TOB–2a provide a picture of
care given during the hospital stay. In
contrast, TOB–3/TOB–3a present the
care given at discharge. Together, these
3 measures/measure sets present a
broader picture of the entire episode of
care. If the TOB–3/TOB–3a measure set
is adopted, the IPFQR Program’s
measure set would showcase both the
facility’s practice of screening patients
for tobacco use and the outcomes of a
facility’s practice of offering
opportunities to stop during the course
of the stay and upon discharge. Further,
the adoption of TOB–3/TOB–3a could
alert IPFs to gaps in treatment for
smoking cessation intervention at
discharge if rates for these measures are
low. This knowledge would support the
development of quality improvement
plans and better engage patients in
treatment.
We believe that public reporting of
this information would provide
consumers and other stakeholders with
useful information in choosing among
different facilities for patients who use
tobacco products. In addition, this
measure set promotes the National
Quality Strategy priority of Effective
Prevention and Treatment, particularly
with respect to the leading causes of
mortality, starting with cardiovascular
disease. As noted above, tobacco use is
one of the greatest contributors of
morbidity and mortality in the United
States,20 contributing to various forms
of cardiovascular disease, among many
other conditions.21 ‘‘Tobacco use
remains the chief preventable cause of
illness and death in our society.’’ 22
Cessation interventions can significantly
20 Centers for Disease Control and Prevention.
Annual Smoking-Attributable Mortality, Years of
Potential Life Lost, and Productivity Losses—
United States, 2000–2004.’’ Morb Mortal Wkly Rep.
2008. 57(45): 1226–1228. Available at: https://www.
cdc.gov/mmwr/preview/mmwrhtml/
mm5745a3.htm.
21 U.S. Department of Health and Human
Services. ‘‘The health consequences of smoking: a
report of the Surgeon General.’’ Atlanta, GA, U.S.
Department of Health and Human Services, Centers
for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health
Promotion, Office on Smoking and Health, 2004.
22 Fiore, Michael C., Goplerud, Eric, Shroeder,
Steven A. (2010). The Joint Commission’s New
Tobacco Cessation Measures—Will Hospitals Do the
Right Thing? N Engl J Med 2012; 366:1172–1174
Available at: https://www.nejm.org/doi/full/10.1056/
nejmp1115176.
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
reduce the risk of developing tobaccorelated disease,23 leading to decreases in
cardiovascular disease, among other
diseases, and, ultimately, mortality.
Encouraging intervention would
promote effective treatment of tobacco
use, and may contribute to prevention of
the many diseases that are associated
with tobacco use.
For these reasons, we included TOB–
3/TOB–3a in our ‘‘List of Measures
under Consideration for December 1,
2014.’’ The MAP provided input on the
measure set and supported its inclusion
in the IPFQR Program in its report
‘‘Process and Approach for MAP PreRulemaking Deliberations 2015’’
available at https://www.qualityforum.
org/WorkArea/linkit.aspx?Link
Identifier=id&ItemID=78711. Moreover,
this measure set is NQF-endorsed for
the IPF setting in conformity with the
statutory criteria for measure selection
under section 1886(s)(4)(D)(i) of the Act.
We invite public comments on our
proposal to adopt the TOB–3 and TOB–
3a measure set for the FY 2018 payment
determination and subsequent years.
2. SUB–2 Alcohol Use Brief Intervention
Provided or Offered and SUB–2a
Alcohol Use Brief Intervention (NQF
#1663)
Individuals with mental health
conditions experience substance use
disorders (SUDs) at a much higher rate
than the general population. Individuals
with the most serious mental illnesses
have the highest rates of SUDs. Cooccurring SUDs often go undiagnosed
and, without treatment, contribute to a
longer persistence of disorders, poorer
treatment outcomes, lower rates of
medication adherence, and greater
impairments to functioning.
Substance abuse, particularly alcohol
abuse, is a significant problem in the
elderly. Alcohol use disorders are the
most prevalent type of addictive
disorder in individuals ages 65 and
over.24 Roughly 6 percent of the elderly
are considered to be heavy users of
alcohol.25 Alcohol abuse is often
associated with depression and
contributes to the etiology of many
serious medical conditions, including
liver disease and cardiovascular disease.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
23 U.S.
Department of Health and Human
Services. ‘‘The health consequences of smoking: a
report of the Surgeon General.’’ Atlanta, GA, U.S.
Department of Health and Human Services, Centers
for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health
Promotion, Office on Smoking and Health, 2004.
24 Ross, S. (2005). Alcohol Use Disorders in the
Elderly. Primary Psychiatry, 12(1):32–40.
25 AL Mirand and JW Welte. Alcohol
consumption among the elderly in a general
population, Erie County, New York. Am J Public
Health. 1996 July; 86(7): 978–984.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
For these reasons, it is important to
assess IPFs’ efforts to offer alcohol abuse
treatment to those patients who screen
positive for alcohol abuse.
SUB–2 includes ‘‘[p]atients 18 years
of age and older who screened positive
for unhealthy alcohol use who received
or refused a brief intervention during
the hospital 26 stay.’’ 27 SUB–2a includes
‘‘[p]atients who received the brief
intervention during the hospital
stay.’’ 28 The measure set is chartabstracted and ‘‘is reported as an overall
rate which includes all patients to
whom a brief intervention was
provided, or offered and refused, and a
second rate, a subset of the first, which
includes only those patients who
received a brief intervention.’’ 29 For
more information on the measure
specifications, we refer readers to the
Specifications Manual for National
Hospital Inpatient Quality Measures at
https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=
QnetPublic%2FPage
%2FQnetTier4&cid=1228773989482.
We believe that the addition of the
SUB–2/SUB–2a measure set to the
related existing substance abuse
measure in the IPFQR Program would
improve the overall quality of care that
patients receive in IPF settings, as well
as overall patient health outcomes. We
previously adopted the SUB–1 measure
(Alcohol Use Screening (SUB–1) (NQF
#1661)) (78 FR 50890 through 50892).
SUB–1 assesses ‘‘hospitalized patients
18 years of age and older who are
screened during the hospital stay using
a validated screening questionnaire for
unhealthy alcohol use.’’ SUB–1 alone
does not provide a full picture of an
IPF’s response to this screening.
However, when linked to SUB–2/SUB–
2a, the IPF measure set depicts the rate
at which patients are screened for
potential alcohol abuse and the rate at
which those who screen positive accept
the offered interventions. Further, the
adoption of SUB–2/SUB 2a could alert
IPFs to gaps in treatment for
interventions if rates are low, which
supports the development of quality
improvement plans and better patient
engagement in treatment. In addition,
26 Although the measure refers to ‘‘hospitals,’’ the
measure is specified for all in-patient settings.
https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%
2FPage%2FQnetTier4&cid=1228773989482.
27 SUB–2 and SUB–2a Measure Specifications,
available at https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%
2FPage%2FQnetTier4&cid=1228773989482.
28 Ibid.
29 SUB–2 and SUB–2a Measure Specifications,
available at https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%
2FPage%2FQnetTier4&cid=1228773989482.
PO 00000
Frm 00039
Fmt 4701
Sfmt 4702
25049
data for the SUB–2/SUB–2a measure set,
in combination with the SUB–1
measure, would afford consumers useful
information in choosing among different
facilities, particularly for patients who
may require assistance with unhealthy
alcohol use.
Additionally, we believe that this
measure set promotes the National
Quality Strategy priority of Effective
Prevention and Treatment for the
leading causes of mortality, starting
with cardiovascular disease. As noted
above, alcohol use disorders are the
most prevalent type of addictive
disorder in individuals ages 65 and
over 30 and contribute to serious medical
conditions, including cardiovascular
disease and liver disease. Encouraging
interventions would promote treatment
of unhealthy alcohol use and may
contribute to prevention of the many
diseases that are associated with alcohol
abuse, including cardiovascular disease.
For these reasons, we included the
SUB–2/SUB–2a measure set in our ‘‘List
of Measures under Consideration for
December 1, 2014.’’ The MAP provided
input on the measure set and supported
its inclusion in the IPFQR Program in its
report ‘‘Process and Approach for MAP
Pre-Rulemaking Deliberations 2015’’
available at https://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=
id&ItemID=78711. Moreover, this
measure set is NQF-endorsed for the IPF
setting, in conformity with the statutory
criteria for measure selection under
section 1886(s)(4)(D)(i) of the Act.
We invite public comments on our
proposal to adopt the SUB–2/SUB–2a
measure set for the FY 2018 payment
determination and subsequent years.
3. Transition Record With Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0647) and Removal
of HBIPS–6
Effective and timely communication
of a patient’s clinical status and other
relevant information at the time of
discharge from an inpatient facility is
essential for supporting appropriate
continuity of care. Establishment of an
effective transition from one treatment
setting to another is enhanced by
providing patients and their caregivers
with sufficient information regarding
treatment during hospitalization.
Receiving discharge instructions can
assist the patient in understanding how
30 Stephen Ross. Alcohol Use Disorders in the
Elderly. Psychiatry Weekly (no date). Available at:
https://www.psychweekly.com/aspx/article/
ArticleDetail.aspx?articleid=19.
E:\FR\FM\01MYP2.SGM
01MYP2
25050
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
to maintain and enhance his/her care
when discharged to home or any other
site, and studies have shown that
readmissions can be prevented by
providing detailed, personalized
information to patients pre-discharge.31
The Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from on Inpatient
Facility to Home/Self Care or Any other
Site of Care) measure is a chartabstracted measure that captures the
‘‘[p]ercentage of patients, regardless of
age, discharged from an inpatient
facility to home or other site of care, or
their caregiver(s), who received a
transition record (and with whom a
review of all included information was
documented) at the time of
discharge.’’ 32 At a minimum, the
transition record should include:
• Reason for inpatient admission;
• Major procedures and tests
performed during inpatient stay and
summary of results;
• Principal diagnosis at discharge;
• Current medication list;
• Studies pending at discharge;
• Patient instructions;
• Advance directive or surrogate
decision maker documented or reason
for not providing advance care plan;
• 24-hour/7-day contact information,
including physician for emergencies
related to inpatient stay;
• Contact information for obtaining
results of studies pending at discharge;
• Plan for follow-up care; and
• Primary physician, other health
care professional, or site designated for
follow-up care.33
The measure was developed by the
American Medical Association—
convened Physician Consortium for
Performance Improvement (AMAconvened PCPI), ‘‘a national, physicianled initiative dedicated to improving
patient health and safety.’’ 34 For more
information on this measure, including
its specifications, we refer the readers to
31 Jack BW, Chetty VK, Anthony D, et al. A
reengineered hospital discharge program to
decrease rehospitalization. Ann Intern Med 2009;
150:178–187.
32 Transition Record with Specified Elements
Received by Discharged Patients (Discharges from
an Inpatient Facility to Home/Self Care or Any
Other Site of Care) Measure Specifications.
Available at https://www.qualityforum.org/Qps/
0647.
33 Ibid.
34 See https://www.ama-assn.org/ama/pub/
physician-resources/physician-consortiumperformance-improvement/about-pcpi.page? The
AMA–PCPI ‘‘is nationally recognized for measure
development, specification and testing of measures,
and enabling use of measures in electronic health
records (EHRs) . . . [the organization] develops,
tests, implements and disseminates evidence-based
measures that reflect the best practices and best
interest of medicine . . .’’
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
the AMA-convened PCPI list of
measures at https://www.qualityforum.
org/Qps/0647.
The Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any other
Site of Care) measure seeks to prevent
gaps in care transitions caused by the
patient receiving inadequate or
insufficient information that lead to
avoidable adverse events and cost CMS
approximately $15 billion due to
avoidable patient readmissions.35
We believe that public reporting of
this measure would afford patients and
their families or caregivers useful
information in choosing among different
facilities and would promote the
National Quality Strategy priority of
Communication and Care Coordination.
As articulated by HHS, ‘‘Care
coordination is a conscious effort to
ensure that all key information needed
to make clinical decisions is available to
patients and providers. It is defined as
the deliberate organization of patient
care activities between 2 or more
participants involved in a patient’s care
to facilitate appropriate delivery of
health care services.’’ 36 This proposed
measure would promote appropriate
care coordination by specifying that
patients discharged from an inpatient
facility receive relevant and meaningful
transition information. This measure
also would promote Person and Family
Engagement, ‘‘a set of behaviors by
patients, family members, and health
professionals and a set of organizational
policies and procedures that foster both
the inclusion of patients and family
members as active members of the
health care team and collaborative
partnerships with providers and
provider organizations.’’ 37 This
proposed measure would inform
patients of their status at discharge,
empowering them to become active
members in their care. Additionally, the
inclusion in this measure of an advance
care plan would support open
communication of the patient’s, and his/
her caregiver’s/surrogate’s, wishes,
resulting in improved patient-provider
communication.
For these reasons, we included this
measure in our ‘‘List of Measures under
Consideration for December 1, 2014.’’
The MAP provided input on the
measure and supported its inclusion in
the IPFQR Program in its report
‘‘Process and Approach for MAP PreRulemaking Deliberations 2015’’
available at https://www.qualityforum.
org/WorkArea/linkit.aspx?Link
Identifier=id&ItemID=78711. In
addition, the MAP had previously
suggested this measure as one that could
fill a gap in communication between the
provider and patient at discharge 38 and
recommended that the measure be used
for dual eligible patients (that is,
patients with both Medicare and
Medicaid coverage), who comprise a
significant beneficiary population
served within IPFs.39 Moreover, this
measure set is NQF-endorsed for the IPF
setting, in conformity with the statutory
criteria for measure selection under
section 1886(s)(4)(D)(i) of the Act.
If finalized, we propose that this
measure would replace the existing
HBIPS–6 Post-Discharge Continuing
Care Plan measure.40 We believe that
the Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) measure is a more effective
and robust measure than HBIPS–6 for
use in the IPF setting. Specifically,
HBIPS–6 requires discharge plans to
only have 4 components:
• Reason for hospitalization;
• Principal diagnosis;
• Discharge medications; and
• Next level of care
recommendations.41
In contrast, the Transition Record
with Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure
requires additional elements, including
those described below, which are
intended to improve quality of care,
decrease costs, and increase beneficiary
engagement.
First, the proposed measure requires
the provider to communicate both
studies pending at discharge as well as
contact information so that patients or
their families can obtain the results of
those studies. Approximately 40 percent
of discharged patients have test results
35 Medicare Payment Advisory Commission.
Promoting Greater Efficiency in Medicare. June
2007. Available at: https://www.medpac.gov/
documents/reports/Jun07_EntireReport.pdf.
36 US DHHS. ‘‘National Healthcare Disparities
Report 2013.’’ Available at: https://www.ahrq.gov/
research/findings/nhqrdr/nhdr13/chap7.html.
37 Guide to Patient and Family Engagement:
Environmental Scan Report. May 2012. Agency for
Healthcare Research and Quality. Rockville, MD.
Available at: https://www.ahrq.gov/research/
findings/final-reports/ptfamilyscan/ptfamily1.html.
38 https://www.qualityforum.org/Publications/
2012/10/MAP_Families_of_Measures.aspx.
39 https://www.qualityforum.org/Publications/
2014/08/2014_Input_on_Quality_Measures_for_
Dual_Eligible_Beneficiaries.aspx.
40 In the FY 2013 IPPS/LTCH PPS final rule, we
adopted HBIPS–6, beginning with the FY 2014
payment determination (77 FR 53650–53651). We
refer readers to that rule for a detailed discussion
of this measure.
41 See https://manual.jointcommission.org/
releases/TJC2014A1/.
PO 00000
Frm 00040
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
that are pending and about a quarter of
such test results require further action
that, if not taken in a timely manner,
could result in potentially avoidable
negative outcomes.42 HBIPS–6 does not
require providers to specify studies
pending at discharge.
Second, the transition record is also
required to contain a list of major
procedures and tests that were
performed during the hospitalization
and summary results. HBIPS–6 does not
include this requirement. We believe it
is important for a patient to understand
which tests were performed on him/her
and for what purpose, understanding
the outcome and consequences of these
tests. This knowledge may serve to
empower patients to seek additional
care or follow-up when necessary,
reducing the risk of avoidable
consequences and readmissions.
Third, the transition record in the
proposed measure is required to include
patient instructions while HBIPS–6 has
no such requirement. Without
instructions, the patient may not take
the necessary steps for recovery, leading
to complications and/or readmissions.
Fourth, the proposed measure
requires both of the following: (1) 24hour/7-day contact information
including physicians for emergencies
related to inpatient stay; and (2) the
primary physician, other health care
professional, or sites designated for
follow-up care. HBIPS–6 does not have
these requirements. Again, this
information can lead to reduced
complications and an increased
likelihood of appropriate follow-up
care, resulting in reduced readmissions.
Finally, the elements required for the
proposed transition record measure are
far better aligned than HBIPS–6 with the
elements required in the Summary of
Care record required by the Electronic
Health Record (EHR) Incentive Program
for eligible hospitals and critical access
hospitals and with the guidance on
discharge planning provided by the
Medicare Learning Network available at
https://www.cms.gov/Outreach-andEducation/Medicare-Learning-NetworkMLN/MLNProducts/Downloads/
Discharge-Planning-BookletICN908184.pdf.
In summary, we believe that the
Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) measure is more robust
than HBIPS–6 because it includes these
42 Kripalani S, LeFevre F, Phillips CO, et al.
Deficits in communication and information transfer
between hospital based and primary care
physicians: implications for patient safety and
continuity of care. JAMA2007;297(8):831–841.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
and other elements that are currently
absent from HBIPS–6. Therefore, we
propose to adopt the Transition Record
with Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure for the
FY 2018 payment determination and
subsequent years, and, if adopted, to
remove HBIPS–6. We invite public
comments on these proposals.
4. Timely Transmission of Transition
Record (Discharges From an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0648) and Removal
of HBIPS–7
The literature shows infrequent
communication between hospital
physicians and primary care
practitioners and that the availability of
discharge summaries at the patient’s
first post-discharge visit with the
primary care practitioner is low, which
affects the quality of care provided to
patients.43 The Timely Transmission of
Transition Record (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure (NQF
#0648) is a chart-abstracted measure
developed by AMA-convened PCPI to
narrow gaps in care transition that result
in adverse health outcomes for patients
and cost CMS about $15 billion due to
readmissions,44 as discussed above.
This measure captures the ‘‘[p]ercentage
of patients, regardless of age, discharged
from an inpatient facility to home or any
other site of care for whom a transition
record was transmitted to the facility or
primary physician or other health care
professional designated for follow-up
care within 24 hours of discharge.’’ 45
For more information on this measure,
including its specifications, we refer the
readers to https://www.qualityforum.org/
Qps/0648.
We believe that public reporting of
this measure will afford consumers, and
their families or caregivers, useful
information in choosing among different
facilities because it communicates how
quickly a summary of the patient’s
record will be transmitted to his or her
other treating facilities and physicians,
improving care, as outlined above. We
43 Kripalani S, LeFevre F, Phillips CO, et al.
Deficits in communication and information transfer
between hospital based and primary care
physicians: implications for patient safety and
continuity of care. JAMA 2007;297(8):831–841.
44 Medicare Payment Advisory Commission.
Promoting Greater Efficiency in Medicare. June
2007. Available at: https://www.medpac.gov/
documents/reports/Jun07_EntireReport.pdf.
45 Timely Transmission of Transition Record
(Discharged from Inpatient Facility to Home/Self
Care or Any Other Site of Care), available at https://
www.ama-assn.sorg/apps/listserv/x-check/
qmeasure.cgi?submit=PCPI.
PO 00000
Frm 00041
Fmt 4701
Sfmt 4702
25051
further believe that this measure will
promote the National Quality Strategy
priority of Communication and Care
Coordination. As discussed above,
according to HHS, ‘‘Care coordination is
a conscious effort to ensure that all key
information needed to make clinical
decisions is available to patients and
providers. It is defined as the deliberate
organization of patient care activities
between 2 or more participants involved
in a patient’s care to facilitate
appropriate delivery of health care
services.’’ 46 This proposed measure
enables a patient’s primary care
physician or other healthcare
practitioner to timely receive a
transition record of the inpatient
hospitalization.
For these reasons, we included this
measure in our ‘‘List of Measures under
Consideration for December 1, 2014.’’
The MAP provided input on the
measure and supported its inclusion in
the IPFQR Program (https://www.quality
forum.org/WorkArea/linkit.aspx?Link
Identifier=id&ItemID=78711). In
addition, the MAP had previously
suggested this measure as one that could
fill a gap in communication 47 and
recommended that the measure be used
for dual eligible patients (that is,
patients with both Medicare and
Medicaid coverage), who comprise a
significant beneficiary population
served within IPFs.48 Moreover, this
measure set is NQF-endorsed for the IPF
setting, in conformity with the statutory
criteria for measure selection under
section 1886(s)(4)(D)(i) of the Act.
If finalized, we propose that this
measure would replace the existing
HBIPS–7 Post Discharge Continuing
Care Plan Transmitted to the Next Level
of Care Provider Upon Discharge
measure.49 HBIPS–7 requires that the
continuing care plan be transmitted to
the next care provider no later than the
fifth day post discharge.50 The Timely
Transmission of Transition Record
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) measure requires transmission to
the next level of care within 24 hours
46 US DHHS. ‘‘National Healthcare Disparities
Report 2013.’’ Available at: https://www.ahrq.gov/
research/findings/nhqrdr/nhdr13/chap7.html.
47 https://www.qualityforum.org/Publications/
2012/10/MAP_Families_of_Measures.aspx.
48 https://www.qualityforum.org/Publications/
2014/08/2014_Input_on_Quality_Measures_for_
Dual_Eligible_Beneficiaries.aspx.
49 In the FY 2013 IPPS/LTCH PPS final rule, we
adopted HBIPS–7 Post Discharge Continuing Care
Plan Transmitted to the Next Level of Care Provider
Upon Discharge, beginning with the FY 2014
payment determination (77 FR 53651–53652). We
refer readers to that rule for a detailed discussion
of this measure.
50 https://manual.jointcommission.org/releases/
TJC2014A1/.
E:\FR\FM\01MYP2.SGM
01MYP2
25052
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
of discharge. More timely
communication of vital information
regarding the inpatient hospitalization
results in better care, reduction of
systemic medical errors, and improved
patient outcomes. Studies show that the
risks of re-hospitalization are lower
when primary care providers have
access to patients’ post-discharge
records at the first post-discharge
visit,51 52 which may be within a day (or
days) of discharge. Critically, the
availability of the discharge record to
the next level provider within 24 hours
after discharge supports more effective
care coordination and patient safety,
since a delay in communication can
result in medication or treatment errors.
Thus, we believe that replacing HBIPS–
7 with the Timely Transmission of
Transition Record (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure would
increase the quality of care provided to
patients, reduce avoidable readmissions,
and increase patient safety.
We invite public comments on our
proposals to adopt the Timely
Transmission of Transition Record
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) measure for the FY 2018 payment
determination and subsequent years
and, if adopted, our removal of HBIPS–
7.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
5. Screening for Metabolic Disorders
Studies show that both second
generation antipsychotics (SGAs) and
antipsychotics increase the risk of
metabolic syndrome.53 Metabolic
syndrome involves a cluster of
conditions that occur together,
including excess body fat around the
waist, high blood sugar, high
cholesterol, and high blood pressure,
and increases the risk of coronary artery
disease, stroke, and type 2 diabetes.
Recognizing this problem, in February
2004, the American Diabetes
Association (ADA), the American
Psychiatric Association (APA), the
American Association of Clinical
Endocrinologists, and the North
51 van Walraven C, Seth R, Austin PC, Laupacis
A. (2002). Effect of discharge summary availability
during postdischarge visits on hospital readmission.
Journal of General Internal Medicine 17:186–192.
52 Jack BW, Chetty VK, Anthony D, et al. (2009).
A reengineered hospital discharge program to
decrease rehospitalization. Ann Intern Med.150
(3),178–187.
53 The American Diabetes Association, APA, the
American Association of Clinical Endocrinologists,
and the North American Association for the Study
of Obesity (2004). Consensus development
conference on antipsychotic drugs and obesity and
diabetes. Diabetes Care, 27, 596–601. Marder,
Stephen R., M.D., et al. Physical Health Monitoring
of Patients with Schizophrenia. Am J Psychiatry.
2004 Aug;161(8):1334–49.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
American Association for the Study of
Obesity released a consensus statement
finding that the use of SGAs ‘‘have been
associated with reports of dramatic
weight gain, diabetes (even acute
metabolic decompensation, for example,
diabetic ketoacidosis [DKA]), and an
atherogenic lipid profile (increased LDL
cholesterol and triglyceride levels and
decreased HDL cholesterol) . . . [and]
[s]ubsequent drug surveillance and
retrospective database analyses suggest
that there is an association between
specific SGAs and both diabetes and
obesity.’’ 54 SGAs also have an effect on
serum lipids and could result in
dyslipidemia.55 Given these concerns,
the group recommended that ‘‘baseline
screening measures be obtained before,
or as soon as clinically feasible after, the
initiation of any antipsychotic
medication,’’ including body mass
index (BMI), blood pressure, fasting
plasma glucose, and fasting lipid
profile.56 Although the consensus
statement specifically discussed the
issues with SGAs, the ADA also
emphasized that ‘‘all patients receiving
antipsychotic medications [should] be
screened’’ 57 and subsequent studies
have found that ‘‘[i]n schizophrenic
patients, the level of lipid profile had
been increased in both atypical and
conventional antipsychotic users’’ 58
Numerous other organizations have
also made similar recommendations.59
For example, the National Association
of State Mental Health Program
Directors Medical Directors Council
notes, ‘‘the second generation
antipsychotic medications have become
more highly associated with weight
gain, diabetes, dyslipidemia, insulin
54 The American Diabetes Association, APA, the
American Association of Clinical Endocrinologists,
and the North American Association for the Study
of Obesity (2004). Consensus development
conference on antipsychotic drugs and obesity and
diabetes. Diabetes Care, 27, 596–601.
55 Ibid.
56 Ibid.
57 The American Diabetes Association (2006).
Antipsychotic Medications and the Risk of Diabetes
and Cardiovascular Disease. Available at: https://
professional.diabetes.org/admin/UserFiles/file/CE/
AntiPsych%20Meds/Professional%20Tool%20%2
31(1).pdf (emphasis added).
58 Roohafsza, H, Khani, A, Afshar, H,
Garakyaraghi, A, Ghodsi, B. Lipid profile in
antipsychotic drug users: A comparative study.
ARYA Atheroscler. May 2013; 9(3): 198–202
(emphasis added).
59 De Hert, M., Dekker, J.M. & Wood, D. (2009).
Cardiovascular disease and diabetes in people with
severe mental illness. Position statement from the
European Psychiatric Association (EPA), supported
by the European Association for the Study of
Diabetes (EASD) and the European Society of
Cardiology (ESC). Eur Psychiatry, 24, 412–424;
Zolnierek, C.D. (2009). Non-psychiatric
hospitalization of people with mental illnesses: A
systematic review. Journal of Advanced Nursing,
65(8), 1570–1583.
PO 00000
Frm 00042
Fmt 4701
Sfmt 4702
resistance, and the metabolic
syndrome.’’ They recommend the same
screening as the consensus statement
(BMI, blood pressure, fasting plasma
glucose, and fasting lipid profile) and
emphasize that this screening is ‘‘the
standard of care for the general
population.’’ 60 Likewise, the Mount
Sinai Conference,61 convened in 2002,
recommended that, for every patient
with schizophrenia, ‘‘regardless of the
antipsychotic prescribed,’’ mental
health providers should, among other
things: (1) Monitor and chart BMI; (2)
measure plasma glucose levels (fasting
or HbA1c); and (3) obtain a lipid
profile.62
Despite these consensus statements
and guidelines, many of which are over
a decade old, screening for metabolic
syndrome remains low and there
appears to be disagreement regarding
where the responsibility for this
screening lies.63 Studies show a
systematic lack of metabolic risk
monitoring of patients who have been
prescribed antipsychotics.64 Screening
for metabolic syndrome may reduce the
risk of preventable adverse events and
improve the physical health status of
the patient. Therefore, we believe it is
necessary to include a measure of
metabolic syndrome screening in the
IPFQR Program.
The Screening for Metabolic Disorders
measure is a chart-abstracted measure
60 National Association of State Mental Health
Program Directors Medical Directors Council
(2006). Morbidity and mortality in people with
serious mental illness. Available at: https://www.
nasmhpd.org/docs/publications/MDCdocs/
Mortality%20and%20Morbidity%20Final%20
Report%208.18.08.pdf.
61 The Mount Sinai Conference was conferred to
‘‘focus on specific questions regarding the
pharmacotherapy of schizophrenia . . . Participants
in the conference were selected based on their
knowledge of and contributions to the literature in
this area . . . Also in attendance [were] various
groups concerned with improving
psychopharmacology in routine practice settings.’’
Marder, Stephen R., M.D., et al. Physical Health
Monitoring of Patients with Schizophrenia. Am J
Psychiatry. 2004 Aug;161(8):1334–49.
62 Marder, Stephen R., M.D., et al. Physical Health
Monitoring of Patients with Schizophrenia. Am J
Psychiatry. 2004 Aug;161(8):1334–49.
63 See e.g., Brooks, Megan. ‘‘Metabolic Screening
in Antipsychotic Users: Whose Job Is It?’’ Medscape
Medical News. 8 May 2012. Available at https://
www.medscape.com/viewarticle/763468. Mittal D,
Li C, Viverito K, Williams JS, Landes RD, Thapa PB,
Owen R. Monitoring for metabolic side effects
among outpatients with dementia receiving
antipsychotics. Psychiatr Serv. 2014 Sep
1;65(9):1147–53.
64 Nasrallah, H. A, MD (2012). There is no excuse
for failing to provide metabolic monitoring for
patients receiving antipsychotics. Current
Psychiatry, 4 (citing Mitchell AJ, Delaffon V,
Vancampfort D, et al. Guideline concordant
monitoring of metabolic risk in people treated with
antipsychotic medication: systematic review and
meta-analysis of screening practices. Psychol Med.
2012;42(1):125–147.)
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
developed by CMS and defined as a
percentage of discharges from an IPF for
which a structured metabolic screening
for 4 elements was completed in the
past year. The denominator includes IPF
patients discharged with one or more
routinely scheduled antipsychotic
medications during the measurement
period. The numerator is the total
number of patients who received a
metabolic screening either prior to, or
during, the index IPF stay. The
screening must contain four tests: (1)
BMI; (2) blood pressure; (3) glucose or
HbA1c; and (4) a lipid panel—which
includes total cholesterol (TC),
triglycerides (TG), high density
lipoprotein (HDL), and low density
lipoprotein (LDL–C) levels. The
screening must have been completed at
least once in the 12 months prior to the
patient’s date of discharge. Screenings
can be conducted either at the reporting
facility or another facility for which
records are available to the reporting
facility. The following patients are
excluded from the measure: (1) Patients
for whom a screening could not be
completed within the stay due to the
patient’s enduring unstable medical or
psychological condition; and (2)
patients with a length of stay equal to
or greater than 365 days, or less than 3
days. In section F.3. below, we propose
a sampling methodology for this and
certain other measures.
Testing of this measure demonstrated
that performance on the metabolic
screening measure was low, on average,
across the tested IPFs. The measure’s
average performance rate of 42 percent
signals a strong opportunity for
improvement. During testing, the
metabolic screening measure also
demonstrated nontrivial variation in
performance among IPFs (6.2–98.6
percent). In addition, it demonstrated
near-perfect agreement between chart
abstractors (kappa of 0.93 for the
measure numerator).65
We included the Screening for
Metabolic Disorders measure (then
titled ‘‘IPF Metabolic Screening’’) in our
‘‘Measures Under Consideration List’’ in
December 2013. The MAP did not
recommend this measure, noting, ‘‘a
different NQF-endorsed measure better
addresses the needs of the program.’’ 66
However, the different NQF-endorsed
measure was not identified by the MAP,
and we are unaware of any screening
measures for metabolic syndrome that
are NQF-endorsed. We note that, when
presented to the MAP, the denominator
for this measure was the ‘‘total number
of psychiatric inpatients admitted
during the measurement period.’’ Based
on testing and further feedback on the
measure, we revised the measure by
reducing its application to only those
patients on antipsychotic medication;
the denominator for the measure is now
‘‘IPF patients discharged with one or
more routinely scheduled antipsychotic
medications during the measurement
period.’’ We believe that this change
was appropriate because, as discussed
above, the patients most at risk for
metabolic syndrome are those receiving
antipsychotics and the APA and other
consensus organizations recommend
this screening for patients on
antipsychotics. Furthermore, by limiting
the application of the measure only to
those receiving antipsychotics, we
believe that we have reduced provider
burden, both in terms of possible
changes in practice that might result
25053
from the measure, as well as the direct
burden resulting from its collection and
reporting.
We believe that this measure
promotes the National Quality Strategy
priority of Making Care Safer, which
seeks to reduce risk that is caused by the
delivery of healthcare. As discussed
above, antipsychotics have been shown
to be related to metabolic syndrome.
The Screening for Metabolic Disorders
measure is aimed at the prevention and
treatment of serious side effects of these
drugs.
Section 1886(s)(4)(D)(ii) of the Act
authorizes the Secretary to specify a
measure that is not endorsed by NQF as
long as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary. We have
been unable to identify any measures
addressing screening for metabolic
syndrome for the IPF setting that have
been endorsed by the NQF or adopted
by any other consensus organization.
We believe the proposed measure for
the Screening for Metabolic Disorders
meets the measure selection exception
requirement under section
1886(s)(4)(D)(ii) of the Act.
We invite public comments on our
proposal to adopt this measure for the
FY 2018 payment determination and
subsequent years.
6. Summary of Measures Proposed for
Adoption and Removal for FY 2018 and
Subsequent Years
The measures that we are proposing
to add to the IPFQR Program for the FY
2018 payment determination and
subsequent years are set forth in Table
20, below.
TABLE 20—IPFQR PROGRAM MEASURES PROPOSED FOR THE FY 2018 PAYMENT DETERMINATION AND SUBSEQUENT
YEARS
National Quality Strategy priority
NQF No.
Measure ID
1656
TOB–3 and
TOB–3a.
Effective Prevention and Treatment ................
1663
Communication and Care Coordination; Person and Family Engagement.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Effective Prevention and Treatment ................
0647
SUB–2 and
SUB–2a.
N/A .................
Communication and Care Coordination ...........
0648
N/A .................
65 Development of Quality Measures for Inpatient
Psychiatric Facilities. February 2015. U.S.
Department of Health and Human Services,
Assistant Secretary for Planning and Evaluation,
Office of Disability, Aging, and Long-term Care
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
Measure
Tobacco Use Treatment Provided or Offered at Discharge
and the subset measure Tobacco Use Treatment at Discharge.
Alcohol Use Brief Intervention Provided or Offered and SUB–
2a Alcohol Use Brief Intervention.
Transition Record with Specified Elements Received by Discharged
Patients (Discharges from an Inpatient Facility to Home/Self
Care or
Any Other Site of Care).
Timely Transmission of Transition Record (Discharges from
an
Inpatient Facility to Home/Self Care or Any Other Site of
Care).
Policy. Page xi, at https://aspe.hhs.gov/daltcp/
reports/2015/ipf.cfm.
66 MAP 2014 Recommendations on Measures for
More than 20 Federal Programs, 179, at https://
PO 00000
Frm 00043
Fmt 4701
Sfmt 4702
www.qualityforum.org/Publications/2014/01/MAP_
Pre-Rulemaking_Report__2014_Recommendations_
on_Measures_for_More_than_20_Federal_
Programs.aspx.
E:\FR\FM\01MYP2.SGM
01MYP2
25054
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 20—IPFQR PROGRAM MEASURES PROPOSED FOR THE FY 2018 PAYMENT DETERMINATION AND SUBSEQUENT
YEARS—Continued
National Quality Strategy priority
NQF No.
Making Care Safer ...........................................
The measures that we are proposing
to remove beginning with the FY 2018
N/A
Measure ID
N/A .................
Measure
Screening for Metabolic Disorders.
payment determination are set forth in
Table 21, below.
TABLE 21—IPFQR PROGRAM MEASURES PROPOSED TO BE REMOVED FOR THE FY 2018 PAYMENT DETERMINATION AND
SUBSEQUENT YEARS
NQF No.
Measure ID
Measure
0557 ..................
HBIPS–6 ........................
0558 ..................
HBIPS–7 ........................
Post-Discharge Continuing Care Plan
(Removal of measure contingent upon adoption of proposed measure, Transition Record with
Specified Elements Received by Discharged Patients (Discharges from an Inpatient Facility to
Home/Self Care or
Any Other Site of Care)).
Post Discharge Continuing Care Plan Transmitted to the Next Level of Care Provider Upon Discharge (Removal of measure contingent upon adoption of proposed measure, Timely Transmission of Transition Record (Discharges from an Inpatient Facility to Home/Self Care or Any
Other Site of Care)).
If these proposals are adopted, the
number of measures for the FY 2018
IPFQR Program would total 16, as set
forth in Table 22, below.
TABLE 22—PREVIOUSLY ADOPTED AND PROPOSED MEASURES FOR FY 2018 AND SUBSEQUENT YEARS
NQF No.
Measure ID
Measure
1656 ..................
HBIPS–2 ........................
HBIPS–3 ........................
HBIPS–5 ........................
FUH ...............................
SUB–1 ...........................
SUB–2 and SUB–2a .....
TOB–1 ...........................
TOB–2 ...........................
TOB–2a .........................
TOB–3 and TOB–3a .....
1659 ..................
0647 ..................
IMM–2 ...........................
N/A ................................
0648 ..................
N/A ................................
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Hours of Physical Restraint Use.
Hours of Seclusion Use.
Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification.
Follow-up After Hospitalization for Mental Illness.
Alcohol Use Screening.
Alcohol Use Brief Intervention Provided or Offered and SUB–2a Alcohol Use Brief Intervention.*
Tobacco Use Screening.
Tobacco Use Treatment Provided or Offered and
Tobacco Use Treatment.
Tobacco Use Treatment Provided or Offered at Discharge and the subset measure Tobacco Use
Treatment at Discharge.*
Influenza Immunization.
Transition Record with Specified Elements Received by Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or Any Other Site of Care).*
Timely Transmission of Transition Record (Discharges from an Inpatient Facility to Home/Self
Care or Any Other Site of Care).*
Screening for Metabolic Disorders.*
Influenza Vaccination Coverage Among Healthcare Personnel.
Assessment of Patient Experience of Care.
Use of an Electronic Health Record.
0640
0641
0560
0576
1661
1663
1651
1654
..................
..................
..................
..................
..................
..................
..................
..................
....................
....................
....................
....................
................................
................................
................................
................................
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
* Measures proposed for the FY 2018 payment determination and future years.
E. Possible IPFQR Program Measures
and Topics for Future Consideration
As we have previously indicated (79
FR 45974 through 45975), we seek to
develop a comprehensive set of quality
measures to be available for widespread
use for informed decision-making and
quality improvement in the IPF setting.
Therefore, through future rulemaking,
we intend to propose new measures that
will help further our goals of achieving
better health care and improved health
for Medicare beneficiaries who obtain
inpatient psychiatric services through
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
the widespread dissemination and use
of quality information.
We are developing a 30-day
psychiatric readmission measure that is
similar to the readmission measures
currently in use for other CMS quality
reporting programs, such as the Hospital
Inpatient Quality Reporting Program.
We anticipate that we will recommend
additional measures for development or
adoption in the future. We intend to
develop a measure set that effectively
assesses IPF quality across the range of
services and diagnoses, encompasses all
PO 00000
Frm 00044
Fmt 4701
Sfmt 4702
of the goals of the CMS quality strategy,
addresses measure gaps identified by
the MAP and others, and minimizes
collection and reporting burden. We
may also propose the removal of some
measures in the future.
We invite public comment on
measures that we should consider.
F. Changes to Reporting Requirements
We are proposing to make the
following changes to our reporting
requirements for FY 2017 and
subsequent years:
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
• Requiring that measures be reported
as a single yearly count rather than by
quarter and age; and
• Requiring that aggregate population
counts be reported as a single yearly
number rather than by quarter.
For FY 2018 and subsequent years we
are also proposing to make one change,
allowing uniform sampling
requirements for certain measures.
1. Proposed Changes to Reporting by
Age and Quarter for FY 2017 Payment
Determination and Subsequent Years
In the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53655 through 53656), we
finalized our policy that IPFs must
submit data for chart-abstracted
measures to the Web-Based Measures
Tool on an annual basis aggregated by
quarter. We also finalized our policy
that IPFs must submit data as required
by The Joint Commission, which calls
for IPFs to submit data for measures by
age group. Since then, we have learned
that obtaining data for each quarter and
by age is burdensome to providers and
the resultant number of cases is often
too small to allow public reporting. That
is, we do not report data on Hospital
Compare for measures with fewer than
11 cases; reporting by age and quarter
often causes the number of cases to fall
below 11. For example, for HBIPS–5, in
Quarter 2 of 2013, only 5.75 percent of
the data were reportable. Likewise, in
Quarter 3 and Quarter 4 of 2013, for
HBIPS–5, only 5.5 percent of the data
were reportable.
Therefore, beginning with FY 2017,
we propose to require facilities to report
data for chart-abstracted measures to the
Web-Based Measures Tool on an
aggregate basis by year, rather than by
quarter, and to discontinue the
requirement for reporting by age group.
If adopted, we would require IPFs to
report a single aggregate measure rate
for each measure annually for each
payment determination.
We believe that this change would
reduce provider burden because IPFs
would report a single rate for each
measure. In addition, we do not believe
that quarterly data or data stratified by
age are necessary for quality
improvement activities. We are able to
differentiate, and the public is able to
25055
view on Hospital Compare, those IPFs
that perform well on measures from
those for which quality improvement
activities may be necessary based on an
annual aggregate rate submission. We
note, however, that in the future, if our
evolving measures set, quality
improvement goals, and experience
with the program indicate a change is
needed, we may reevaluate and reinstate
the requirement for quarterly reporting.
In Table 23, below, we set forth the
proposed quality reporting and
submission timelines for the FY 2017
payment determination and subsequent
years for all the measures except FUH
and the Influenza Vaccination Coverage
among Healthcare Personnel measures.
We note that FUH is claims-based, and
therefore does not require additional
data submission. The Influenza
Vaccination Coverage among Healthcare
Personnel measure is reported to the
Centers for Disease Control and
Prevention, and we refer readers to the
FY 2015 IPF PPS final rule for more
information on the reporting timeline
for this measure (79 FR 45969).
TABLE 23—PROPOSED QUALITY REPORTING PERIODS AND TIMEFRAMES FOR THE FY 2017 PAYMENT DETERMINATION
AND SUBSEQUENT YEARS
Payment determination (FY)
Reporting period for services provided
2017 .....................................
January 1, 2015–December 31, 2015 ............................
We invite public comment on this
proposal.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
2. Proposed Changes To Aggregate
Population Count Reporting for FY 2017
Payment Determination and Subsequent
Years
In the FY 2015 IPF PPS final rule (79
FR 45973), we finalized our policy that
IPFs must submit aggregate population
counts for Medicare and non-Medicare
discharges by age group, diagnostic
group, and quarter, and sample size
counts for measures for which sampling
is performed. In section V.F.1. of this
proposed rule, we are proposing to only
require measure reporting as an annual
aggregate rate, rather than by quarter.
Likewise, beginning with the FY 2017
payment determination, we propose to
require non-measure data to be reported
as an aggregate, yearly count rather. We
invite public comment on this proposal.
Data submission timeframe
July 1, 2016–August 15, 2016.
3. Proposed Changes to Sampling
Requirements for FY 2018 Payment
Determination and Subsequent Years
Measure specifications for the
measures that we have adopted and
propose to adopt allow sampling for
some measures; however, for other
measures, IPFs must report data for all
discharges/patients. In addition, the
sampling requirements sometimes vary
by measure. In response to these
policies, in the FY 2014 IPPS/LTCH PPS
final rule, some commenters noted that
different sampling requirements in the
measures could increase burden on
facilities because these differences
would require IPFs to have varying
policies and procedures in place for
each measure (78 FR 50901). Although
we stated our belief that the importance
of these measures and of gathering
information for all discharges/patients
outweighs the burden of various
sampling requirements, we now believe
that the additional measures proposed
in this proposed rule tip the balance of
benefit and burden. Therefore, and for
the reasons provided below, we are
proposing to allow a uniform sampling
methodology both for measures that
require sampling and for certain other
measures. Specifically, we propose to
allow The Joint Commission/CMS
Global Initial Patient Population
sampling in Section 2.9_Global Initial
Patient Population found at https://
www.qualitynet.org/dcs/ContentServer
?c=Page&pagename=QnetPublic%2F
Page%2FQnetTier4&cid=12287
73989482. If this proposal is finalized,
it will allow IPFs to take one, global
sample for all measures specified in
Table 24, thereby decreasing burden on
these facilities and streamlining policies
and procedures.
In our current and proposed measure
set, the measures for which we propose
to allow The Joint Commission/CMS
Global sampling would include those
outlined in Table 24, below.
TABLE 24—MEASURES TO WHICH PROPOSED SAMPLING APPLIES *
NQF No.
Measure ID
0560 ..................
HBIPS–5 ........................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
Measure
Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification.
PO 00000
Frm 00045
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
25056
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 24—MEASURES TO WHICH PROPOSED SAMPLING APPLIES *—Continued
NQF No.
1661
1663
1651
1654
Measure ID
..................
..................
..................
..................
Measure
1656 ..................
SUB–1 ...........................
SUB–2 and SUB–2a .....
TOB–1 ...........................
TOB–2 ...........................
TOB–2a .........................
TOB–3 and TOB–3a .....
1659 ..................
0647 ..................
IMM–2 ...........................
N/A ................................
0648 ..................
N/A ................................
N/A ....................
N/A ................................
Alcohol Use Screening.
Alcohol Use Brief Intervention Provided or Offered and SUB–2a Alcohol Use Brief Intervention.**
Tobacco Use Screening.
Tobacco Use Treatment Provided or Offered and Tobacco Use Treatment.
Tobacco Use Treatment Provided or Offered at Discharge and the subset measure Tobacco Use
Treatment at Discharge.**
Influenza Immunization.
Transition Record with Specified Elements Received by Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or Any Other Site of Care).**
Timely Transmission of Transition Record (Discharges from an Inpatient Facility to Home/Self
Care or Any Other Site of Care).**
Screening for Metabolic Disorders.**
* Measures proposed for removal have not been included in this table. If these measures (HBIPS–4, HBIPS–6, and HBIPS–7) are not removed, the sampling methodology would also apply to their collection and submission.
** Measures proposed for the FY 2018 payment determination and future years.
In section F.1. of this proposed rule,
we are proposing to require reporting on
measures as a yearly count rather than
by quarter. Because The Joint
Commission/CMS Global sampling
guidelines specify sampling by quarter,
we propose to modify their sampling
guidelines by multiplying the ‘‘number
of cases in the initial patient
population’’ and the ‘‘number of cases
to be sampled’’ by 4. In addition, since
we require all IPFs to report data on all
chart-abstracted measures even when
the population size for a given measure
is small or zero (78 FR 50901), we have
modified the table to require reporting
regardless of the number of cases. Thus,
we propose the following sampling
guidelines for the measures above:
Number of
cases in initial
patient
population
Number of records to be
sampled
≥ 6,117 ............
3,057–6,116 ....
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
609–3,056 .......
0–608 ..............
1,224.
20% of initial patient population.
609.
All cases.
As stated above, we believe this
proposal will simplify processes and
procedures for IPFs because uniform
requirements will promote streamlined
procedures and reporting. We also
believe the proposal will decrease
burden by allowing IPFs to identify a
single, initial patient population for all
of the measures specified in Table 24
from which to calculate the sample size.
Furthermore, we do not believe this
approach will reduce quality
improvement. Sampling calculations
ensure that enough data are represented
in the sample to determine accurate
measure rates. Therefore, even with
sampling, we believe that CMS, IPFs,
and the public would be able to
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
differentiate those IPFs who perform
well on measures from those who do
not.
We invite public comment on this
proposal, which would begin with the
FY 2018 payment determination.
G. Public Display and Review
Requirements
We are not proposing any changes to
the public display and review
requirements for the FY 2018 payment
determination and subsequent years and
refer readers to the FY 2014 IPPS/LTCH
PPS final rule (78 FR 50897 through
50898) for more information.
H. Form, Manner, and Timing of Quality
Data Submission
1. Procedural and Submission
Requirements
We are not proposing any changes to
the procedural and submission
requirements for the FY 2018 payment
determination and subsequent years and
refer readers to the FY 2014 IPPS/LTCH
PPS final rule (77 FR 50898 through
50899) for more information on these
previously finalized requirements.
2. Proposed Change to the Reporting
Periods and Submission Timeframes
In the FY 2014 IPPS/LTCH PPS final
rule (78 FR 50901), we finalized
requirements for reporting periods and
submission timeframes for the IPFQR
Program measures. We are proposing
one change to these requirements, as
discussed above in section V.F.1. of this
proposed rule. Specifically, we are
proposing to no longer require that
measure rates be reported quarterly and
by age, but to only require an aggregate,
yearly count.
3. Population and Sampling
In the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53657 through 53658) and
PO 00000
Frm 00046
Fmt 4701
Sfmt 4702
FY 2014 IPPS/LTCH PPS final rule (78
FR 58901 through 58902), we finalized
policies for population, sampling, and
minimum case thresholds. We are
proposing one change to these policies,
as discussed above in section V.F.3. of
this proposed rule. Specifically, we are
proposing to allow uniform sampling on
certain measures.
4. Data Accuracy and Completeness
Acknowledgement (DACA)
Requirements
We are not proposing any changes to
the DACA requirements and refer
readers to the FY 2013 IPPS/LTCH PPS
final rule (77 FR 53658) for more
information on these requirements.
I. Reconsideration and Appeals
Procedures
In the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53658 through 53660), we
adopted a reconsideration process, later
codified at § 412.434, whereby IPFs can
request a reconsideration of their
payment update reduction in the event
that an IPF believes that its annual
payment update has been incorrectly
reduced for failure to meet all IPFQR
Program requirements. We are not
proposing any changes to the
Reconsideration and Appeals Procedure
and refer readers to the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53658
through 53660) and the FY 2014 IPPS/
LTCH PPS final rule (78 FR 50953) for
further details on the reconsideration
process.
J. Exceptions to Quality Reporting
Requirements
We are not proposing any changes to
the exceptions to quality reporting
requirements and refer readers to the FY
2013 IPPS/LTCH PPS final rule (77 FR
53659 through 53660), where we
initially finalized the policy as ‘‘Waivers
E:\FR\FM\01MYP2.SGM
01MYP2
25057
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
from Quality Reporting,’’ and the FY
2015 IPF PPS final rule (79 FR 45978),
where we re-named the policy as
‘‘Exceptions to Quality Reporting
Requirements’’ for more information.
VI. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995 (PRA), we are required to
publish a 60-day notice in the Federal
Register and solicit public comment
before a collection of information
requirement is submitted to the Office of
Management and Budget (OMB) for
review and approval.
To fairly evaluate whether an
information collection should be
approved by OMB, PRA section
3506(c)(2)(A) requires that we solicit
comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our burden
estimates.
• The quality, utility, and clarity of
the information to be collected.
• Our effort to minimize the
information collection burden on the
affected public, including the use of
automated collection techniques.
We are soliciting public comment on
each of the section 3506(c)(2)(A)required issues for the following
information collection requirements
(ICRs).
A. Wage Estimates
We estimate that reporting data for the
IPFQR Program measures can be
accomplished by staff with a mean
hourly wage of $16.42 per hour.67
Under OMB Circular A–76, in
calculating direct labor, agencies should
not only include salaries and wages, but
also ‘‘other entitlements’’ such as fringe
benefits.68 This Circular provides that
the civilian position full fringe benefit
cost factor is 36.25 percent. Therefore,
using these assumptions, we estimate an
hourly labor cost of $22.37 ($16.42 base
salary + $5.95 fringe). The following
table presents the mean hourly wage,
the cost of fringe benefits (calculated at
36.25 percent of salary), and the
adjusted hourly wage.
Occupation title
Occupation
code
Mean hourly
wage
($/hr)
Fringe benefit
(at 36.25% in
$/hr)
Adjusted hourly wage
($/hr)
Medical Records and Health Information Technician ......................................
29–2071
16.42
5.95
$22.37
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
The BLS is ‘‘the principal Federal
agency responsible for measuring labor
market activity, working conditions, and
price changes in the economy.’’ 69
Acting as an independent agency, the
Bureau provides objective information
for not only the government, but also for
the public. The Bureau’s National
Occupational Employment and Wage
Estimates describes Medical Records
and Health Information Technicians as
those responsible for organizing and
managing health information data.
Therefore, we believe it is reasonable to
assume that these individuals would be
tasked with abstracting clinical data for
these measures. In addition, the
Hospital IQR Program uses this wage to
calculate its burden estimates.
reporting that is required in the summer
of FY 2016. For purposes of calculating
burden, we will attribute the costs
associated with the proposals to the year
in which these costs begin; for the
purposes of all of the provisions in this
proposed rule, that year is FY 2016.
B. ICRs Regarding the Inpatient
Psychiatric Facility Quality Reporting
(IPFQR) Program
We refer readers to the FY 2015 IPF
PPS final rule (79 FR 45978 through
45980) for a detailed discussion of the
burden for the program requirements
that we have previously adopted.
Below, we discuss only the changes in
burden resulting from the provisions in
this proposed rule. Although we
propose provisions that impact both the
FY 2017 and FY 2018 payment
determinations, all of our proposals
begin to apply to facilities in FY 2016.
For example, data collection for the
proposed measures begins in FY 2016,
and the changes to the reporting
requirements take effect beginning with
1. Changes in Time Required To ChartAbstract Data Based on Proposed
Reporting Requirements
As discussed in section V.F. of this
preamble, we are proposing the
following 3 changes regarding how
facilities should report data for IPFQR
Program measures: (1) Measures must be
reported as a single yearly count rather
than by quarter and age; (2) aggregate
population counts must be reported as
a single yearly number rather than by
quarter; and (3) uniform sampling
would be allowed for certain measures.
We believe that these changes will
lead to a decrease in burden since
facilities would only be required to
enter one aggregate number for both the
numerator and denominator for each
measure and will be allowed to pull one
sample used to calculate the measures
specified in Table 24 of this preamble.
Consequently, we believe that the time
required to chart-abstract data for these
measures would be reduced by 20
percent. Previously, we estimated 15
minutes to chart-abstract data for each
case (79 FR 45979). Because of our
proposed changes to sampling and
reporting data, we are revising the figure
and now estimate 12 minutes (0.20 × 15
67 https://www.bls.gov/ooh/healthcare/medicalrecords-and-health-information-technicians.html.
68 https://www.whitehouse.gov/omb/
circulars_a076_a76_incl_tech_correction.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00047
Fmt 4701
Sfmt 4702
minutes), a change of ¥3 min or ¥0.05
hr.
2. Estimated Burden of IPFQR Program
Proposals
In section V. of this preamble, we are
proposing to adopt the following five
measures:
• TOB–3—Tobacco Use Treatment
Provided or Offered at Discharge and
the subset measure TOB–3a Tobacco
Use Treatment at Discharge (National
Quality Forum (NQF) #1656);
• SUB–2—Alcohol Use Brief
Intervention Provided or Offered and
the subset measure SUB–2a (NQF
#1663);
• Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0647);
• Timely Transmission of Transition
Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0648); and
• Screening for Metabolic Disorders.
In the same section, we are also
proposing to remove the following 3
measures:
• HBIPS–4 Patients Discharged on
Multiple Antipsychotic Medications;
• Hospital Based Inpatient
Psychiatric Services (HBIPS)-6 PostDischarge Continuing Care Plan (NQF
#0557), if Transition Record with
Specified Elements Received by
Discharged Patients (Discharges from an
69 https://www.bls.gov/bls/infohome.htm.
E:\FR\FM\01MYP2.SGM
01MYP2
25058
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
Inpatient Facility to Home/Self Care or
Any Other Site of Care) is adopted; and
• HBIPS–7 Post-Discharge Continuing
Care Plan Transmitted to the Next Level
of Care Provider Upon Discharge (NQF
#0558), if Timely Transmission of
Transition Record (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) (NQF #0648) is
adopted.
We believe that approximately
1,617 70 IPFs will participate in the
IPFQR Program for requirements
occurring in FY 2016 and subsequent
years. Based on data from CY 2013, we
believe that each facility will submit
measure data on approximately 431 71
cases per year. Therefore, we estimate
that adopting five measures and
removing 3 measures (for a net result of
2 measures) will result in an increase in
burden of 172.4 hours per facility (2
measures × (431 cases/measure × 0.20
hours/case)) or 278,770.80 hours across
all IPFs (172.4 hours/facility × 1,617
facilities). The increase in costs is
approximately $3,856.59 per IPF
($22.37/hour × 172.4 hours) or
$6,236,102.80 across all IPFs
(278,770.80 hours × $22.37/hour).
Consistent with our estimates in the
FY 2015 IPF PPS final rule (79 FR
45979), we believe the estimated burden
for training personnel on our proposals
for data collection and submission is 2
hours per facility or 3,234 hours (2
hours/facility × 1,617 facilities) across
all IPFs. Therefore, the cost for this
training is $44.74 ($22.37/hour × 2
hours) for each IPF or $72,344.58
($22.37/hour × 3,234 hours) for all
facilities.
Finally, IPFs must submit to CMS
aggregate population counts for
Medicare and non-Medicare discharges
by age group, and diagnostic group, and
sample size counts for measures for
which sampling is performed. As noted
above, we are proposing five new
measures beginning with the FY 2018
payment determination. However,
because, as further described above, we
are eliminating reporting this nonmeasure data by quarter for all
measures, we believe that the addition
of five measures leads to a net negligible
change in burden associated with nonmeasure data collection.
C. Summary of Annual Burden
Estimates for Proposed Requirements
TABLE 25—PROPOSED ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS UNDER OMB CONTROL NUMBER
0938–1171 (CMS–10432)
Preamble
section(s)
Proposed action
V.C. ..............
Remove HBIPS–4 .........
V. ..................
V. ..................
Training ..........................
........................................
1,617
....................
1,617
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
D. ICRs Regarding the Hospital and
Health Care Complex Cost Report
(CMS–2552–10)
This rule would not impose any new
or revised collection of information
requirements associated with CMS–
2552–10 (as discussed under preamble
section III.A.3.a.i.). Consequently, the
cost report does not require additional
OMB review under the authority of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.). The report’s
information collection requirements and
burden estimates are approved by OMB
under control number 0938–0052.
E. Submission of PRA-Related
Comments
We submitted a copy of this proposed
rule to OMB for its review of the rule’s
information collection and
recordkeeping requirements. The
requirements are not effective until they
have been approved by the OMB.
70 In the FY 2015 IPF PPS final rule we estimated
1,626 IPFs and are adjusting that estimate by ¥9
to account for more recent data.
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
Responses
(per respondent)
Labor
cost of
reporting
($/hr)
Burden per
response
(hours)*
Total annual
burden
(hours)
0.20
278,770.80
22.37
6,236,102.80
2
2.2
3,234
282,004.8
....................
22.37
72,344.58
6,308,447.38
Remove HBIPS–6 and
HBIPS–7.
Add NQF # 1656, #
1663, # 0647, # 0648,
and Screening for
Metabolic Disorders.
Total ......
Respondents
862 (431 cases/yr × 2
measures).
1 .....................................
863 .................................
To obtain copies of the supporting
statement and any related forms for the
proposed collections discussed above,
please visit CMS’ Web site at
www.cms.hhs.gov/
Paperwork@cms.hhs.gov, or call the
Reports Clearance Office at 410–786–
1326.
We invite public comment on these
potential information collection
requirements. If you wish to comment,
please submit your comments
electronically as specified under the
ADDRESSES caption of this proposed rule
and identify the rule (CMS–1627–P).
PRA-related comments must be
received on/by June 23, 2015.
VII. Regulatory Impact Analysis
A. Statement of Need
This proposed rule would update the
prospective payment rates for Medicare
inpatient hospital services provided by
IPFs for discharges occurring during the
FY beginning October 1, 2015, through
September 30, 2016. We are applying
the proposed FY 2012-based IPFspecific market basket increase of 2.7
percent, less the productivity
adjustment of 0.6 percentage point as
required by 1886(s)(2)(A)(i) of the Act,
and further reduced by 0.2 percentage
point as required by sections
1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the
Act. In this proposed rule, we propose
to adopt an IPF-specific market basket
and to update the IPF labor-related
share; to adopt new OMB CBSA
delineations for the FY 2016 IPF Wage
Index; and to phase out the rural
adjustment for 37 rural providers which
would become urban providers as a
result of the new CBSA delineations.
Additionally, this rule reminds
providers of the October 1, 2015
implementation of the International
Classification of Diseases, 10th
Revision, Clinical Modification (ICD–
71 In the FY 2015 IPF PPS final rule we estimated
556 cases per year and are adjusting that estimate
by ¥125 to account for more recent data.
PO 00000
Frm 00048
Fmt 4701
Sfmt 4702
Total cost
($)
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
10–CM/PCS) for the IPF prospective
payment system, updates providers on
the status of IPF PPS refinements, and
proposes new quality reporting
requirements for the IPFQR Program.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
B. Overall Impact
We have examined the impact of this
proposed rule as required by Executive
Order 12866 on Regulatory Planning
and Review (September 30, 1993),
Executive Order 13563 on Improving
Regulation and Regulatory Review
(January 18, 2011), the Regulatory
Flexibility Act (RFA) (September 19,
1980, Pub. L. 96–354), section 1102(b) of
the Social Security Act, section 202 of
the Unfunded Mandates Reform Act of
1995 (March 22, 1995; Pub. L. 104–4),
Executive Order 13132 on Federalism
(August 4, 1999) and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563
direct 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 a major rules
with economically significant effects
($100 million or more in any 1 year).
This proposed rule is not designated as
economically ‘‘significant’’ under
section 3(f)(1) of Executive Order 12866.
We estimate that the total impact of
these changes for FY 2016 payments
compared to FY 2015 payments will be
a net increase of approximately $80
million. This reflects a $95 million
increase from the update to the payment
rates, as well as a $15 million decrease
as a result of the update to the outlier
threshold amount. Outlier payments are
estimated to decrease from 2.3 percent
in FY 2015 to 2.0 percent of total IPF
payments in FY 2016.
The RFA requires agencies to analyze
options for regulatory relief of small
entities if a rule has a significant impact
on a substantial number of small
entities. For purposes of the RFA, small
entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most IPFs
and most other providers and suppliers
are small entities, either by nonprofit
status or having revenues of $7.5
million to $38.5 million or less in any
1 year, depending on industry
classification (for details, refer to the
SBA Small Business Size Standards
found at https://www.sba.gov/sites/
default/files/files/
Size_Standards_Table.pdf), or being
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
nonprofit organizations that are not
dominant in their markets.
Because we lack data on individual
hospital receipts, we cannot determine
the number of small proprietary IPFs or
the proportion of IPFs’ revenue derived
from Medicare payments. Therefore, we
assume that all IPFs are considered
small entities. The Department of Health
and Human Services generally uses a
revenue impact of 3 to 5 percent as a
significance threshold under the RFA.
As shown in Table 26, we estimate
that the overall revenue impact of this
proposed rule on all IPFs is to increase
Medicare payments by approximately
1.6 percent. As a result, since the
estimated impact of this proposed rule
is a net increase in revenue across
almost all categories of IPFs, the
Secretary has determined that this
proposed rule would have a positive
revenue impact on a substantial number
of small entities. MACs are not
considered to be small entities.
Individuals and States are not included
in the definition of a small entity.
In addition, section 1102(b) of the
Social Security Act requires us to
prepare a regulatory impact analysis if
a rule may have a significant impact on
the operations of a substantial number
of small rural hospitals. This analysis
must conform to the provisions of
section 603 of the RFA. For purposes of
section 1102(b) of the Act, we define a
small rural hospital as a hospital that is
located outside of a metropolitan
statistical area and has fewer than 100
beds. As discussed in detail below, the
rates and policies set forth in this
proposed rule would not have an
adverse impact on the rural hospitals
based on the data of the 275 rural units
and 68 rural hospitals in our database of
1,617 IPFs for which data were
available. Therefore, the Secretary has
determined that this proposed rule
would not have a significant impact on
the operations of a substantial number
of small rural hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 (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 2015, that
threshold is approximately $144
million. This proposed rule will not
impose spending costs on state, local, or
tribal governments in the aggregate, or
by the private sector, of $144 million or
more.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
PO 00000
Frm 00049
Fmt 4701
Sfmt 4702
25059
rule) that imposes substantial direct
requirement costs on state and local
governments, preempts state law, or
otherwise has Federalism implications.
As stated above, this proposed rule
would not have a substantial effect on
state and local governments.
C. Anticipated Effects
We discuss the historical background
of the IPF PPS and the impact of this
proposed rule on the Federal Medicare
budget and on IPFs.
1. Budgetary Impact
As discussed in the November 2004
and May 2006 IPF PPS final rules, we
applied a budget neutrality factor to the
Federal per diem base rate and ECT rate
to ensure that total estimated payments
under the IPF PPS in the
implementation period would equal the
amount that would have been paid if the
IPF PPS had not been implemented. The
budget neutrality factor includes the
following components: outlier
adjustment, stop-loss adjustment, and
the behavioral offset. As discussed in
the May 2008 IPF PPS notice (73 FR
25711), the stop-loss adjustment is no
longer applicable under the IPF PPS.
As discussed in section III.D.1.e. of
this proposed rule, we are using the
wage index and labor-related share in a
budget neutral manner by applying a
wage index budget neutrality factor to
the Federal per diem base rate and ECT
rate. Therefore, the budgetary impact to
the Medicare program of this proposed
rule will be due to the estimated market
basket update for FY 2016 of 2.7 percent
(see section III.A.4. of this proposed
rule) less the productivity adjustment of
0.6 percentage point required by section
1886 (s)(2)(A)(i) of the Act; further
reduced by the ‘‘other adjustment’’ of
0.2 percentage point under sections
1886(s)(2)(A)(ii) and 1886 (s)(3)(D) of
the Act; and the update to the outlier
fixed dollar loss threshold amount.
We estimate that the FY 2016 impact
will be a net increase of $80 million in
payments to IPF providers. This reflects
an estimated $95 million increase from
the update to the payment rates and a
$15 million decrease due to the update
to the outlier threshold amount to set
total estimated outlier payments at 2.0
percent of total estimated payments in
FY 2016. This estimate does not include
the implementation of the required 2
percentage point reduction of the
market basket increase factor for any IPF
that fails to meet the IPF quality
reporting requirements (as discussed in
section VII.C.4. below).
E:\FR\FM\01MYP2.SGM
01MYP2
25060
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
2. Impact on Providers
To understand the impact of the
changes to the IPF PPS on providers,
discussed in this proposed rule, it is
necessary to compare estimated
payments under the IPF PPS rates and
factors for FY 2016 versus those under
FY 2015. We determined the percent
change of estimated FY 2016 IPF PPS
payments to FY 2015 IPF PPS payments
for each category of IPFs. In addition,
for each category of IPFs, we have
included the estimated percent change
in payments resulting from the update
to the outlier fixed dollar loss threshold
amount; the updated wage index data;
the changes to wage index CBSAs; the
changes to rural adjustment payments
resulting from changes in rural or urban
status, due to CBSA changes; the
proposed labor-related share; and the
estimated market basket update for FY
2016, as adjusted by the productivity
adjustment according to section
1886(s)(2)(A)(i), and the ‘‘other
adjustment’’ according to sections
1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the
Act.
To illustrate the impacts of the FY
2016 changes in this proposed rule, our
analysis begins with a FY 2015 baseline
simulation model based on FY 2014 IPF
payments inflated to the midpoint of FY
2015 using IHS Global Insight Inc.’s
most recent forecast of the market basket
update (see section III.A.4. of this
proposed rule); the estimated outlier
payments in FY 2015; the CBSA
delineations for IPFs based on OMB’s
MSA definitions after June 2003; the FY
2014 pre-floor, pre-reclassified hospital
wage index; the FY 2015 labor-related
share; and the FY 2015 percentage
amount of the rural adjustment. During
the simulation, the total estimated
outlier payments are maintained at 2
percent of total IPF PPS payments.
Each of the following changes is
added incrementally to this baseline
model in order for us to isolate the
effects of each change:
• The update to the outlier fixed
dollar loss threshold amount;
• The FY 2015 pre-floor, prereclassified hospital wage index without
the revised OMB delineations;
• The FY 2015 updated CBSA
delineations, based on OMB’s February
28, 2013 Bulletin No. 13–01, as
described in section III.D.1.c. of this
proposed rule, with the proposed
blended FY 2016 IPF wage index;
• The FY 2016 rural adjustment,
accounting for changes to rural or urban
status due to the updated CBSA
delineations, including the phase-out of
the rural adjustment for the IPFs
changing from rural to urban status, as
described in section III.D.1.d;
• The proposed FY 2016 labor-related
share;
• The estimated market basket update
for FY 2016 of 2.7 percent less the
productivity adjustment of 0.6
percentage point reduction in
accordance with section 1886(s)(2)(A)(i)
of the Act and further reduced by the
‘‘other adjustment’’ of 0.2 percentage
point in accordance with sections
1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the
Act.
Our final comparison illustrates the
percent change in payments from FY
2015 (that is, October 1, 2014, to
September 30, 2015) to FY 2016 (that is,
October 1, 2015, to September 30, 2016)
including all the changes in this
proposed rule.
TABLE 26—IPF IMPACT TABLE FOR FY 2016
[% change in columns 3–9]
Number of
IPFs
Outlier
Wage
index 1
CBSA 2
Change
in rural
adjustment 3
Labor related share
(74.9%) 4
IPF market
basket
update 5
Total percent
change 6
(1)
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
Facility by type
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
All Facilities .......................................................
Total Urban ................................................
Total Rural .................................................
Urban unit ..................................................
Urban hospital ............................................
Rural unit ....................................................
Rural hospital .............................................
CBSA Change:
Urban to Urban ..........................................
Rural to Rural .............................................
Urban to Rural ...........................................
Rural to Urban ...........................................
By Type of Ownership:
Freestanding IPFs:
Urban Psychiatric Hospitals:
Government ........................................
Non-Profit ............................................
For-Profit .............................................
Rural Psychiatric Hospitals:
Government ........................................
Non-Profit ............................................
For-Profit .............................................
IPF Units:
Urban:
Government ........................................
Non-Profit ............................................
For-Profit .............................................
Rural:
Government ........................................
Non-Profit ............................................
For-Profit .............................................
By Teaching Status:
Non-teaching ..............................................
Less than 10% interns and residents to
beds ........................................................
10% to 30% interns and residents to beds
More than 30% interns and residents to
beds ........................................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
1,617
1,274
343
847
427
275
68
¥0.3
¥0.3
¥0.3
¥0.4
¥0.1
¥0.3
¥0.1
0.0
0.0
0.0
0.0
¥0.1
0.1
0.0
0.0
0.0
¥0.2
0.0
0.1
¥0.2
¥0.3
0.0
0.0
0.2
0.0
0.0
0.2
0.2
0.0
0.2
¥1.1
0.2
0.1
¥1.1
¥1.0
1.9
1.9
1.9
1.9
1.9
1.9
1.9
1.6
1.8
0.6
1.7
1.9
0.5
0.7
1,237
340
3
37
¥0.3
¥0.3
¥0.1
¥0.2
0.0
0.0
3.1
0.1
0.0
¥0.2
¥0.4
2.8
0.1
0.1
16.2
¥4.1
0.2
¥1.1
¥1.1
¥0.9
1.9
1.9
1.9
1.9
1.8
0.4
20.1
¥0.5
123
99
205
¥0.3
¥0.1
0.0
0.1
0.4
¥0.3
0.0
0.1
0.1
0.0
0.0
0.0
0.1
0.4
0.0
1.9
1.9
1.9
1.8
2.7
1.6
36
11
21
¥0.1
¥0.5
0.0
0.2
¥0.6
0.0
¥0.1
0.0
¥0.6
0.4
0.0
0.1
¥0.8
¥0.3
¥1.3
1.9
1.9
1.9
1.5
0.5
0.1
129
552
166
¥0.6
¥0.4
¥0.3
¥0.2
0.2
¥0.2
¥0.1
0.0
0.0
0.0
¥0.1
0.0
0.3
0.3
0.0
1.9
1.9
1.9
1.2
1.9
1.3
69
142
64
¥0.2
¥0.3
¥0.3
¥0.1
0.2
0.0
¥0.3
¥0.2
¥0.2
0.1
0.3
0.2
¥1.3
¥0.9
¥1.2
1.9
1.9
1.9
0.0
0.8
0.3
1,420
¥0.2
¥0.1
0.0
0.0
¥0.1
1.9
1.5
110
61
¥0.3
¥0.7
0.2
0.4
¥0.1
¥0.1
0.0
0.0
0.5
0.5
1.9
1.9
2.1
2.1
26
¥0.7
0.4
0.0
0.0
0.8
1.9
2.4
PO 00000
Frm 00050
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
25061
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
TABLE 26—IPF IMPACT TABLE FOR FY 2016—Continued
[% change in columns 3–9]
Facility by type
Number of
IPFs
Outlier
Wage
index 1
CBSA 2
Change
in rural
adjustment 3
Labor related share
(74.9%) 4
IPF market
basket
update 5
Total percent
change 6
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
By Region:
New England ..............................................
Mid-Atlantic ................................................
South Atlantic .............................................
East North Central .....................................
East South Central .....................................
West North Central ....................................
West South Central ....................................
Mountain ....................................................
Pacific .........................................................
By Bed Size:
Psychiatric Hospitals:
Beds: 0–24 ..........................................
Beds: 25–49 ........................................
Beds: 50–75 ........................................
Beds: 76 + ..........................................
Psychiatric Units:
Beds: 0–24 ..........................................
Beds: 25–49 ........................................
Beds: 50–75 ........................................
Beds: 76 + ..........................................
108
243
238
259
160
141
243
103
122
¥0.3
¥0.2
¥0.2
¥0.2
¥0.2
¥0.4
¥0.2
¥0.2
¥0.4
0.8
0.2
¥0.3
0.0
¥0.5
0.0
¥0.5
0.4
0.5
0.0
¥0.1
0.1
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
¥0.1
0.1
¥0.1
0.0
¥0.1
0.1
0.1
0.7
0.6
¥0.4
¥0.2
¥1.1
¥0.3
¥0.7
0.2
1.3
1.9
1.9
1.9
1.9
1.9
1.9
1.9
1.9
1.9
3.2
2.4
0.9
1.6
0.0
1.3
0.3
2.3
3.4
83
77
84
251
¥0.1
¥0.1
¥0.1
¥0.1
0.0
¥0.4
0.0
0.0
0.1
0.3
0.0
0.0
¥0.3
¥0.1
0.1
0.0
¥0.7
¥0.2
0.0
0.1
1.9
1.9
1.9
1.9
0.8
1.4
1.9
2.0
662
301
103
56
¥0.4
¥0.4
¥0.3
¥0.4
0.0
0.0
0.1
¥0.1
0.0
0.1
0.0
¥0.2
0.0
0.0
0.0
0.0
¥0.3
0.0
0.1
0.5
1.9
1.9
1.9
1.9
1.2
1.7
1.9
1.7
1 Includes
a FY 2016 IPF wage index, current CBSA delineations, and a labor-related share of 0.69294.
a 50/50 FY 2016 proposed blended IPF wage index, new CBSA delineations, and a labor-related share of 0.69294.
a 50/50 FY 2016 proposed blended IPF wage index, new CBSA delineations, a labor-related share of 0.69294, and a rural adjustment. Providers changing from urban to rural status will receive a 17 percent rural adjustment, and providers changing from rural to urban status will receive 2/3 of the 17 percent rural adjustment in FY 2016. For those changing from urban to rural status, the total impact shown is affected by outlier threshold increasing, which results in smaller outlier
payments as part of total payments. For those changing from rural to urban status, the outlier threshold is being lowered by 2/3 of 17 percent, which results in more
providers being eligible for outlier payments, increasing the outlier portion of their total payments.
4 Includes a 50/50 FY 2016 proposed blended IPF wage index, new CBSA delineations, a labor-related share of 0.749, and a rural adjustment.
5 This column reflects the payment update impact of the IPF-specific market basket update of 2.7 percent, a 0.6 percentage point reduction for the productivity adjustment as required by section 1886(s)(2)(A)(i) of the Act, and a 0.2 percentage point reduction in accordance with sections 1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the
Act.
6 Percent changes in estimated payments from FY 2015 to FY 2016 include all of the changes presented in this proposed rule. Note, the products of these impacts
may be different from the percentage changes shown here due to rounding effects.
2 Includes
3 Includes
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
3. Results
Table 26 above displays the results of
our analysis. The table groups IPFs into
the categories listed below based on
characteristics provided in the Provider
of Services (POS) file, the IPF provider
specific file, and cost report data from
HCRIS:
• Facility Type
• Location
• Teaching Status Adjustment
• Census Region
• Size
The top row of the table shows the
overall impact on the 1,617 IPFs
included in this analysis.
In column 3, we present the effects of
the update to the outlier fixed dollar
loss threshold amount. We estimate that
IPF outlier payments as a percentage of
total IPF payments are 2.3 percent in FY
2015. Thus, we are adjusting the outlier
threshold amount in this proposed rule
to set total estimated outlier payments
equal to 2 percent of total payments in
FY 2016. The estimated change in total
IPF payments for FY 2016, therefore,
includes an approximate 0.3 percent
decrease in payments because the
outlier portion of total payments is
expected to decrease from
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
approximately 2.3 percent to 2.0
percent.
The overall impact of this outlier
adjustment update (as shown in column
3 of Table 26), across all hospital
groups, is to decrease total estimated
payments to IPFs by 0.3 percent. The
largest decrease in payments is
estimated to reflect a 0.7 percent
decrease in payments for IPFs located in
teaching hospitals with an intern and
resident Average Daily Census (ADC)
ratio that is 10 percent or greater.
In column 4, we present the effects of
the budget-neutral proposed update to
the IPF wage index. This represents the
effect of using the most recent wage data
available without taking into account
the revised OMB delineations, which
are presented separately in the next
column. That is, the impact represented
in this column is solely that of updating
from the FY 2015 IPF wage index to the
FY 2016 IPF wage index without any
changes to the OMB delineations. We
note that there is no projected change in
aggregate payments to IPFs, as indicated
in the first row of column 4. However,
there will be distributional effects
among different categories of IPFs. For
example, we estimate the largest
increase in payments to be 3.1 percent
PO 00000
Frm 00051
Fmt 4701
Sfmt 4702
for IPFs changing from urban to rural
status, and the largest decrease in
payments to be 0.6 percent for rural
non-profit freestanding IPFs.
In column 5, we present the effects of
the new OMB delineations and the
proposed transition to the new
delineations using the transitional IPF
wage index. The FY 2016 IPF proposed
transitional wage index is a blended
wage index using 50 percent of the IPF’s
FY 2016 wage index based on the new
OMB delineations and 50 percent of the
IPF’s FY 2016 wage index based on the
OMB delineations used in FY 2015. In
the aggregate, since these proposed
updates to the wage index are applied
in a budget-neutral manner, we do not
estimate that these proposed updates
would affect overall estimated payments
to IPFs. However, we estimate that these
proposed updates would have
distributional effects. We estimate the
largest increase in payments would be
2.8 percent for IPFs changing from rural
to urban status and the largest decrease
in payments would be 0.6 percent for
rural for-profit freestanding IPFs.
In column 6, we present the effects of
the changes to the rural adjustment
under the new CBSA delineations.
There are 3 urban IPFs which would be
E:\FR\FM\01MYP2.SGM
01MYP2
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
25062
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
newly designated as rural IPFs, which
would now receive a full 17 percent
rural adjustment. We estimate that the
largest increase in payments would be
to these 3 newly-rural IPFs. Note that
each column’s simulations include both
regular and outlier payments; as regular
payments increase, outlier payments
decrease to maintain outlier payments at
2 percent of total payments. As such,
the increase to total IPF payments is
estimated to be 16.2 percent. There are
also 37 rural IPFs which would be
newly designated as urban IPFs, where
we proposed to phase out their rural
adjustment over 3 years. These 37
newly-urban providers would receive 2⁄3
of the 17 percent rural adjustment in FY
2016, 1⁄3 of the 17 percent rural
adjustment in FY 2017, and no rural
adjustment for FY 2018 and subsequent
years. As the regular payments for these
37 providers decrease, their outlier
payments increase to maintain outlier
payments at 2 percent of total payments.
We estimate that the largest decrease in
payments would be 4.1 percent for these
37 newly-urban providers.
In column 7, we present the estimated
effects of the proposed labor-related
share. The proposed update to the IPF
labor-related share is made in a budgetneutral manner and therefore would not
affect total estimated IPF PPS payments.
However, it would affect the estimated
distribution of payments among
providers. For example, we estimate the
largest increase in payments would be
1.3 percent to IPFs in the Pacific region.
We estimate the largest decrease in
payments would be 1.3 percent to rural
for-profit freestanding IPFs and to rural
IPF governmental units.
In column 8, we present the estimated
effects of the update to the IPF PPS
payment rates of 1.9 percent, which are
based on a proposed 2.7 percent IPFspecific market basket update, less the
productivity adjustment of 0.6
percentage point in accordance with
section 1886(s)(2)(A)(i), and further
reduced by 0.2 percentage point in
accordance with section
1886(s)(2)(A)(ii) and 1886(s)(3)(D).
Finally, column 9 compares our
estimates of the total changes reflected
in this proposed rule for FY 2016 to the
payments for FY 2015 (without these
changes). This column reflects all
proposed FY 2016 changes relative to
FY 2015. The average estimated increase
for all IPFs is approximately 1.6 percent.
This estimated net increase includes the
effects of the estimated 2.7 percent
market basket update reduced by the
productivity adjustment of 0.6
percentage point, as required by section
1886(s)(2)(A)(i) of the Act and further
reduced by the ‘‘other adjustment’’ of
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
0.2 percentage point, as required by
sections 1886(s)(2)(A)(ii) and
1886(s)(3)(D) of the Act. It also includes
the overall estimated 0.3 percent
decrease in estimated IPF outlier
payments as a percent of total payments
from the update to the outlier fixed
dollar loss threshold amount. Since we
are making the updates noted in
columns 4 through 7 in a budget-neutral
manner, they will not affect total
estimated IPF payments in the
aggregate. However, they will affect the
estimated distribution of payments
among providers.
Overall, urban IPFs are estimated to
experience a 1.8 percent increase in
payments in FY 2016 and rural IPFs are
estimated to experience a 0.6 percent
increase in payments in FY 2016. The
largest estimated decrease in payments
is 0.5 percent for rural IPFs that
transition to urban status as a result of
the new OMB delineations. As noted
previously, we proposed to mitigate the
effects of the loss of the rural adjustment
to these 37 providers by phasing the
adjustment out over 3 years. The largest
payment increase is estimated at 20.1
percent for IPFs that transition from
urban to rural status (thereby gaining
the 17 percent rural adjustment),
followed by a 3.4 percent increase for
IPFs in the Pacific region.
4. Effects of Updates to the IPFQR
Program
As discussed in section V. of this
proposed rule and in accordance with
section 1886(s)(4)(A)(i) of the Act, we
will implement a 2 percentage point
reduction in the FY 2018 market basket
update for IPFs that have failed to
comply with the IPFQR Program
requirements for FY 2018, including
reporting on the required measures. In
section V. of this proposed rule, we
discuss how the 2 percentage point
reduction will be applied. For FY 2015,
of the 1,725 IPFs eligible for the IPFQR
Program, 31 IPFs (1.8 percent) did not
receive the full market basket update
because of the IPFQR Program; 10 of
these IPFs chose not to participate and
21 did not meet the requirements of the
program. We anticipate that even fewer
IPFs would receive the reduction for FY
2016 as IPFs become more familiar with
the requirements. Thus, we estimate
that this policy will have a negligible
impact on overall IPF payments for FY
2016.
Based on the proposals made in this
rule, we estimate a total increase in
burden of 174.4 hours per IPF or
282,004.80 hours across all IPFs,
resulting in a total increase in financial
burden of $3,901.33 per IPF or
$6,308,447.38 across all IPFs. As
PO 00000
Frm 00052
Fmt 4701
Sfmt 4702
discussed in section VI. of this proposed
rule, we will attribute the costs
associated with the proposals to the year
in which these costs begin; for the
purposes of all the proposals in this
proposed rule, that year is FY 2016.
Further information on these estimates
can be found in section VI. of this
proposed rule.
We intend to closely monitor the
effects of this quality reporting program
on IPFs and help facilitate successful
reporting outcomes through ongoing
stakeholder education, national
trainings, and a technical help desk.
5. Effect on Beneficiaries
Under the IPF PPS, IPFs will receive
payment based on the average resources
consumed by patients for each day. We
do not expect changes in the quality of
care or access to services for Medicare
beneficiaries under the FY 2016 IPF
PPS, but we continue to expect that
paying prospectively for IPF services
would enhance the efficiency of the
Medicare program.
D. Alternatives Considered
The statute does not specify an update
strategy for the IPF PPS and is broadly
written to give the Secretary discretion
in establishing an update methodology.
Therefore, we are updating the IPF PPS
using the methodology published in the
November 2004 IPF PPS final rule, but
with a proposed IPF-specific market
basket, and updated labor-related share,
a proposed transitional wage index to
implement new OMB CBSA
designations, and a proposed phase-out
of the rural adjustment for the 37
providers changing from rural to urban
status as a result of the updated OMB
CBSA delineations used in the FY 2016
IPF PPS transitional wage index. We
considered implementing the new OMB
designations for the FY 2016 IPF PPS
wage index without a blend, but wanted
to mitigate any negative effects of CBSA
changes on IPFs. Additionally, we
considered abruptly ending the rural
adjustment for the 37 IPF providers
which changed from rural to urban
status as a result of the OMB CBSA
changes. However, we wanted to
propose relief from the effects of OMB’s
new CBSA delineations to the 37
providers which changed from rural to
urban status. We also considered
whether to allow a phase-in of the
updated LRS, but decided that the
impact of full implementation did not
warrant a phase-in, especially given that
we also proposed a transitional wage
index and a phase-out of the rural
adjustment for those IPFs which
changed status from rural to urban
under the new CBSAs. Additionally, for
E:\FR\FM\01MYP2.SGM
01MYP2
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
the IPFQR Program, alternatives were
not considered because the Program, as
designed, best achieves quality
reporting goals for the inpatient
psychiatric care setting, while
minimizing associated reporting
burdens on IPFs. Section V. of this
proposed rule discusses other benefits
and objectives of the Program.
TABLE 27—ACCOUNTING STATEMENT: ■ 2. Section 412.428 is amended by
CLASSIFICATION OF ESTIMATED EX- revising paragraph (e) to read as follows:
PENDITURES—Continued
§ 412.428 Publication of Updates to the
Change in Estimated Transfers From FY
2015 IPF PPS to FY 2016 IPF PPS:
Category
Transfers
FY 2016 Costs to Updating the Quality
Reporting Program for IPFs:
E. Accounting Statement
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/omb/circulars_
a004_a-4), in Table 27 below, we have
prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of this proposed rule. The
costs for data submission presented in
Table 27 are calculated in section VI,
which also discusses the benefits of data
collection. This table provides our best
estimate of the increase in Medicare
payments under the IPF PPS as a result
of the changes presented in this
proposed rule and based on the data for
1,617 IPFs in our database. Furthermore,
we present the estimated costs
associated with updating the IPFQR
program. The increases in Medicare
payments are classified as Federal
transfers to IPF Medicare providers.
Category
Costs
Annualized
Monetized
Costs for
IPFs to
Submit Data
(Quality
Reporting
Program)
$6.31 million.
In accordance with the provisions of
Executive Order 12866, this proposed
rule was reviewed by the Office of
Management and Budget.
List of Subjects in 42 CFR Part 412
Administrative practice and
procedure, Health facilities, Medicare,
Puerto Rico, Reporting and
recordkeeping requirements.
Change in Estimated Transfers From FY
2015 IPF PPS to FY 2016 IPF PPS:
PART 412—PROSPECTIVE PAYMENT
SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
Category
■
Annualized
Monetized
Transfers.
From Whom
to Whom?.
Transfers
1. The authority citation for part 412
continues to read as follows:
$80 million.
Federal Government to IPF
Medicare Providers.
inpatient psychiatric facility prospective
payment system.
*
*
*
*
*
(e) Describe the ICD–10–CM coding
changes and DRG classification changes
discussed in the annual update to the
hospital inpatient prospective payment
system regulations.
*
*
*
*
*
Dated: April 13, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: April 22, 2015.
Sylvia M. Burwell,
Secretary.
For the reasons set forth in the
preamble, the Centers for Medicare and
TABLE 27—ACCOUNTING STATEMENT: Medicaid Services proposes to amend
CLASSIFICATION OF ESTIMATED EX- 42 CFR chapter IV as set forth below:
PENDITURES
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh), sec. 124 of Pub. L. 106–113 (113
Stat. 1501A–332), sec. 1206 of Pub. L. 113–
67, and sec. 112 of Pub. L. 113–93.
Note: The following addendum will
not publish in the Code of Federal
Regulations.
Addendum—FY 2016 Proposed Rates and
Adjustment Factors
Per Diem Rate:
Federal Per Diem Base Rate ........
$745.19
Labor Share (0.749) .....................
558.15
Non-Labor Share (0.251) .............
187.04
Per Diem Rate Applying the 2 Percentage
Point Reduction
Federal Per Diem Base Rate ........
$730.56
Labor Share (0.749) .....................
547.19
Non-Labor Share (0.251) .............
183.37
Fixed Dollar Loss Threshold Amount:
$9,825.
Wage Index Budget-Neutrality Factor:
1.0041.
Facility Adjustments:
Rural Adjustment
1.17
Factor.
Teaching Adjustment 0.5150
Factor.
Wage Index ............... Pre-reclass Hospital
Wage Index
(FY2015)
Cost of Living Adjustments (COLAs):
Cost of living
adjustment factor
Area
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
25063
Alaska:
City of Anchorage and 80-kilometer (50-mile) radius by road ...............................................................................................
City of Fairbanks and 80-kilometer (50-mile) radius by road ................................................................................................
City of Juneau and 80-kilometer (50-mile) radius by road ....................................................................................................
Rest of Alaska ........................................................................................................................................................................
Hawaii:
City and County of Honolulu ..................................................................................................................................................
County of Hawaii ....................................................................................................................................................................
County of Kauai ......................................................................................................................................................................
County of Maui and County of Kalawao ................................................................................................................................
1.23
1.23
1.23
1.25
1.25
1.19
1.25
1.25
Patient Adjustments:
ECT—Per Treatment .....................................................................................................................................................................
ECT—Per Treatment Applying the 2 Percentage Point Reduction ...........................................................................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00053
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
$320.82
314.52
25064
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
Variable Per Diem Adjustments:
Adjustment factor
Day 1—Facility Without a Qualifying Emergency Department .....................................................................................................
Day 1—Facility With a Qualifying Emergency Department ..........................................................................................................
Day 2 .............................................................................................................................................................................................
Day 3 .............................................................................................................................................................................................
Day 4 .............................................................................................................................................................................................
Day 5 .............................................................................................................................................................................................
Day 6 .............................................................................................................................................................................................
Day 7 .............................................................................................................................................................................................
Day 8 .............................................................................................................................................................................................
Day 9 .............................................................................................................................................................................................
Day 10 ...........................................................................................................................................................................................
Day 11 ...........................................................................................................................................................................................
Day 12 ...........................................................................................................................................................................................
Day 13 ...........................................................................................................................................................................................
Day 14 ...........................................................................................................................................................................................
Day 15 ...........................................................................................................................................................................................
Day 16 ...........................................................................................................................................................................................
Day 17 ...........................................................................................................................................................................................
Day 18 ...........................................................................................................................................................................................
Day 19 ...........................................................................................................................................................................................
Day 20 ...........................................................................................................................................................................................
Day 21 ...........................................................................................................................................................................................
After Day 21 ...................................................................................................................................................................................
1.19
1.31
1.12
1.08
1.05
1.04
1.02
1.01
1.01
1.00
1.00
0.99
0.99
0.99
0.99
0.98
0.97
0.97
0.96
0.95
0.95
0.95
0.92
Age Adjustments:
Age
(in years)
Adjustment factor
Under 45 ........................................................................................................................................................................................
45 and under 50 ............................................................................................................................................................................
50 and under 55 ............................................................................................................................................................................
55 and under 60 ............................................................................................................................................................................
60 and under 65 ............................................................................................................................................................................
65 and under 70 ............................................................................................................................................................................
70 and under 75 ............................................................................................................................................................................
75 and under 80 ............................................................................................................................................................................
80 and over ....................................................................................................................................................................................
1.00
1.01
1.02
1.04
1.07
1.10
1.13
1.15
1.17
DRG Adjustments:
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
MS–DRG
056
057
080
081
876
880
881
882
883
884
885
886
887
894
895
896
897
MS–DRG descriptions
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
Adjustment factor
Degenerative nervous system disorders w MCC ..........................................................................................
Degenerative nervous system disorders w/o MCC .......................................................................................
Nontraumatic stupor & coma w MCC ............................................................................................................
Nontraumatic stupor & coma w/o MCC .........................................................................................................
O.R. procedure w principal diagnoses of mental illness ...............................................................................
Acute adjustment reaction & psychosocial dysfunction .................................................................................
Depressive neuroses ......................................................................................................................................
Neuroses except depressive ..........................................................................................................................
Disorders of personality & impulse control ....................................................................................................
Organic disturbances & mental retardation ...................................................................................................
Psychoses ......................................................................................................................................................
Behavioral & developmental disorders ..........................................................................................................
Other mental disorder diagnoses ...................................................................................................................
Alcohol/drug abuse or dependence, left AMA ...............................................................................................
Alcohol/drug abuse or dependence w rehabilitation therapy .........................................................................
Alcohol/drug abuse or dependence w/o rehabilitation therapy w MCC ........................................................
Alcohol/drug abuse or dependence w/o rehabilitation therapy w/o MCC .....................................................
1.05
1.07
1.22
1.05
0.99
1.02
1.02
1.03
1.00
0.99
0.92
0.97
1.02
0.88
Comorbidity Adjustments:
Comorbidity
Adjustment factor
Developmental Disabilities .............................................................................................................................................................
Coagulation Factor Deficit .............................................................................................................................................................
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00054
Fmt 4701
Sfmt 4702
E:\FR\FM\01MYP2.SGM
01MYP2
1.04
1.13
Federal Register / Vol. 80, No. 84 / Friday, May 1, 2015 / Proposed Rules
Comorbidity
Adjustment factor
Tracheostomy ................................................................................................................................................................................
Eating and Conduct Disorders ......................................................................................................................................................
Infectious Diseases ........................................................................................................................................................................
Renal Failure, Acute ......................................................................................................................................................................
Renal Failure, Chronic ...................................................................................................................................................................
Oncology Treatment ......................................................................................................................................................................
Uncontrolled Diabetes Mellitus ......................................................................................................................................................
Severe Protein Malnutrition ...........................................................................................................................................................
Drug/Alcohol Induced Mental Disorders ........................................................................................................................................
Cardiac Conditions ........................................................................................................................................................................
Gangrene .......................................................................................................................................................................................
Chronic Obstructive Pulmonary Disease .......................................................................................................................................
Artificial Openings—Digestive & Urinary .......................................................................................................................................
Severe Musculoskeletal & Connective Tissue Diseases ..............................................................................................................
Poisoning .......................................................................................................................................................................................
[FR Doc. 2015–09880 Filed 4–24–15; 4:15 pm]
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
BILLING CODE 4120–01–P
VerDate Sep<11>2014
19:04 Apr 30, 2015
Jkt 235001
PO 00000
Frm 00055
Fmt 4701
25065
Sfmt 9990
E:\FR\FM\01MYP2.SGM
01MYP2
1.06
1.12
1.07
1.11
1.11
1.07
1.05
1.13
1.03
1.11
1.10
1.12
1.08
1.09
1.11
]]>Agencies
[Federal Register Volume 80, Number 84 (Friday, May 1, 2015)]
[Proposed Rules]
[Pages 25011-25065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09880]
[[Page 25011]]
Vol. 80
Friday,
No. 84
May 1, 2015
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Parts 412
Medicare Program; Inpatient Psychiatric Facilities Prospective Payment
System--Update for Fiscal Year Beginning October 1, 2015 (FY 2016);
Proposed Rule
Federal Register / Vol. 80 , No. 84 / Friday, May 1, 2015 / Proposed
Rules
[[Page 25012]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 412
[CMS-1627-P]
RIN 0938-AS47
Medicare Program; Inpatient Psychiatric Facilities Prospective
Payment System--Update for Fiscal Year Beginning October 1, 2015 (FY
2016)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would update the prospective payment rates
for Medicare inpatient hospital services provided by inpatient
psychiatric facilities (IPFs) (which are freestanding IPFs and
psychiatric units of an acute care hospital or critical access
hospital). These changes would be applicable to IPF discharges
occurring during the fiscal year (FY) beginning October 1, 2015 through
September 30, 2016 (FY 2016). This proposed rule also proposes: A new
IPF-specific market basket; to update the IPF labor-related share; a
transition to new Core Based Statistical Area (CBSA) designations in
the FY 2016 IPF Prospective Payment System (PPS) wage index; to phase
out the rural adjustment for IPF providers whose status changes from
rural to urban as a result of the proposed wage index CBSA changes; and
new quality measures and reporting requirements under the IPF quality
reporting program. This proposed rule also reminds IPFs of the October
1, 2015 implementation of the International Classification of Diseases,
10th Revision, Clinical Modification (ICD-10-CM), and updates providers
on the status of IPF PPS refinements.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on June 23, 2015.
ADDRESSES: In commenting, please refer to file code CMS-1627-P. 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 ``Submit a
comment'' instructions.
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-1627-P, P.O. Box 8010,
Baltimore, MD 21244-1850.
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-1627-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments ONLY to the following addresses prior to
the close of the comment period:
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,
call telephone number (410) 786-4492 in advance to schedule your
arrival with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Katherine Lucas or Jana Lindquist, (410) 786-7723, for general
information.
Hudson Osgood, (410) 786-7897 or Bridget Dickensheets, (410) 786-
8670, for information regarding the market basket and labor-related
share.
Theresa Bean, (410) 786-2287, for information regarding the
regulatory impact analysis.
Rebecca Kliman, (410) 786-9723, or Jeffrey Buck, (410) 786-0407,
for information regarding the inpatient psychiatric facility quality
reporting program.
SUPPLEMENTARY INFORMATION:
Availability of Certain Tables Exclusively Through the Internet on the
CMS Web Site
In the past, tables setting forth the Wage Index for Urban Areas
Based on CBSA Labor Market Areas and the Wage Index Based on CBSA Labor
Market Areas for Rural Areas were published in the Federal Register as
an Addendum to the annual PPS rulemaking (that is, the PPS proposed and
final rules or, when applicable, the current update notice). However,
beginning in FY 2015, these wage index tables are no longer published
in the Federal Register. Instead, these tables will be available
exclusively through the Internet. The wage index tables for this
proposed rule are available exclusively through the Internet on the CMS
Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/IPFPPS/WageIndex.html.
To assist readers in referencing sections contained in this
document, we are providing the following table of contents.
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Impacts
II. Background
A. Overview of the Legislative Requirements of the IPF PPS
B. Overview of the IPF PPS
C. Annual Requirements for Updating the IPF PPS
III. Provisions of the Proposed Rule
A. Proposed Market Basket for the IPF PPS
1. Background
2. Overview of the Proposed 2012-Based IPF Market Basket
3. Creating an IPF-Specific Market Basket
a. Development of Cost Categories and Weights
i. Medicare Cost Reports
ii. Final Major Cost Category Computation
iii. Derivation of the Detailed Operating Cost Weights
iv. Derivation of the Detailed Capital Cost Weights
v. Proposed 2012-Based IPF Market Basket Cost Categories and
Weights
b. Selection of Price Proxies
i. Price Proxies for the Operating Portion of the Proposed 2012-
Based IPF Market Basket
ii. Price Proxies for the Capital Portion of the Proposed 2012-
Based IPF Market Basket
iii. Summary of All Price Proxies of the Proposed 2012-Based IPF
Market Basket
4. Proposed FY 2016 Market Basket Update
5. Proposed Productivity Adjustment
6. Proposed Labor-Related Share
B. Proposed Updates to the IPF PPS Rates for FY Beginning
October 1, 2016
1. Determining the Standardized Budget-Neutral Federal Per Diem
Base Rate
[[Page 25013]]
2. Proposed Update of the Federal Per Diem Base Rate and
Electroconvulsive Therapy Rate
C. Proposed Updates to the IPF PPS Patient-Level Adjustment
Factors
1. Overview of the IPF PPS Adjustment Factors
2. IPF-PPS Patient-Level Adjustments
a. MS-DRG Assignment
b. Payment for Comorbid Conditions
3. Patient Age Adjustments
4. Variable Per Diem Adjustments
D. Proposed Updates to the IPF PPS Facility-Level Adjustments
1. Proposed Wage Index Adjustment
a. Background
b. Proposed Wage Index for FY 2016
c. OMB Bulletins and Proposed Transitional Wage Index
d. Adjustment for Rural Location and Proposal To Phase Out the
Rural Adjustment for IPFs Losing Their Rural Adjustment Due to CBSA
Changes
e. Budget Neutrality Adjustment
2. Teaching Adjustment
3. Cost of Living Adjustment for IPFs Located in Alaska and
Hawaii
4. Adjustment for IPFs With a Qualifying Emergency Department
(ED)
E. Other Payment Adjustments and Policies
1. Outlier Payment Overview
2. Proposed Update to the Outlier Fixed Dollar Loss Threshold
Amount
3. Proposed Update to IPF Cost-to-Charge Ratio Ceilings
IV. Updates on Other Payment Policy Issues
A. Implementation of ICD-10-CM and ICD-10-PCS
B. Update on IPF PPS Refinements
V. Inpatient Psychiatric Facilities Quality Reporting (IPFQR)
Program
A. Background
1. Statutory Authority
2. Covered Entities
3. Considerations in Selecting Quality Measures
B. Retention of IPFQR Program Measures Adopted in Previous
Payment Determinations
C. Proposed Removal of Quality Measure From the IPFQR Program
Measure Set
D. New Quality Measures Proposed for the FY 2018 Payment
Determination and Subsequent Years
1. TOB-3 Tobacco Use Treatment Provided or Offered at Discharge
and the Subset Measure TOB-3a Tobacco Use Treatment at Discharge
2. SUB-2 Alcohol Use Brief Intervention Provided or Offered and
SUB-2a Alcohol Use Brief Intervention
3. Transition Record With Specified Elements Received by
Discharged Patients (Discharges From an Inpatient Facility to Home/
Self Care or Any Other Site of Care)
4. Timely Transmission of Transition Record (Discharges From an
Inpatient Facility to Home/Self Care or Any Other Site of Care)
5. Screening for Metabolic Disorders
6. Summary of Measures Proposed for Adoption and Removal for FY
2018 and Subsequent Years
E. Possible IPFQR Program Measures and Topics for Future
Consideration
F. Changes to Reporting Requirements
1. Proposed Changes to Reporting by Age and Quarter
2. Proposed Changes to Aggregate Population Count Reporting
3. Proposed Changes to Sampling Requirements for FY 2018 Payment
Determination and Subsequent Years
G. Public Display and Review Requirements
H. Form, Manner, and Timing of Quality Data Submission
1. Procedural and Submission Requirements
2. Proposed Change to the Reporting Periods and Submission
Timeframes
3. Population, Sampling, and Minimum Case Threshold
4. Data Accuracy and Completeness Acknowledgement (DACA)
Requirements
I. Reconsideration and Appeals Procedures
J. Exceptions to Quality Reporting Requirements
VI. Collection of Information Requirements
A. Wage Estimates
B. ICRs Regarding the Inpatient Psychiatric Quality Reporting
(IPFQR) Program
1. Changes in Time Required to Chart-Abstract Data Based on
Proposed Reporting Requirements
2. Estimated Burden of IPFQR Program Proposals
C. Summary of Annual Burden Estimates for Proposed Requirements
D. ICRs Regarding the Hospital and Health Care Complex Cost
Report
E. Submission of PRA-Related Comments
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Anticipated Effects
1. Budgetary Impact
2. Impact on Providers
3. Results
4. Effects of Updates to the IPFQR Program
5. Effect on Beneficiaries
D. Alternatives Considered
E. Accounting Statement
Regulations Text
Addendum--FY 2016 Proposed Rates and Adjustment Factors
Acronyms
Because of the many terms to which we refer by acronym in this
proposed rule, we are listing the acronyms used and their corresponding
meanings in alphabetical order below:
ADC Average Daily Census
AHA American Hospital Association
AHE Average Hourly Earning
BBRA Medicare, Medicaid and SCHIP [State Children's Health Insurance
Program] Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BEA Bureau of Economic Analysis
BLS Bureau of Labor Statistics
CAH Critical Access Hospital
CBSA Core-Based Statistical Area
CCR Cost-to-Charge Ratio
CPI Consumer Price Index
CPI-U Consumer Price Index for all Urban Consumers
DRGs Diagnosis-Related Groups
ECI Employment Cost Index
ESRD End State Renal Disease
FR Federal Register
FTE Full-time equivalent
FY Federal Fiscal Year (October 1 through September 30)
GDP Gross Domestic Product
GME Graduate Medical Education
HHA Home Health Agency
HBIPS Hospital Based Inpatient Psychiatric Services
ICD-9-CM International Classification of Diseases, 9th Revision,
Clinical Modification
ICD-10-CM International Classification of Diseases, 10th Revision,
Clinical Modification
ICD-10-PCS International Classification of Diseases, 10th Revision,
Procedure Coding System
IGI IHS Global Insight, Inc.
I-O Input--Output
IPFs Inpatient Psychiatric Facilities
IPFQR Inpatient Psychiatric Facilities Quality Reporting
IRFs Inpatient Rehabilitation Facilities
LOS Length of Stay
LTCHs Long-Term Care Hospitals
MAC Medicare Administrative Contractor
MedPAR Medicare Provider Analysis and Review File
MFP Multifactor Productivity
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003
MSA Metropolitan Statistical Area
NAICS North American Industry Classification System
NQF National Quality Forum
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient Prospective Payment System
PLI Professional Liability Insurance
PPI Producer Price Index
PPS Prospective Payment System
RPL Rehabilitation, Psychiatric, and Long-Term Care
RY Rate Year (July 1 through June 30)
SCHIP State Children's Health Insurance Program
SNF Skilled Nursing Facility
SOC Standard Occupational Classification
TEFRA Tax Equity and Fiscal Responsibility Act of 1982 (Pub. L. 97-
248)
I. Executive Summary
A. Purpose
This proposed rule would update the prospective payment rates for
Medicare inpatient hospital services provided by inpatient psychiatric
facilities (IPFs) for discharges occurring during the fiscal year (FY)
beginning October 1, 2015 through September 30, 2016. For the Inpatient
Psychiatric Facility Quality Reporting (IPFQR) Program, it also would
change the measures collected under the program and modify reporting
requirements for all program measures.
B. Summary of the Major Provisions
In this proposed rule, we would update the IPF Prospective Payment
[[Page 25014]]
System (PPS), as specified in 42 CFR 412.428. The updates include the
following:
Effective for FY 2016 IPF PPS update, we are proposing to
adopt a FY 2012-based IPF-specific market basket. We propose to adjust
the FY 2012-based IPF market basket update (currently estimated to be
2.7 percent) by a reduction for economy-wide productivity (currently
estimated to be 0.6 percentage point) as required by section
1886(s)(2)(A)(i) of the Social Security Act (the Act), and further
reduced by 0.2 percentage point as required by section
1886(s)(2)(A)(ii) of the Act, resulting in an estimated market basket
update of 1.9 percent.
We propose to update the IPF per diem rate from $728.31 to
$745.19. Providers that failed to report quality data for FY 2016
payment would receive a proposed FY 2016 per diem rate of $730.56.
We propose to update the electroconvulsive therapy (ECT)
payment from $313.55 to $320.82. Providers that failed to report
quality data for FY 2016 payment would receive a proposed FY 2016 ECT
rate of $314.52.
We propose to adopt new Office of Management and Budget
(OMB) Core-Based Statistical Area (CBSA) delineations for the FY 2016
IPF PPS wage index and future IPF PPS wage indices. We propose to
implement these CBSA changes using a 1-year transition with a blended
wage index for all providers, consisting of a blend of fifty percent of
the FY 2016 IPF wage index using the current OMB delineations and fifty
percent of the FY 2016 IPF wage index using the revised OMB
delineations.
We propose to phase out the rural adjustment for the 37
rural IPFs that would be re-designated as urban IPFs due to the OMB
CBSA changes. Specifically, we propose to phase out the 17 percent
rural adjustment for these 37 providers over 3 years (2-thirds of the
adjustment given in FY 2016, one-third of the adjustment given in FY
2017, and no rural adjustment thereafter).
We propose to use the updated Labor Related Share of 74.9
percent and CBSA rural and urban wage indices for FY 2016, and
establish a wage index budget-neutrality adjustment of 1.0041.
We propose to update the fixed dollar loss threshold
amount from $8,755 to $9,825 in order to maintain outlier payments that
are 2 percent of total IPF PPS payments.
We propose that the national urban and rural cost-to-
charge ratio (CCR) ceilings for FY 2016 would be 1.6881 and 1.9041,
respectively, and the national median CCR would be 0.4675 for urban
IPFs and 0.6210 for rural IPFs. The national median CCR is applied to
new IPFs that have not yet submitted their first Medicare cost report,
to IPFs for which the CCR calculation data are inaccurate or
incomplete, or to IPFs whose overall CCR exceeds 3 standard deviations
above the national geometric mean. These amounts are used in the
outlier calculation to determine if an IPF's CCR is statistically
accurate and for new providers without an established CCR.
We note that IPF PPS patient-level and facility-level
adjustments, other than those mentioned above, would remain the same as
in FY 2015.
In addition:
We remind providers that International Classification of
Diseases, 10th Revision, Clinical Modification/Procedure Coding System
(ICD-10-CM/PCS) will be implemented on October 1, 2015.
As we continue our analysis for future IPF PPS
refinements, we find, from preliminary analysis of 2012 to 2013 data,
that over 20 percent of IPF stays reported no ancillary costs, such as
laboratory and drug costs, in their cost reports, or laboratory or drug
charges on their claims. Because we expect that most patients requiring
hospitalization for active psychiatric treatment would need drugs and
laboratory services, we remind providers that the IPF per diem payment
rate includes the cost of all ancillary services, including drugs and
laboratory services. CMS pays only the inpatient psychiatric facility
for services furnished to a Medicare beneficiary who is an inpatient of
that inpatient psychiatric facility, except for certain professional
services, and payments are considered to be payments in full for all
inpatient hospital services provided directly or under arrangement (see
42 CFR 412.404(d)), as specified in 42 CFR 409.10.
For the Inpatient Psychiatric Facility Quality Reporting (IPFQR)
Program, we are making several proposals related to measures and
several proposals related to data submission for the IPFQR Program
measures. We are proposing to adopt five new measures beginning with
the fiscal year (FY) 2018 payment determination:
TOB-3--Tobacco Use Treatment Provided or Offered at
Discharge and the subset measure TOB-3a Tobacco Use Treatment at
Discharge (National Quality Forum (NQF) #1656);
SUB-2--Alcohol Use Brief Intervention Provided or Offered
and the subset measure SUB-2a (NQF #1663);
Transition Record with Specified Elements Received by
Discharged Patients (Discharges from an Inpatient Facility to Home/Self
Care or Any Other Site of Care) (NQF) #0647);
Timely Transmission of Transition Record (Discharges from
an Inpatient Facility to Home/Self Care or Any Other Site of Care) (NQF
#0648); and
Screening for Metabolic Disorders.
If Transition Record with Specified Elements Received by Discharged
Patients (Discharges from an Inpatient Facility to Home/Self Care or
Any Other Site of Care) is adopted, we are proposing to remove Hospital
Based Inpatient Psychiatric Services (HBIPS)-6 Post-Discharge
Continuing Care Plan (NQF #0557). Likewise, if Timely Transmission of
Transition Record (Discharges from an Inpatient Facility to Home/Self
Care or Any Other Site of Care) (NQF #0648) is adopted, we are
proposing to remove HBIPS-7 Post-Discharge Continuing Care Plan
Transmitted to the Next Level of Care Provider Upon Discharge (NQF
#0558). We are also proposing to remove one measure, HBIPS-4 Patients
Discharged on Multiple Antipsychotic Medications, beginning with the FY
2017 payment determination.
We are also making several proposals regarding how facilities
should report data for IPFQR Program measures:
We are proposing to require that measures be reported as a
single yearly count rather than by quarter and age beginning with the
FY 2017 payment determination;
We are proposing to require that aggregate population
counts be reported as a single yearly number rather than by quarter
beginning with the FY 2017 payment determination; and
We are proposing to allow uniform sampling for certain
measures beginning with the FY 2018 payment determination.
C. Summary of Impacts
[[Page 25015]]
------------------------------------------------------------------------
Provision description Total transfers
------------------------------------------------------------------------
FY 2016 IPF PPS payment rate update.... The overall economic impact of
this proposed rule is an
estimated $80 million in
increased payments to IPFs
during FY 2016.
------------------------------------------------------------------------
Provision description Costs
------------------------------------------------------------------------
New quality reporting program The total costs beginning in FY
requirements. 2016 for IPFs as a result of
the proposed new quality
reporting requirements are
estimated to be $6.31 million.
------------------------------------------------------------------------
II. Background
A. Overview of the Legislative Requirements for the IPF PPS
Section 124 of the Medicare, Medicaid, and SCHIP (State Children's
Health Insurance Program) Balanced Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106-113) required the establishment and implementation of an
IPF PPS. Specifically, section 124 of the BBRA mandated that the
Secretary of the Department Health and Human Services (the Secretary)
develop a per diem PPS for inpatient hospital services furnished in
psychiatric hospitals and psychiatric units including an adequate
patient classification system that reflects the differences in patient
resource use and costs among psychiatric hospitals and psychiatric
units.
Section 405(g)(2) of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173) extended the IPF
PPS to distinct part psychiatric units of critical access hospitals
(CAHs).
Section 3401(f) of the Patient Protection and Affordable Care Act
(Pub. L. 111-148) as amended by section 10319(e) of that Act and by
section 1105(d) of the Health Care and Education Reconciliation Act of
2010 (Pub. L. 111-152) (hereafter referred to as ``the Affordable Care
Act'') added subsection (s) to section 1886 of the Act.
Section 1886(s)(1) of the Act titled ``Reference to Establishment
and Implementation of System'' refers to section 124 of the BBRA, which
relates to the establishment of the IPF PPS.
Section 1886(s)(2)(A)(i) of the Act requires the application of the
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of
the Act to the IPF PPS for the Rate Year (RY) beginning in 2012 (that
is, a RY that coincides with a FY) and each subsequent RY. For the RY
beginning in 2015 (that is, FY 2016), the current estimate of the
productivity adjustment would be equal to 0.6 percentage point, which
we are proposing in this FY 2016 proposed rule.
Section 1886(s)(2)(A)(ii) of the Act requires the application of an
``other adjustment'' that reduces any update to an IPF PPS base rate by
percentages specified in section 1886(s)(3) of the Act for the RY
beginning in 2010 through the RY beginning in 2019. For the RY
beginning in 2015 (that is, FY 2016), section 1886(s)(3)(D) of the Act
requires the reduction to be 0.2 percentage point. We are proposing
that reduction in this FY 2016 IPF PPS proposed rule.
Section 1886(s)(4) of the Act requires the establishment of a
quality data reporting program for the IPF PPS beginning in RY 2014.
To implement and periodically update these provisions, we have
published various proposed and final rules in the Federal Register. For
more information regarding these rules, see the CMS Web site at https://www.cms.hhs.gov/InpatientPsychFacilPPS/.
B. Overview of the IPF PPS
The November 2004 IPF PPS final rule (69 FR 66922) established the
IPF PPS, as required by section 124 of the BBRA and codified at subpart
N of part 412 of the Medicare regulations. The November 2004 IPF PPS
final rule set forth the per diem Federal rates for the implementation
year (the 18-month period from January 1, 2005 through June 30, 2006),
and provided payment for the inpatient operating and capital costs to
IPFs for covered psychiatric services they furnish (that is, routine,
ancillary, and capital costs, but not costs of approved educational
activities, bad debts, and other services or items that are outside the
scope of the IPF PPS). Covered psychiatric services include services
for which benefits are provided under the fee-for-service Part A
(Hospital Insurance Program) of the Medicare program.
The IPF PPS established the Federal per diem base rate for each
patient day in an IPF derived from the national average daily routine
operating, ancillary, and capital costs in IPFs in FY 2002. The average
per diem cost was updated to the midpoint of the first year under the
IPF PPS, standardized to account for the overall positive effects of
the IPF PPS payment adjustments, and adjusted for budget-neutrality.
The Federal per diem payment under the IPF PPS is comprised of the
Federal per diem base rate described above and certain patient- and
facility-level payment adjustments that were found in the regression
analysis to be associated with statistically significant per diem cost
differences.
The patient-level adjustments include age, Diagnosis-Related Group
(DRG) assignment, comorbidities, and variable per diem adjustments to
reflect higher per diem costs in the early days of an IPF stay.
Facility-level adjustments include adjustments for the IPF's wage
index, rural location, teaching status, a cost-of-living adjustment for
IPFs located in Alaska and Hawaii, and the presence of a qualifying
emergency department (ED).
The IPF PPS provides additional payment policies for: Outlier
cases; interrupted stays; and a per treatment adjustment for patients
who undergo electroconvulsive therapy (ECT). During the IPF PPS
mandatory 3-year transition period, stop-loss payments were also
provided; however, since the transition ended in 2008, these payments
are no longer available.
A complete discussion of the regression analysis that established
the IPF PPS adjustment factors appears in the November 2004 IPF PPS
final rule (69 FR 66933 through 66936).
Section 124 of the BBRA did not specify an annual rate update
strategy for the IPF PPS and was broadly written to give the Secretary
discretion in establishing an update methodology. Therefore, in the
November 2004 IPF PPS final rule, we implemented the IPF PPS using the
following update strategy:
Calculate the final Federal per diem base rate to be
budget-neutral for the 18-month period of January 1, 2005 through June
30, 2006.
Use a July 1 through June 30 annual update cycle.
Allow the IPF PPS first update to be effective for
discharges on or after July 1, 2006 through June 30, 2007.
In RY 2012, we proposed and finalized switching the IPF PPS payment
rate update from a rate year that begins on July 1 and ends on June 30
to one that coincides with the Federal fiscal year that begins October
1 and ends on September 30. In order to
[[Page 25016]]
transition from one timeframe to another, the RY 2012 IPF PPS covered a
15-month period from July 1, 2011 through September 30, 2012.
Therefore, the update cycle for FY 2016 will be October 1, 2015 through
September 30, 2016. For further discussion of the 15-month market
basket update for RY 2012 and changing the payment rate update period
to coincide with a FY period, we refer readers to the RY 2012 IPF PPS
proposed rule (76 FR 4998) and the RY 2012 IPF PPS final rule (76 FR
26432).
C. Annual Requirements for Updating the IPF PPS
In November 2004, we implemented the IPF PPS in a final rule that
appeared in the November 15, 2004 Federal Register (69 FR 66922). In
developing the IPF PPS, to ensure that the IPF PPS is able to account
adequately for each IPF's case-mix, we performed an extensive
regression analysis of the relationship between the per diem costs and
certain patient and facility characteristics to determine those
characteristics associated with statistically significant cost
differences on a per diem basis. For characteristics with statistically
significant cost differences, we used the regression coefficients of
those variables to determine the size of the corresponding payment
adjustments.
In that final rule, we explained that we believe it is important to
delay updating the adjustment factors derived from the regression
analysis until we have IPF PPS data that include as much information as
possible regarding the patient-level characteristics of the population
that each IPF serves. Therefore, we indicated that we did not intend to
update the regression analysis and the patient- and facility-level
adjustments until we complete that analysis. Until that analysis is
complete, we stated our intention to publish a notice in the Federal
Register each spring to update the IPF PPS (71 FR 27041). We have begun
the necessary analysis to make refinements to the IPF PPS using more
current data to set the adjustment factors; however, we are not
proposing any refinements in this proposed rule. Rather, as explained
in section IV.B. of this proposed rule, we expect that in future
rulemaking we will be ready to propose potential refinements.
In the May 6, 2011 IPF PPS final rule (76 FR 26432), we changed the
payment rate update period to a RY that coincides with a FY update.
Therefore, update notices are now published in the Federal Register in
the summer to be effective on October 1. When proposing changes in IPF
payment policy, a proposed rule would be issued in the spring and the
final rule in the summer in order to be effective on October 1. For
further discussion on changing the IPF PPS payment rate update period
to a RY that coincides with a FY, see the IPF PPS final rule published
in the Federal Register on May 6, 2011 (76 FR 26434 through 26435). For
a detailed list of updates to the IPF PPS, see 42 CFR 412.428.
Our most recent IPF PPS annual update occurred in an August 6,
2014, Federal Register final rule (79 FR 45938) (hereinafter referred
to as the August 2014 IPF PPS final rule) that set forth updates to the
IPF PPS payment rates for FY 2015. That rule updated the IPF PPS per
diem payment rates that were published in the August 2013 IPF PPS
notice (78 FR 46734) in accordance with our established policies.
III. Provisions of the Proposed Rule
A. Proposed Market Basket for the IPF PPS
1. Background
The input price index that was used to develop the IPF PPS was the
Excluded Hospital with Capital market basket. This market basket was
based on 1997 Medicare cost reports for Medicare participating IRFs,
IPFs, LTCHs, cancer hospitals, and children's hospitals. Although
``market basket'' technically describes the mix of goods and services
used in providing health care at a given point in time, this term is
also commonly used to denote the input price index (that is, cost
category weights and price proxies) derived from that market basket.
Accordingly, the term ``market basket,'' as used in this document,
refers to an input price index.
Beginning with the May 2006 IPF PPS final rule (71 FR 27046 through
27054), IPF PPS payments were updated using a 2002-based RPL market
basket reflecting the operating and capital cost structures for
freestanding IRFs, freestanding IPFs, and LTCHs. Cancer and children's
hospitals were excluded from the RPL market basket because their
payments are based entirely on reasonable costs subject to rate-of-
increase limits established under the authority of section 1886(b) of
the Act and not through a PPS. Also, the 2002 cost structures for
cancer and children's hospitals are noticeably different than the cost
structures of freestanding IRFs, freestanding IPFs, and LTCHs. See the
May 2006 IPF PPS final rule (71 FR 27046 through 27054) for a complete
discussion of the 2002-based RPL market basket.
In the May 1, 2009 IPF PPS notice (74 FR 20376), we expressed our
interest in exploring the possibility of creating a stand-alone IPF
market basket that reflects the cost structures of only IPF providers.
One available option was to combine the Medicare cost report data from
freestanding IPF providers with Medicare cost report data from
hospital-based IPF providers. We indicated that an examination of the
Medicare cost report data comparing freestanding IPFs and hospital-
based IPFs showed differences between cost levels and cost structures.
At that time, we were unable to fully understand these differences even
after reviewing explanatory variables such as geographic variation,
case mix (including DRG, comorbidity, and age), urban or rural status,
teaching status, and presence of a qualifying emergency department. As
a result, we continued to research ways to reconcile the differences
and solicited public comment for additional information that might help
us to better understand the reasons for the variations in costs and
cost structures, as indicated by the Medicare cost report data (74 FR
20376). We summarized the public comments we received and our responses
in the April 2010 IPF PPS notice (75 FR 23111 through 23113). Despite
receiving comments from the public on this issue, we were still unable
to sufficiently reconcile the observed differences in costs and cost
structures between hospital-based and freestanding IPFs, and,
therefore, we did not believe it to be appropriate at that time to
incorporate data from hospital-based IPFs with those of freestanding
IPFs to create a stand-alone IPF market basket.
Beginning with the RY 2012 IPF PPS final rule (76 FR 26432), IPF
PPS payments were updated using a 2008-based RPL market basket
reflecting the operating and capital cost structures for freestanding
IRFs, freestanding IPFs, and LTCHs. The major changes for RY 2012
included: Updating the base year from FY 2002 to FY 2008; using a more
specific composite chemical price proxy; breaking the professional fees
cost category into 2 separate categories (Labor-related and Nonlabor-
related); and adding 2 additional cost categories (Administrative and
Facilities Support Services and Financial Services), which were
previously included in the residual All Other Services cost categories.
The RY 2012 IPF PPS proposed rule (76 FR 4998) and RY 2012 final rule
(76 FR 26432) contain a complete discussion of the development of the
2008-based RPL market basket.
For FY 2016, we are proposing to create a 2012-based IPF market
basket, using Medicare cost report data for both
[[Page 25017]]
freestanding and hospital-based IPFs. In the following discussion, we
provide an overview of the proposed market basket and describe the
methodologies used to determine the operating and capital portions of
the proposed 2012-based IPF market basket.
2. Overview of the Proposed 2012-Based IPF Market Basket
The proposed 2012-based IPF market basket is a fixed-weight,
Laspeyres-type price index. A Laspeyres price index measures the change
in price, over time, of the same mix of goods and services purchased in
the base period. Any changes in the quantity or mix of goods and
services (that is, intensity) purchased over time relative to a base
period are not measured.
The index itself is constructed in 3 steps. First, a base period is
selected (in this proposed rule, the base period is FY 2012) and total
base period expenditures are estimated for a set of mutually exclusive
and exhaustive spending categories with the proportion of total costs
that each category represents being calculated. These proportions are
called cost or expenditure weights. Second, each expenditure category
is matched to an appropriate price or wage variable, referred to as a
price proxy. In nearly every instance, these price proxies are derived
from publicly available statistical series that are published on a
consistent schedule (preferably at least on a quarterly basis).
Finally, the expenditure weight for each cost category is multiplied by
the level of its respective price proxy. The sum of these products
(that is, the expenditure weights multiplied by their price levels) for
all cost categories yields the composite index level of the market
basket in a given period. Repeating this step for other periods
produces a series of market basket levels over time. Dividing an index
level for a given period by an index level for an earlier period
produces a rate of growth in the input price index over that timeframe.
As noted above, the market basket is described as a fixed-weight
index because it represents the change in price over time of a constant
mix (quantity and intensity) of goods and services needed to furnish
IPF services. The effects on total expenditures resulting from changes
in the mix of goods and services purchased subsequent to the base
period are not measured. For example, an IPF hiring more nurses to
accommodate the needs of patients would increase the volume of goods
and services purchased by the IPF, but would not be factored into the
price change measured by a fixed-weight IPF market basket. Only when
the index is rebased would changes in the quantity and intensity be
captured, with those changes being reflected in the cost weights.
Therefore, we rebase the market basket periodically so that the cost
weights reflect recent changes in the mix of goods and services that
IPFs purchase (facility inputs) to furnish inpatient care between base
periods.
3. Creating an IPF-Specific Market Basket
As discussed in section III.A.1, over the last several years we
have been exploring the possibility of creating a stand-alone, or IPF-
specific, market basket that reflects the cost structures of only IPF
providers. The major cost weights for the 2008-based RPL market basket
were calculated using Medicare cost report data for freestanding
facilities only. We used freestanding facilities due to concerns
regarding our ability to incorporate Medicare cost report data for
hospital-based providers. In the FY 2015 IPF PPS final rule (79 FR
45941), we presented several of these concerns (as stated below) but
explained that we would continue to research the possibility of
creating an IPF-specific market basket to update IPF PPS payments.
Since the FY 2015 IPF PPS final rule, we have performed additional
research on the Medicare cost report data available for hospital-based
IPFs and evaluated these concerns. We subsequently concluded from this
research that Medicare cost report data for both hospital-based IPFs
and freestanding IPFs can be used to calculate the major market basket
cost weights for a stand-alone IPF market basket. We have developed a
detailed methodology to derive market basket cost weights that are
representative of the universe of IPF providers. We believe the use of
this proposed IPF market basket is a technical improvement over the RPL
market basket that is currently used to update IPF PPS payments. As a
result, in this FY 2016 IPF PPS proposed rule, we are proposing a 2012-
based IPF market basket that reflects data for both freestanding and
hospital-based IPFs. Below we discuss our prior concerns and provide
reasons for why we now feel it is appropriate to create a stand-alone
IPF market basket using Medicare cost report data for both hospital-
based and freestanding IPFs.
One concern we discussed in the FY 2015 IPF PPS final rule (79 FR
45941) about using the hospital-based IPF Medicare cost report data was
the cost level differences for hospital-based IPFs relative to
freestanding IPFs were not readily explained by the specific
characteristics of the individual providers and the patients that they
serve (for example, characteristics related to case mix, urban/rural
status, teaching status, or presence of a qualified emergency
department). To address this concern, we used regression analysis to
evaluate the effect of including hospital-based IPF Medicare cost
report data in the calculation of cost distributions. A more detailed
description of these regression models can be found in the FY 2015 IPF
final rule (79 FR 45941). Based on this analysis, we concluded that the
inclusion of those IPF providers with unexplained variability in costs
did not significantly impact the cost weights and, therefore, should
not be a major cause of concern.
Another concern regarding the incorporation of hospital-based IPF
data into the calculation of the market basket cost weights was the
complexity of the Medicare cost report data for these providers. The
freestanding IPFs independently submit a Medicare cost report for their
facilities, making it relatively straightforward to obtain the cost
categories necessary to determine the major market basket cost weights.
However, Medicare cost report data submitted for a hospital-based IPF
are embedded in the Medicare cost report submitted for the entire
hospital facility in which the IPF is located. In order to use Medicare
cost report data from these providers, we needed to determine the
appropriate adjustments to apply to the data to ensure that the cost
weights we obtained would represent only the hospital-based IPF (not
the hospital as a whole). Over the past year, we worked to develop
detailed methodologies to calculate the major cost weights for both
freestanding and hospital-based IPFs. We believe that our proposed
methodologies and the resulting cost weights, described in section
III.A.3.a.i below, are reasonable and appropriate. We welcome public
comments on these proposals.
We also evaluated the differences in cost weights for hospital-
based and freestanding IPFs and found the most significant differences
occurred for salaries and pharmaceutical costs. Specifically, the
hospital-based IPF salary cost weights tend to be lower than those of
freestanding IPFs while hospital-based IPF pharmaceutical cost weights
tend to be higher than those of freestanding IPFs. Our proposed
methodology for deriving costs for each of these categories can be
found in section III.A.3.a.i below. We will continue to research and
monitor these
[[Page 25018]]
cost shares to ensure that the differences are explainable.
In summary, our research over the past year allowed us to evaluate
the appropriateness of including hospital-based IPF data in the
calculation of the major cost weights for an IPF market basket. We
believe that the proposed methodologies for deriving the cost weights
give us the ability to create a stand-alone IPF market basket that
reflects the cost structure of the universe of IPF providers.
Therefore, we believe that the use of this proposed 2012-based IPF
market basket to update IPF PPS payments is an improvement over the
current 2008-based RPL market basket.
a. Development of Cost Categories and Weights
i. Medicare Cost Reports
The proposed 2012-based IPF market basket consists of seven major
cost categories derived from the FY 2012 Medicare cost reports (CMS
Form 2552-10) for freestanding and hospital-based IPFs, including Wages
and Salaries, Employee Benefits, Contract Labor, Pharmaceuticals,
Professional Liability Insurance (PLI), Capital, and a residual. The
residual reflects all remaining costs that are not captured in the
other six cost categories. The FY 2012 cost reports include providers
whose cost report begin date is on or between October 1, 2011, and
September 30, 2012. We choose to use FY 2012 as the base year because
we believe that the Medicare cost reports for this year represent the
most recent, complete set of Medicare cost report data available for
IPFs at the time of rulemaking.
Prior Medicare cost report data used to develop the RPL market
basket showed large differences between some providers' Medicare length
of stay (LOS) and total facility LOS. Since our goal is to measure cost
weights that are reflective of case mix and practice patterns
associated with providing services to Medicare beneficiaries, we
limited our selection of Medicare cost reports used in the RPL market
basket to those facilities that had a Medicare LOS that was within a
comparable range of their total facility average LOS. For the 2008-
based RPL market basket, we used those IPF Medicare cost reports whose
average Medicare LOS was within 30 percent of the average facility LOS
if the facility LOS was greater than or equal to 15 days. For those
IPFs whose average facility LOS was less than 15 days, the Medicare LOS
had to be within 50 percent of the average facility LOS. When applying
the LOS trim to derive the 2008-based RPL market basket, we found that
those providers that were excluded (of which seventy percent were IPFs)
had an average facility LOS (40 days) that was 2 times larger than the
Medicare LOS (20 days).
To create the proposed 2012-based IPF market basket, we reevaluated
the LOS trim based on FY 2012 Medicare cost report data and the
inclusion of hospital-based providers. Based on our analysis of the
data, we are proposing to apply a less restrictive LOS trim to derive
the 2012-based IPF market basket than was applied to derive the RPL
market basket. For freestanding IPFs, we propose to define the Medicare
and facility LOS as those reported on line 14 of Worksheet S-3, Part I
(consistent with the RPL market basket method). For hospital-based
IPFs, we are proposing to use line 16 of Worksheet S-3, Part I to
determine the Medicare and facility LOS. To derive the proposed 2012-
based IPF market basket, for those IPFs with an average facility LOS of
greater than or equal to 15 days, we are proposing to include IPFs
where the Medicare LOS is within 50 percent (higher or lower) of the
average facility LOS. For those IPFs whose average facility LOS is less
than 15 days, we are proposing to include IPFs where the Medicare LOS
is within 95 percent (higher or lower) of the facility LOS.
This less restrictive trim increases the number of IPFs included in
the derivation of the market basket, particularly for those providers
where the Medicare LOS and facility LOS is within 5 days. Applying the
proposed trim results in IPF Medicare cost reports with an average
Medicare LOS of 12 days, average facility LOS of 10 days, and Medicare
utilization (as measured by Medicare inpatient IPF days as a percentage
of total facility days) of 30 percent. If we were to apply the same
trim as was applied for the 2008-based RPL market basket, it would
result in IPF Medicare cost reports with an average Medicare LOS of 12
days, average facility LOS of 9 days, and Medicare utilization of 31
percent. Those providers that were excluded from the proposed 2012-
based IPF market basket have an average Medicare LOS of 22 days,
average facility LOS of 49 days, and a Medicare utilization of 5
percent. Of those Medicare cost reports excluded from the proposed
2012-based IPF market basket, about 70 percent of these were
freestanding providers whereas freestanding providers represent about
30 percent of all IPFs. We believe the proposed trim is a technical
improvement as data from more IPFs is used while still being reflective
of case mix and practice patterns associated with providing services to
Medicare beneficiaries.
We applied this LOS trim to first obtain a set of cost reports for
facilities that have a Medicare LOS within a comparable range of their
total facility LOS. Using the resulting set of FY 2012 Medicare cost
reports for freestanding IPFs and hospital-based IPFs, we are proposing
to calculate costs for the six major cost categories (Wages and
Salaries, Employee Benefits, Contract Labor, Professional Liability
Insurance, Pharmaceuticals, and Capital).
Similar to the 2008-based RPL market basket major cost weights, the
proposed 2012-based IPF market basket cost weights reflect Medicare
allowable costs (routine, ancillary and capital costs) that are
eligible for inclusion under the IPF PPS payments. We define Medicare
allowable costs for freestanding facilities as cost centers (CMS Form
2552-10): 30 through 35, 50 through 76 (excluding 52 and 75), 90
through 91, and 93. We define Medicare allowable costs for hospital-
based facilities as cost centers (CMS Form 2552-10): 40, 50 through 76
(excluding 52 and 75), 90 through 91, and 93. For freestanding IPFs,
total Medicare allowable costs are equal to the total costs as reported
on Worksheet B, part I, column 26. For hospital-based IPFs, total
Medicare allowable costs are equal to total costs for the IPF inpatient
unit after the allocation of overhead costs (Worksheet B, part I,
column 26, line 40) and a portion of total ancillary costs. We
calculate the portion of ancillary costs attributable to the hospital-
based IPF for a given ancillary cost center by multiplying total
facility ancillary costs for the specific cost center (as reported on
Worksheet B, Part I, column 26) by the ratio of IPF Medicare ancillary
costs for the cost center (as reported on Worksheet D-3, column 3 for
IPF subproviders) to total Medicare ancillary costs for the cost center
(equal to the sum of Worksheet D-3, column 3 for all relevant PPS (that
is, IPPS, IRF, IPF and Skilled Nursing Facility (SNF))).
Below we provide a description of the proposed methodologies used
to derive costs for the six major cost categories.
Wages and Salaries Costs
For freestanding IPFs, Wages and Salaries costs are derived as the
sum of routine inpatient salaries, ancillary salaries, and a proportion
of overhead (or general service cost center) salaries as reported on
Worksheet A, column 1. Since overhead salary costs are attributable to
the entire IPF, we only include the proportion attributable to the
Medicare allowable cost centers. We
[[Page 25019]]
estimate the proportion of overhead salaries that are attributed to
Medicare allowable costs centers by multiplying the ratio of Medicare
allowable salaries to total salaries (Worksheet A, column 1, line 200)
times total overhead salaries. A similar methodology was used to derive
Wages and Salaries costs in the 2008-based RPL market basket.
For hospital-based IPFs, Wages and Salaries costs are derived as
the sum of inpatient unit wages and salaries (Worksheet A, column 1,
line 40) and a portion of salary costs attributable to total facility
ancillary and overhead cost centers as these cost centers are shared
with the entire facility. We calculate the portion of ancillary
salaries attributable to the hospital-based IPF for a given ancillary
cost center by multiplying total facility ancillary salary costs for
the specific cost center (as reported on Worksheet A, column 1) by the
ratio of IPF Medicare ancillary costs for the cost center (as reported
on Worksheet D-3, column 3 for IPF subproviders) to total Medicare
ancillary costs for the cost center (equal to the sum of Worksheet D-3,
column 3 for all relevant PPS units (that is, IPPS, IRF, IPF and SNF)).
For example, if hospital-based IPF Medicare laboratory costs represent
10 percent of the total Medicare laboratory costs for the entire
facility, then 10 percent of total facility laboratory salaries (as
reported in Worksheet A, column 1, line 60) would be attributable to
the hospital-based IPF. We believe it is appropriate to use only a
portion of the ancillary costs in the market basket cost weight
calculations since the hospital-based IPF only utilizes a portion of
the facility's ancillary services. We believe the ratio of reported IPF
Medicare costs to reported total Medicare costs provides a reasonable
estimate of the ancillary services utilized, and costs incurred, by the
hospital-based IPF.
We calculate the portion of overhead salary costs attributable to
hospital-based IPFs by multiplying the total overhead costs
attributable to the hospital-based IPF (sum of columns 4 through18 on
Worksheet B, part I, line 40) by the ratio of total facility overhead
salaries (as reported on Worksheet A, column 1, lines 4 through18) to
total facility overhead costs (as reported on Worksheet A, column 7,
lines 4 through18). This methodology assumes the proportion of total
costs related to salaries for the overhead cost centers is similar for
all inpatient units (that is, acute inpatient or inpatient
psychiatric). Since the 2008-based RPL market basket did not include
hospital-based providers, this proposed methodology cannot be compared
to the derivation of Wages and Salaries costs in the 2008-based RPL
market basket.
Employee Benefits Costs
Effective with our implementation of CMS Form 2552-10, CMS began
collecting Employee Benefits and Contract Labor data on Worksheet S-3,
Part V. Previously, with CMS Form 2540-96, Employee Benefits and
Contract Labor data were reported on Worksheet S-3, part II, which was
applicable to only IPPS providers and, therefore, these data were not
available for the derivation of the RPL market basket. Due to the lack
of such data, the Employee Benefits cost weight for the 2008-based RPL
market basket was derived by multiplying the 2008-based RPL market
basket Wages and Salaries cost weight by the ratio of the IPPS hospital
market basket Employee Benefits cost weight to the IPPS hospital market
basket Wages and Salaries cost weight. Similarly, the Contract Labor
cost weight for the 2008-based RPL market basket was derived by
multiplying the 2008-based RPL market basket Wages and Salaries cost
weight by the ratio of the IPPS hospital market basket Contract Labor
cost weight to the IPPS hospital market basket Wages and Salaries cost
weight.
For FY 2012 Medicare cost report data, while there were providers
that did report data on Worksheet S-3, part V, many providers did not
complete this worksheet. However, we believe we had a large enough
sample to enable us to produce reasonable Employee Benefits cost
weights. We continue to encourage all providers to report these data on
the Medicare cost report.
For freestanding IPFs, Employee Benefits costs are equal to the
data reported on Worksheet S-3, Part V, line 2, column 2.
For hospital-based IPFs, we calculate total benefits as the sum of
benefit costs reported on Worksheet S-3 Part V, line 3, column 2, and a
portion of ancillary benefits and overhead benefits for the total
facility. Ancillary benefits attributable to the hospital-based IPF are
calculated by multiplying ancillary salaries for the hospital-based IPF
as determined in the derivation of Wages and Salaries for the hospital-
based IPF by the ratio of total facility benefits to total facility
salaries. Similarly, overhead benefits attributable to the hospital-
based IPF are calculated by multiplying overhead salaries for the
hospital-based IPF as determined in the derivation of Wages and
Salaries for the hospital-based IPF by the ratio of total facility
benefits to total facility salaries.
Contract Labor Costs
Similar to the RPL and IPPS market baskets, Contract Labor costs
are primarily associated with direct patient care services. Contract
labor costs for other services such as accounting, billing, and legal
are calculated separately using other government data sources as
described in section III.A.3.a.ii. As discussed above in the Employee
Benefits section, we now have data reported on Worksheet S-3, Part V
that we can use to derive the Contract Labor cost weight for the 2012-
based IPF market basket. For freestanding IPFs, Contract Labor costs
are based on data reported on Worksheet S-3, part V, column 1, line 2
and for hospital-based IPFs Contract Labor costs are based on line 3 of
this same worksheet. As previously noted, for FY 2012 Medicare cost
report data, while there were providers that did report data on
Worksheet S-3, part V, many providers did not complete this worksheet.
However, we believe we had a large enough sample to enable us to
produce a reasonable Contract Labor cost weight. We continue to
encourage all providers to report these data on the Medicare cost
report.
Pharmaceuticals Costs
For freestanding IPFs, pharmaceuticals costs are based on non-
salary costs reported on Worksheet A, column 7 less Worksheet A, column
1 for the pharmacy cost center (line 15) and drugs charged to patients
cost center (line 73).
For hospital-based IPFs, pharmaceuticals costs are based on a
portion of the non-salary pharmacy costs and a portion of the non-
salary drugs charged to patient costs reported for the total facility.
Non-salary pharmacy costs attributable to the hospital-based IPF are
calculated by multiplying total pharmacy costs attributable to the
hospital-based IPF (as reported on Worksheet B, column 15, line 40) by
the ratio of total non-salary pharmacy costs (Worksheet A, column 2,
line 15) to total pharmacy costs (sum of Worksheet A, column 1 and 2
for line 15) for the total facility. Non-salary drugs charged to
patient costs attributable to the hospital-based IPF are calculated by
multiplying total non-salary drugs charged to patient costs (Worksheet
B, part I, column 0, line 73 plus Worksheet B, part I, column 15, line
73 less Worksheet A, column 1, line 73) for the total facility by the
ratio of Medicare drugs charged to patient ancillary costs for the IPF
unit (as reported on Worksheet D-3 for IPF subproviders, line 73,
column 3) to total
[[Page 25020]]
Medicare drugs charged to patients ancillary costs for the total
facility (equal to the sum of Worksheet D-3, line 73, column 3, for all
relevant PPS (i.e. IPPS, IRF, IPF and SNF)).
Professional Liability Insurance (PLI) Costs
For freestanding IPFs, PLI costs (often referred to as malpractice
costs) are equal to premiums, paid losses and self-insurance costs
reported on Worksheet S-2, line 118, columns 1 through 3.
For hospital-based IPFs, we assume that the PLI weight for the
total facility is similar to the hospital-based IPF unit since the only
data reported on this worksheet is for the entire facility. Therefore,
hospital-based IPF PLI costs are equal to total facility PLI (as
reported on Worksheet S-2, line 118, columns 1 through 3) divided by
total facility costs (as reported on Worksheet A, line 200) times
hospital-based IPF Medicare allowable total costs.
Capital Costs
For freestanding IPFs, capital costs are equal to Medicare
allowable capital costs as reported on Worksheet B, Part II, column 26.
For hospital-based IPFs, capital costs are equal to IPF inpatient
capital costs (as reported on Worksheet B, part II, column 26, line 40)
and a portion of IPF ancillary capital costs. We calculate the portion
of ancillary capital costs attributable to the hospital-based IPF for a
given cost center by multiplying total facility ancillary capital costs
for the specific ancillary cost center (as reported on Worksheet B,
Part II, column 26) by the ratio of IPF Medicare ancillary costs for
the cost center (as reported on Worksheet D-3, column 3 for IPF
subproviders) to total Medicare ancillary costs for the cost center
(equal to the sum of Worksheet D-3, column 3 for all relevant PPS (that
is, IPPS, IRF, IPF and SNF)).
i. Final Major Cost Category Computation
After we derive costs for the six major cost categories for each
provider using the Medicare cost report data as described above, we
trim the data for outliers based on the following steps. First, we
divide the costs for each of the six categories by total Medicare
allowable costs calculated for the provider to obtain cost weights for
the universe of IPF providers. Next, we apply a mutually exclusive top
and bottom 5 percent trim for each cost weight to remove outliers.
After the outliers have been removed, we sum the costs for each
category across all remaining providers. We then divide this by the sum
of total Medicare allowable costs across all remaining providers to
obtain a cost weight for the proposed 2012-based IPF market basket for
the given category. Finally, we calculate the residual ``All Other''
cost weight that reflects all remaining costs that are not captured in
the six cost categories listed above. See Table 1 below for the
resulting cost weights for these major cost categories that we obtain
from the Medicare cost reports.
Table 1--Major Cost Categories as Derived From Medicare Cost Reports
------------------------------------------------------------------------
2012-Based IPF 2008-Based RPL
Major cost categories (percent) (percent)
------------------------------------------------------------------------
Wages and Salaries...................... 50.8 47.4
Employee Benefits \1\................... 13.0 12.3
Contract Labor \1\...................... 1.4 2.6
Professional Liability Insurance 1.1 0.8
(Malpractice)..........................
Pharmaceuticals......................... 4.8 6.5
Capital................................. 7.0 8.4
All Other............................... 22.0 22.0
------------------------------------------------------------------------
* Total may not sum to 100 due to rounding.
\1\ Due to the lack of Medicare cost report data, the Employee Benefits
and Contract Labor cost weights in the 2008-based RPL market basket
were based on the IPPS market basket.
The Wages and Salaries cost weight obtained directly from the
Medicare cost reports for the proposed 2012-based IPF market basket is
approximately 3 percentage points higher than the Wages and Salaries
cost weight for the 2008-based RPL market basket. This is the result of
freestanding IPFs having a larger percentage of costs attributable to
labor than freestanding Inpatient Rehabilitation Facilities (IRF) and
Long-term care hospitals. These latter facilities were included in the
2008-based RPL market basket.
As we did for the 2008-based RPL market basket, we propose to
allocate the Contract Labor cost weight to the Wages and Salaries and
Employee Benefits cost weights based on their relative proportions
under the assumption that contract labor costs are comprised of both
wages and salaries and employee benefits. The Contract Labor allocation
proportion for Wages and Salaries is equal to the Wages and Salaries
cost weight as a percent of the sum of the Wages and Salaries cost
weight and the Employee Benefits cost weight. This rounded percentage
is 80 percent; therefore, we propose to allocate 80 percent of the
Contract Labor cost weight to the Wages and Salaries cost weight and 20
percent to the Employee Benefits cost weight. Table 2 shows the Wages
and Salaries and Employee Benefit cost weights after Contract Labor
cost weight allocation for both the proposed 2012-based IPF market
basket and 2008-based RPL market basket.
Table 2--Wages and Salaries and Employee Benefits Cost Weights After
Contract Labor Allocation
------------------------------------------------------------------------
Major cost categories 2012-Based IPF 2008-Based RPL
------------------------------------------------------------------------
Wages and Salaries...................... 51.9 49.4
Employee Benefits....................... 13.3 12.8
------------------------------------------------------------------------
[[Page 25021]]
i. Derivation of the Detailed Operating Cost Weights
To further divide the ``All Other'' residual cost weight estimated
from the FY 2012 Medicare Cost Report data into more detailed cost
categories, we propose to use the 2007 Benchmark Input-Output (I-O)
``Use Tables/Before Redefinitions/Purchaser Value'' for North American
Industry Classification System (NAICS) 622000 Hospitals, published by
the Bureau of Economic Analysis (BEA). These data are publicly
available at the following Web site: https://www.bea.gov/industry/io_annual.htm.
The BEA Benchmark I-O data are scheduled for publication every five
years with the most recent data available for 2007. The 2007 Benchmark
I-O data are derived from the 2007 Economic Census and are the building
blocks for BEA's economic accounts. Thus, they represent the most
comprehensive and complete set of data on the economic processes or
mechanisms by which output is produced and distributed.\1\ BEA also
produces Annual I-O estimates; however, while based on a similar
methodology, these estimates reflect less comprehensive and less
detailed data sources and are subject to revision when benchmark data
becomes available. Instead of using the less detailed Annual I-O data,
we inflate the 2007 Benchmark I-O data forward to 2012 by applying the
annual price changes from the respective price proxies to the
appropriate market basket cost categories that are obtained from the
2007 Benchmark I-O data. We repeat this practice for each year. We then
calculate the cost shares that each cost category represents of the
inflated 2012 data. These resulting 2012 cost shares are applied to the
All Other residual cost weight to obtain the detailed cost weights for
the proposed 2012-based IPF market basket. For example, the cost for
Food: Direct Purchases represents 6.5 percent of the sum of the ``All
Other'' 2007 Benchmark I-O Hospital Expenditures inflated to 2012;
therefore, the Food: Direct Purchases cost weight represents 6.5
percent of the 2012-based IPF market basket's ``All Other'' cost
category (22.0 percent), yielding a ``final'' Food: Direct Purchases
cost weight of 1.4 percent in the proposed 2012-based IPF market basket
(0.065 * 22.0 percent = 1.4 percent).
---------------------------------------------------------------------------
\1\ https://www.bea.gov/papers/pdf/IOmanual_092906.pdf.
---------------------------------------------------------------------------
Using this methodology, we derive eighteen detailed IPF market
basket cost category weights from the proposed 2012-based IPF market
basket residual cost weight (22.0 percent). These categories are: (1)
Electricity, (2) Fuel, Oil, and Gasoline (3) Water & Sewerage (4) Food:
Direct Purchases, (5) Food: Contract Services, (6) Chemicals, (7)
Medical Instruments, (8) Rubber & Plastics, (9) Paper and Printing
Products, (10) Miscellaneous Products, (11) Professional Fees: Labor-
related, (12) Administrative and Facilities Support Services, (13)
Installation, Maintenance, and Repair, (14) All Other Labor-related
Services, (15) Professional Fees: Nonlabor-related, (16) Financial
Services, (17) Telephone Services, and (18) All Other Nonlabor-related
Services.
iii. Derivation of the Detailed Capital Cost Weights
As described in section III.A.3.a.i of this preamble, we are
proposing a Capital-Related cost weight of 7.0 percent as obtained from
the FY 2012 Medicare cost reports for freestanding and hospital-based
IPF providers. We are proposing to then separate this total Capital-
Related cost weight into more detailed cost categories.
Using FY 2012 Medicare cost reports, we are able to group Capital-
Related costs into the following categories: Depreciation, Interest,
Lease, and Other Capital-Related costs. For each of these categories,
we are proposing to determine separately for hospital-based IPFs and
freestanding IPFs what proportion of total capital-related costs the
category represent.
For freestanding IPFs, we are proposing to derive the proportions
for Depreciation, Interest, Lease, and Other Capital-related costs
using the data reported by the IPF on Worksheet A-7, which is similar
to the methodology used for the 2008-based RPL market basket.
For hospital-based IPFs, data for these four categories are not
reported separately for the subprovider; therefore, we are proposing to
derive these proportions using data reported on Worksheet A-7 for the
total facility. We are assuming the cost shares for the overall
hospital are representative for the hospital-based subprovider IPF
unit. For example, if depreciation costs make up 60 percent of total
capital costs for the entire facility, we believe it is reasonable to
assume that the hospital-based IPF would also have a 60 percent
proportion because it is a subprovider unit contained within the total
facility.
In order to combine each detailed capital cost weight for
freestanding and hospital-based IPFs into a single capital cost weight
for the proposed 2012-based IPF market basket, we are proposing to
weight together the shares for each of the categories (Depreciation,
Interest, Lease, and Other Capital-related costs) based on the share of
total capital costs each provider type represents of the total capital
costs for all IPFs for 2012. Applying this methodology results in
proportions of total capital-related costs for Depreciation, Interest,
Lease and Other Capital-related costs that are representative of the
universe of IPF providers.
We next are proposing to allocate lease costs across each of the
remaining detailed capital-related cost categories as was done in the
2008-based RPL market basket. This would result in 3 primary capital-
related cost categories in the proposed 2012-based IPF market basket:
Depreciation, Interest, and Other Capital-Related costs. Lease costs
are unique in that they are not broken out as a separate cost category
in the proposed 2012-based IPF market basket, but rather we are
proposing to proportionally distribute these costs among the cost
categories of Depreciation, Interest, and Other Capital-Related,
reflecting the assumption that the underlying cost structure of leases
is similar to that of capital-related costs in general. As was done
under the 2008-based RPL market basket, we are proposing to assume that
10 percent of the lease costs as a proportion of total capital-related
costs represents overhead and assign those costs to the Other Capital-
Related cost category accordingly. We propose to distribute the
remaining lease costs proportionally across the 3 cost categories
(Depreciation, Interest, and Other Capital-Related) based on the
proportion that these categories comprise of the sum of the
Depreciation, Interest, and Other Capital-related cost categories
(excluding lease expenses). This is the same methodology used for the
2008-based RPL market basket. The allocation of these lease expenses
are shown in Table 3 below.
Finally, we are proposing to further divide the Depreciation and
Interest cost categories. We are proposing to separate Depreciation
into the following 2 categories: (1) Building and Fixed Equipment; and
(2) Movable Equipment; and proposing to separate Interest into the
following 2 categories: (1) Government/Nonprofit; and (2) For-profit.
To disaggregate the Depreciation cost weight, we need to determine
the percent of total Depreciation costs for IPFs that is attributable
to Building and Fixed Equipment, which we hereafter refer to as the
``fixed percentage.'' For the proposed 2012-based IPF market basket, we
are proposing to use slightly different methods to obtain the fixed
[[Page 25022]]
percentages for hospital-based IPFs compared to freestanding IPFs.
For freestanding IPFs, we are proposing to use depreciation data
from Worksheet A-7 of the FY 2012 Medicare cost reports, similar to the
methodology used for the 2008-based RPL market basket. However, for
hospital-based IPFs, we determined that the fixed percentage for the
entire facility may not be representative of the IPF subprovider unit
due to the entire facility likely employing more sophisticated movable
assets that are not utilized by the hospital-based IPF. Therefore, for
hospital-based IPFs, we are proposing to calculate a fixed percentage
using: (1) Building and fixture capital costs allocated to the
subprovider unit as reported on Worksheet B, part I line 40; and (2)
building and fixture capital costs for the top five ancillary cost
centers utilized by hospital-based IPFs. We propose to weight these 2
fixed percentages (inpatient and ancillary) using the proportion that
each capital cost type represents of total capital costs in the
proposed 2012-based IPF market basket. We are proposing to then weight
the fixed percentages for hospital-based and freestanding IPFs together
using the proportion of total capital costs each provider type
represents.
To disaggregate the Interest cost weight, we need to determine the
percent of total interest costs for IPFs that are attributable to
government and nonprofit facilities, which we hereafter refer to as the
``nonprofit percentage.'' For the IPF market basket, we are proposing
to use interest costs data from Worksheet A-7 of the FY 2012 Medicare
cost reports for both freestanding and hospital-based IPFs, similar to
the methodology used for the 2008-based RPL market basket. We are
proposing to determine the percent of total interest costs that are
attributed to government and nonprofit IPFs separately for hospital-
based and freestanding IPFs. We then are proposing to weight the
nonprofit percentages for hospital-based and freestanding IPFs together
using the proportion of total capital costs each provider type
represents.
Table 3 below provides the detailed capital cost shares obtained
from the Medicare cost reports. Ultimately, these detailed capital cost
shares are applied to the total Capital-Related cost weight determined
in section III.A.3.a.i to split out the total weight of 7.0 percent
into more detailed cost categories and weights.
Table 3--Detailed Capital Cost Weights for the Proposed 2012-Based IPF
Market Basket
------------------------------------------------------------------------
Proposed
Cost shares detailed
obtained from capital cost
medicare cost shares after
reports allocation of
percent lease expenses
percent
------------------------------------------------------------------------
Depreciation............................ 64 75
Building and Fixed Equipment............ 46 53
Movable Equipment....................... 19 22
Interest................................ 15 17
Government/Nonprofit.................... 12 14
For Profit.............................. 2 3
Lease................................... 15 n/a
Other................................... 6 8
------------------------------------------------------------------------
v. Proposed 2012-Based IPF Market Basket Cost Categories and Weights
Table 4 below shows the cost categories and weights for the
proposed 2012-based IPF market basket compared to the 2008-based RPL
market basket.
Table 4--Proposed 2012-Based IPF Cost Weights Compared to 2008-Based RPL
Cost Weights
------------------------------------------------------------------------
Proposed 2012-
Cost category Based IPF cost 2008-Based RPL
weight cost weight
------------------------------------------------------------------------
Total................................... 100.0 100.0
Compensation........................ 65.2 62.3
Wages and Salaries.......... 51.9 49.4
Employee Benefits........... 13.3 12.8
Utilities........................... 1.8 1.6
Electricity................. 0.8 1.1
Fuel, Oil, and Gasoline..... 0.9 0.4
Water & Sewerage............ 0.1 0.1
Professional Liability Insurance.... 1.1 0.8
Malpractice................. 1.1 0.8
All Other Products and Services..... 25.0 27.0
All Other Products.............. 11.7 15.6
Pharmaceuticals............. 4.8 6.5
Food: Direct Purchases...... 1.4 3.0
Food: Contract Services..... 0.9 0.4
Chemicals................... 0.6 1.1
Medical Instruments......... 1.9 1.8
Rubber & Plastics........... 0.5 1.1
[[Page 25023]]
Paper and Printing Products. 1.0 1.0
Apparel..................... .............. 0.2
Machinery and Equipment..... .............. 0.1
Miscellaneous Products...... 0.7 0.3
All Other Services.................. 13.3 11.4
Labor-Related Services.......... 6.7 4.7
Professional Fees: Labor- 2.9 2.1
related....................
Administrative and 0.7 0.4
Facilities Support Services
Installation, Maintenance, 1.6 ..............
and Repair.................
All Other: Labor-related 1.5 2.1
Services...................
Nonlabor-Related Services....... 6.6 6.7
Professional Fees: Nonlabor- 2.6 4.2
related....................
Financial services.......... 2.3 0.9
Telephone Services.......... 0.6 0.4
Postage..................... .............. 0.6
All Other: Nonlabor-related 1.1 0.6
Services...................
Capital-Related Costs............... 7.0 8.4
Depreciation.................... 5.2 5.5
Fixed Assets................ 3.7 3.3
Movable Equipment........... 1.5 2.2
Interest Costs.................. 1.2 2.0
Government/Nonprofit........ 1.0 0.7
For Profit.................. 0.2 1.3
Other Capital-Related Costs..... 0.6 0.9
Other Capital-Related Costs. 0.6 0.9
------------------------------------------------------------------------
The proposed 2012-based IPF market basket does not include separate
cost categories for Apparel, Machinery & Equipment, and Postage. Due to
the small weights associated with these detailed categories and
relatively stable price growth in the applicable price proxy, we are
proposing to include Apparel and Machinery & Equipment in the
Miscellaneous Products cost category and Postage in the All-Other
Nonlabor-related Services. We note that these Machinery & Equipment
expenses are for equipment that is paid for in a given year and not
depreciated over the assets' useful life. Depreciation expenses for
movable equipment are reflected in the Capital-related costs of the
proposed 2012-based IPF market basket. For the proposed 2012-based IPF
market basket, we are also proposing to include a separate cost
category for Installation, Maintenance, and Repair.
b. Selection of Price Proxies
After developing the cost weights for the proposed 2012-based IPF
market basket, we selected the most appropriate wage and price proxies
currently available to represent the rate of price change for each
expenditure category. For the majority of the cost weights, we base the
price proxies on Bureau of Labor Statistics (BLS) data and group them
into one of the following BLS categories:
Employment Cost Indexes. Employment Cost Indexes (ECIs)
measure the rate of change in employment wage rates and employer costs
for employee benefits per hour worked. These indexes are fixed-weight
indexes and strictly measure the change in wage rates and employee
benefits per hour. ECIs are superior to Average Hourly Earnings (AHE)
as price proxies for input price indexes because they are not affected
by shifts in occupation or industry mix, and because they measure pure
price change and are available by both occupational group and by
industry. The industry ECIs are based on the North American
Classification System (NAICS) and the occupational ECIs are based on
the Standard Occupational Classification System (SOC).
Producer Price Indexes. Producer Price Indexes (PPIs)
measure price changes for goods sold in other than retail markets. PPIs
are used when the purchases of goods or services are made at the
wholesale level.
Consumer Price Indexes. Consumer Price Indexes (CPIs)
measure change in the prices of final goods and services bought by
consumers. CPIs are only used when the purchases are similar to those
of retail consumers rather than purchases at the wholesale level, or if
no appropriate PPIs are available.
We evaluated the price proxies using the criteria of reliability,
timeliness, availability, and relevance:
Reliability. Reliability indicates that the index is based
on valid statistical methods and has low sampling variability. Widely
accepted statistical methods ensure that the data were collected and
aggregated in a way that can be replicated. Low sampling variability is
desirable because it indicates that the sample reflects the typical
members of the population. (Sampling variability is variation that
occurs by chance because only a sample was surveyed rather than the
entire population.)
Timeliness. Timeliness implies that the proxy is published
regularly, preferably at least once a quarter. The market baskets are
updated quarterly and, therefore, it is important for the underlying
price proxies to be up-to-date, reflecting the most recent data
available. We believe that using proxies that are published regularly
(at least quarterly, whenever possible) helps to ensure that we are
using the most recent data available to update the market basket. We
strive to use publications that are disseminated frequently, because we
believe that this is an optimal way to stay abreast of the most current
data available.
Availability. Availability means that the proxy is
publicly available. We prefer that our proxies are publicly
[[Page 25024]]
available because this will help ensure that our market basket updates
are as transparent to the public as possible. In addition, this enables
the public to be able to obtain the price proxy data on a regular
basis.
Relevance. Relevance means that the proxy is applicable
and representative of the cost category weight to which it is applied.
The CPIs, PPIs, and ECIs that we have selected to propose in this
regulation meet these criteria. Therefore, we believe that they
continue to be the best measure of price changes for the cost
categories to which they would be applied.
Table 6 lists all price proxies for the proposed 2012-based IPF
market basket. Below is a detailed explanation of the price proxies we
are proposing for each cost category weight.
i. Price Proxies for the Operating Portion of the Proposed 2012-Based
IPF Market Basket
Wages and Salaries
To measure wage price growth in the proposed 2012-based IPF market
basket, we are proposing to apply a proxy blend based on six
occupational subcategories within the Wages and Salaries category,
which would reflect the IPF occupational mix. There is not a published
wage proxy for IPF workers. The 2008-based RPL market basket uses the
ECI for Wages and Salaries for All Civilian workers in Hospitals (BLS
series code #CIU1026220000000I) to proxy these expenses.
We propose to use the National Industry-Specific Occupational
Employment and Wage estimates for North American Industrial
Classification System (NAICS) 622200, Psychiatric & Substance Abuse
Hospitals, published by the BLS Office of Occupational Employment
Statistics (OES), as the data source for the wage cost shares in the
wage proxy blend. We propose to use OES' May 2012 data. Detailed
information on the methodology for the national industry-specific
occupational employment and wage estimates survey can be found at
https://www.bls.gov/oes/current/oes_tec.htm.
Based on the OES data, there are six wage subcategories:
Management; NonHealth Professional and Technical; Health Professional
and Technical; Health Service; NonHealth Service; and Clerical. Table 5
lists the proposed 2012 occupational assignments for the six wage
subcategories.
Table 5--Proposed 2012 Occupational Assignments for IPF Wage Blend
2012 Proposed Occupational Groupings
------------------------------------------------------------------------
------------------------------------------------------------------------
Group 1 Management
------------------------------------------------------------------------
11-0000................................ Management Occupations.
------------------------------------------------------------------------
Group 2 NonHealth Professional &
Technical
------------------------------------------------------------------------
13-0000................................ Business and Financial
Operations Occupations.
15-0000................................ Computer and Mathematical
Science Occupations.
17-0000................................ Architecture and Engineering
Occupations.
19-0000................................ Life, Physical, and Social
Science Occupations.
23-0000................................ Legal Occupations.
25-0000................................ Education, Training, and
Library Occupations.
27-0000................................ Arts, Design, Entertainment,
Sports, and Media Occupations.
------------------------------------------------------------------------
Group 3 Health Professional & Technical
------------------------------------------------------------------------
29-1021................................ Dentists, General.
29-1031................................ Dietitians and Nutritionists.
29-1051................................ Pharmacists.
29-1062................................ Family and General
Practitioners.
29-1063................................ Internists, General.
29-1069................................ Physicians and Surgeons, All
Other.
29-1071................................ Physician Assistants.
29-1111................................ Registered Nurses.
29-1122................................ Occupational Therapists.
29-1123................................ Physical Therapists.
29-1125................................ Recreational Therapists.
29-1126................................ Respiratory Therapists.
29-1127................................ Speech-Language Pathologists.
29-1129................................ Therapists, All Other.
29-1199................................ Health Diagnosing and Treating
Practitioners, All Other.
------------------------------------------------------------------------
Group 4 Health Service
------------------------------------------------------------------------
21-0000................................ Community and Social Services
Occupations.
29-2011................................ Medical and Clinical Laboratory
Technologists.
29-2012................................ Medical and Clinical Laboratory
Technicians.
29-2021................................ Dental Hygienists.
29-2032................................ Diagnostic Medical
Sonographers.
29-2034................................ Radiologic Technologists and
Technicians.
29-2041................................ Emergency Medical Technicians
and Paramedics.
29-2051................................ Dietetic Technicians.
29-2052................................ Pharmacy Technicians.
29-2054................................ Respiratory Therapy
Technicians.
29-2061................................ Licensed Practical and Licensed
Vocational Nurses.
29-2071................................ Medical Records and Health
Information Technicians.
29-2099................................ Health Technologists and
Technicians, All Other.
29-9012................................ Occupational Health and Safety
Technicians.
[[Page 25025]]
29-9099................................ Healthcare Practitioner and
Technical Workers, All Other.
31-0000................................ Healthcare Support Occupations.
------------------------------------------------------------------------
Group 5 NonHealth Service
------------------------------------------------------------------------
33-0000................................ Protective Service Occupations.
35-0000................................ Food Preparation and Serving
Related Occupations.
37-0000................................ Building and Grounds Cleaning
and Maintenance Occupations.
39-0000................................ Personal Care and Service
Occupations.
41-0000................................ Sales and Related Occupations.
47-0000................................ Construction and Extraction
Occupations.
49-0000................................ Installation, Maintenance, and
Repair Occupations.
51-0000................................ Production Occupations.
53-0000................................ Transportation and Material
Moving Occupations.
------------------------------------------------------------------------
Group 6 Clerical
------------------------------------------------------------------------
43-0000................................ Office and Administrative
Support Occupations.
------------------------------------------------------------------------
Total expenditures by occupation (i.e., occupational assignment)
were calculated by taking the OES number of employees multiplied by the
OES annual average salary. These expenditures were aggregated based on
the six groups in Table 6. We next calculated the proportion of each
group's expenditures relative to the total expenditures of all six
groups. These proportions, listed in Table 5, represent the weights
used in the wage proxy blend. We propose using the published wage
proxies in Table 6 for each of the six groups (that is, wage
subcategories) as we believe these six price proxies are the most
technically appropriate indices available to measure the price growth
of the Wages and Salaries cost category in the proposed 2012-based IPF
market basket.
Table 6--Proposed 2012-Based IPF Market Basket Wage Proxy Blend
----------------------------------------------------------------------------------------------------------------
Wage blend
Wage subcategory weight Price proxy BLS Series ID
----------------------------------------------------------------------------------------------------------------
Health Service..................... 36.2 ECI for Wages and Salaries CIU1026200000000I
for All Civilian workers
in Healthcare and Social
Assistance.
Health Professional and Technical.. 33.5 ECI for Wages and Salaries CIU1026220000000I
for All Civilian workers
in Hospitals.
NonHealth Service.................. 9.2 ECI for Wages and Salaries CIU2020000300000I
for Private Industry
workers in Service
Occupations.
NonHealth Professional and 7.3 ECI for Wages and Salaries CIU2025400000000I
Technical. for Private Industry
workers in Professional,
Scientific, and Technical
Services.
Management......................... 7.1 ECI for Wages and Salaries CIU2020000110000I
for Private Industry
workers in Management,
Business, and Financial.
Clerical........................... 6.7 ECI for Wages and Salaries CIU2020000220000I
for Private Industry
workers in Office and
Administrative Support.
----------------
----------------------------------------------------------------------------------------------------------------
A comparison of the yearly changes from FY 2012 to FY 2015 for the
proposed 2012-based IPF wage blend and the 2008-based RPL wage proxy is
shown in Table 7. The average annual increase in the 2 price proxies is
similar, and in no year is the difference greater than 0.2 percentage
point.
Table 7--Fiscal Year Growth in the Proposed 2012-Based IPF Wage Proxy Blend and 2008-Based RPL Wage Proxy
----------------------------------------------------------------------------------------------------------------
Average 2012-
2012 2013 2014 2015 2015
----------------------------------------------------------------------------------------------------------------
2012-based IPF Proposed Wage 1.6 1.6 1.6 2.2 1.8
Proxy Blend....................
2008-based RPL Wage Proxy....... 1.5 1.5 1.5 2.0 1.6
----------------------------------------------------------------------------------------------------------------
** Source: IHS Global Insight, Inc., 1st Quarter 2015 forecast with historical data through 4th Quarter 2014.
Benefits
For measuring benefits price growth in the proposed 2012-based IPF
market basket, we are proposing to apply a benefits proxy blend based
on the same six subcategories and the same six blend weights proposed
for the wage proxy blend. These subcategories and blend weights are
listed in Table 8.
Applicable benefit ECIs, that are identical in industry definition
to the wage blend ECIs, were selected for each of the six
subcategories. These proposed benefit ECIs, listed in Table 8, are not
publically available. Therefore, we calculated ``ECIs for Total
Benefits'' using publically available ``ECIs for
[[Page 25026]]
Total Compensation'' for each subcategory and the relative importance
of wages within that subcategory's total compensation. This is the same
benefits ECI methodology we implemented in our IPPS, SNF, HHA, RPL,
LTCH, and ESRD market baskets. We believe the six price proxies listed
in Table 8 are the most technically appropriate indices to measure the
price growth of the Benefits cost category in the proposed 2012-based
IPF market basket.
The current 2008-based RPL market basket uses the ECI for Benefits
for All Civilian Workers in Hospitals to proxy Benefit expenses.
Table 8--Proposed 2012-Based IPF Market Basket Benefits Proxy Blend
------------------------------------------------------------------------
Wage blend
Wage subcategory weight Price proxy
------------------------------------------------------------------------
Health Service................. 36.2 ECI for Total Benefits
for All Civilian
workers in Healthcare
and Social Assistance.
Health Professional and 33.5 ECI for Total Benefits
Technical. for All Civilian
workers in Hospitals.
NonHealth Service.............. 9.2 ECI for Total Benefits
for Private Industry
workers in Service
Occupations.
NonHealth Professional and 7.3 ECI for Total Benefits
Technical. for Private Industry
workers in
Professional,
Scientific, and
Technical Services.
Management..................... 7.1 ECI for Total Benefits
for Private Industry
workers in Management,
Business, and
Financial.
Clerical....................... 6.7 ECI for Total Benefits
for Private Industry
workers in Office and
Administrative
Support.
----------------
Total...................... 100.0
------------------------------------------------------------------------
A comparison of the yearly changes from FY 2012 to FY 2015 for the
proposed 2012-based IPF benefit proxy blend and the 2008-based RPL
benefit proxy is shown in Table 9. The average annual increase in the 2
price proxies is similar, and in no year is the difference greater than
0.4 percentage point.
Table 9--Fiscal Year Growth in the Proposed 2012-Based IPF Benefit Proxy Blend and 2008-Based RPL Benefit Proxy
----------------------------------------------------------------------------------------------------------------
Average 2012-
2012 2013 2014 2015 2015
----------------------------------------------------------------------------------------------------------------
2012-based IPF Proposed Benefit 2.5 1.9 2.0 2.2 2.2
Proxy Blend....................
2008-based RPL Benefit Proxy.... 2.1 1.8 2.1 2.1 2.0
----------------------------------------------------------------------------------------------------------------
Source: IHS Global Insight, Inc., 1st Quarter 2015 forecast with historical data through 4th Quarter 2014.
Electricity
We are proposing to continue to use the PPI for Commercial Electric
Power (BLS series code #WPU0542) to measure the price growth of this
cost category. This is the same price proxy used in the 2008-based RPL
market basket.
Fuel, Oil, and Gasoline
We are proposing to change the proxy used for the Fuel, Oil, and
Gasoline cost category. The 2008-based RPL market basket uses the PPI
for Petroleum Refineries (BLS series code #PCU32411-32411) to proxy
these expenses.
For the proposed 2012-based IPF market basket, we are proposing to
use a blend of the PPI for Petroleum Refineries and the PPI Commodity
for Natural Gas (BLS series code #WPU0531). Our analysis of the Bureau
of Economic Analysis' 2007 Benchmark Input-Output data (use table
before redefinitions, purchaser's value for NAICS 622000 [Hospitals]),
shows that Petroleum Refineries expenses accounts for approximately 70
percent and Natural Gas accounts for approximately 30 percent of the
Fuel, Oil, and Gasoline expenses. Therefore, we propose a blend using
70 percent of the PPI for Petroleum Refineries (BLS series code
#PCU32411-32411) and 30 percent of the PPI Commodity for Natural Gas
(BLS series code #WPU0531). We believe that these 2 price proxies are
the most technically appropriate indices available to measure the price
growth of the Fuel, Oil, and Gasoline cost category in the proposed
2012-based IPF market basket.
Water and Sewerage
We are proposing to continue to use the CPI for Water and Sewerage
Maintenance (BLS series code #CUUR0000SEHG01) to measure the price
growth of this cost category. This is the same proxy used in the 2008-
based RPL market basket.
Professional Liability Insurance
We are proposing to continue to use the CMS Hospital Professional
Liability Index to measure changes in professional liability insurance
(PLI) premiums. To generate this index, we collect commercial insurance
premiums for a fixed level of coverage while holding non-price factors
constant (such as a change in the level of coverage). This is the same
proxy used in the 2008-based RPL market basket.
Pharmaceuticals
We are proposing to continue to use the PPI for Pharmaceuticals for
Human Use, Prescription (BLS series code #WPUSI07003) to measure the
price growth of this cost category. This is the same proxy used in the
2008-based RPL market basket.
Food: Direct Purchases
We are proposing to continue to use the PPI for Processed Foods and
Feeds (BLS series code #WPU02) to measure the price growth of this cost
category. This is the same proxy used in the 2008-based RPL market
basket.
Food: Contract Purchases
We are proposing to continue to use the CPI for Food Away From Home
(BLS series code #CUUR0000SEFV) to measure the price growth of this
cost category. This is the same proxy used in the 2008-based RPL market
basket.
[[Page 25027]]
Chemicals
We are proposing to continue to use a four part blended PPI
composed of the PPI for Industrial Gas Manufacturing (BLS series code
PCU325120325120P), the PPI for Other Basic Inorganic Chemical
Manufacturing (BLS series code #PCU32518-32518), the PPI for Other
Basic Organic Chemical Manufacturing (BLS series code #PCU32519-32519),
and the PPI for Soap and Cleaning Compound Manufacturing (BLS series
code #PCU32561-32561). We propose updating the blend weights using 2007
Benchmark I-O data which, compared to 2002 Benchmark I-O data, is
weighted more toward organic chemical products and weighted less toward
inorganic chemical products.
Table 10 below shows the proposed weights for each of the four PPIs
used to create the blended PPI. These are the same four proxies used in
the 2008-based RPL market basket; however, the blended PPI weights in
the 2008-based RPL market baskets were based on 2002 Benchmark I-O
data.
Table 10--Blended Chemical PPI Weights
----------------------------------------------------------------------------------------------------------------
Proposed 2012-
Based IPF 2008-Based RPL
Name weights weights NAICS
(percent) (percent)
----------------------------------------------------------------------------------------------------------------
PPI for Industrial Gas Manufacturing............................ 32 35 325120
PPI for Other Basic Inorganic Chemical Manufacturing............ 17 25 325180
PPI for Other Basic Organic Chemical Manufacturing.............. 45 30 325190
PPI for Soap and Cleaning Compound Manufacturing................ 6 10 325610
----------------------------------------------------------------------------------------------------------------
Medical Instruments
We are proposing to use a blend for the Medical Instruments cost
category. The 2007 Benchmark Input-Output data shows an approximate 50/
50 split between Surgical and Medical Instruments and Medical and
Surgical Appliances and Supplies for this cost category. Therefore, we
propose a blend composed of 50 percent of the commodity-based PPI for
Surgical and Medical Instruments (BLS code #WPU1562) and 50 percent of
the commodity-based PPI for Medical and Surgical Appliances and
Supplies (BLS code #WPU1563). The 2008-based RPL market basket uses the
single, higher level PPI for Medical, Surgical, and Personal Aid
Devices (BLS series code #WPU156).
Rubber and Plastics
We are proposing to continue to use the PPI for Rubber and Plastic
Products (BLS series code #WPU07) to measure price growth of this cost
category. This is the same proxy used in the 2008-based RPL market
basket.
Paper and Printing Products
We are proposing to continue to use the PPI for Converted Paper and
Paperboard Products (BLS series code #WPU0915) to measure the price
growth of this cost category. This is the same proxy used in the 2008-
based RPL market basket.
Miscellaneous Products
We are proposing to continue to use the PPI for Finished Goods Less
Food and Energy (BLS series code #WPUSOP3500) to measure the price
growth of this cost category. This is the same proxy used in the 2008-
based RPL market basket.
Professional Fees: Labor-Related
We are proposing to continue to use the ECI for Total Compensation
for Private Industry workers in Professional and Related (BLS series
code #CIU2010000120000I) to measure the price growth of this category.
This is the same proxy used in the 2008-based RPL market basket.
Administrative and Facilities Support Services
We are proposing to continue to use the ECI for Total Compensation
for Private Industry workers in Office and Administrative Support (BLS
series code #CIU2010000220000I) to measure the price growth of this
category. This is the same proxy used in the 2008-based RPL market
basket.
Installation, Maintenance, and Repair
We are proposing to use the ECI for Total Compensation for Civilian
workers in Installation, Maintenance, and Repair (BLS series code
#CIU1010000430000I) to measure the price growth of this new cost
category. Previously these costs were included in the All Other: Labor-
related Services category and were proxied by the ECI for Total
Compensation for Private Industry workers in Service Occupations (BLS
series code #CIU2010000300000I). We believe that this index better
reflects the price changes of labor associated with maintenance-related
services and its incorporation represents a technical improvement to
the market basket.
All Other: Labor-Related Services
We are proposing to continue to use the ECI for Total Compensation
for Private Industry workers in Service Occupations (BLS series code
#CIU2010000300000I) to measure the price growth of this cost category.
This is the same proxy used in the 2008-based RPL market basket.
Professional Fees: Nonlabor-Related
We are proposing to continue to use the ECI for Total Compensation
for Private Industry workers in Professional and Related (BLS series
code #CIU2010000120000I) to measure the price growth of this category.
This is the same proxy used in the 2008-based RPL market basket.
Financial Services
We are proposing to continue to use the ECI for Total Compensation
for Private Industry workers in Financial Activities (BLS series code
#CIU201520A000000I) to measure the price growth of this cost category.
This is the same proxy used in the 2008-based RPL market basket.
Telephone Services
We are proposing to continue to use the CPI for Telephone Services
(BLS series code #CUUR0000SEED) to measure the price growth of this
cost category. This is the same proxy used in the 2008-based RPL market
basket.
All Other: Nonlabor-Related Services
We are proposing to continue to use the CPI for All Items Less Food
and Energy (BLS series code #CUUR0000SA0L1E) to measure the price
growth of this cost category. This is the same proxy used in the 2008-
based RPL market basket.
[[Page 25028]]
ii. Price Proxies for the Capital Portion of the Proposed 2012-Based
IPF Market Basket
Capital Price Proxies Prior to Vintage Weighting
We are proposing to apply the same price proxies to the detailed
capital-related cost categories as were applied in the 2008-based RPL
market basket, which are provided in Table 12 and described below. We
are also proposing to continue to vintage weight the capital price
proxies for Depreciation and Interest in order to capture the long-term
consumption of capital. This vintage weighting method is similar to the
method used for the 2008-based RPL market basket and is described
below.
We are proposing to proxy the Depreciation: Building and Fixed
Equipment cost category by BEA's Chained Price Index for Nonresidential
Construction for Hospitals and Special Care Facilities (BEA Table
5.4.4. Price Indexes for Private Fixed Investment in Structures by
Type). We are proposing to proxy the Depreciation: Movable Equipment
cost category by the PPI for Machinery and Equipment (BLS series code
#WPU11). We are proposing to proxy the Nonprofit Interest cost category
by the average yield on domestic municipal bonds (Bond Buyer 20-bond
index). We are proposing to proxy the For-profit Interest cost category
by the average yield on Moody's Aaa bonds (Federal Reserve). We are
proposing to proxy the Other Capital-Related cost category by the CPI-U
for Rent of Primary Residence (BLS series code #CUUS0000SEHA). We
believe these are the most appropriate proxies for IPF capital-related
costs that meet our selection criteria of relevance, timeliness,
availability, and reliability.
Vintage Weights for Price Proxies
Because capital is acquired and paid for over time, capital-related
expenses in any given year are determined by both past and present
purchases of physical and financial capital. The vintage-weighted
capital-related portion of the proposed 2012-based IPF market basket is
intended to capture the long-term consumption of capital, using vintage
weights for depreciation (physical capital) and interest (financial
capital). These vintage weights reflect the proportion of capital-
related purchases attributable to each year of the expected life of
building and fixed equipment, movable equipment, and interest. We are
proposing to use vintage weights to compute vintage-weighted price
changes associated with depreciation and interest expenses.
Capital-related costs are inherently complicated and are determined
by complex capital-related purchasing decisions, over time, based on
such factors as interest rates and debt financing. In addition, capital
is depreciated over time instead of being consumed in the same period
it is purchased. By accounting for the vintage nature of capital, we
are able to provide an accurate and stable annual measure of price
changes. Annual non-vintage price changes for capital are unstable due
to the volatility of interest rate changes and, therefore, do not
reflect the actual annual price changes for IPF capital-related costs.
The capital-related component of the proposed 2012-based IPF market
basket reflects the underlying stability of the capital-related
acquisition process.
To calculate the vintage weights for depreciation and interest
expenses, we first need a time series of capital-related purchases for
building and fixed equipment and movable equipment. We found no single
source that provides an appropriate time series of capital-related
purchases by hospitals for all of the above components of capital
purchases. The early Medicare cost reports did not have sufficient
capital-related data to meet this need. Data we obtained from the
American Hospital Association (AHA) do not include annual capital-
related purchases. However, the AHA does provide a consistent database
of total expenses back to 1963. Consequently, we are proposing to use
data from the AHA Panel Survey and the AHA Annual Survey to obtain a
time series of total expenses for hospitals. We are then proposing to
use data from the AHA Panel Survey supplemented with the ratio of
depreciation to total hospital expenses obtained from the Medicare cost
reports to derive a trend of annual depreciation expenses for 1963
through 2012. We propose to separate these depreciation expenses into
annual amounts of building and fixed equipment depreciation and movable
equipment depreciation as determined above. From these annual
depreciation amounts we derive annual end-of-year book values for
building and fixed equipment and movable equipment using the expected
life for each type of asset category. While data are not available that
are specific to IPFs, we believe this information for all hospitals
serves as a reasonable alternative for the pattern of depreciation for
IPFs.
To continue to calculate the vintage weights for depreciation and
interest expenses, we also need the expected lives for Building and
Fixed Equipment, Movable Equipment, and Interest for the proposed 2012-
based IPF market basket. We are proposing to calculate the expected
lives using Medicare cost report data from freestanding and hospital-
based IPFs. The expected life of any asset can be determined by
dividing the value of the asset (excluding fully depreciated assets) by
its current year depreciation amount. This calculation yields the
estimated expected life of an asset if the rates of depreciation were
to continue at current year levels, assuming straight-line
depreciation. We are proposing to determine the expected life of
building and fixed equipment separately for hospital-based IPFs and
freestanding IPFs and weight these expected lives using the percent of
total capital costs each provider type represents. We are proposing to
apply a similar method for movable equipment. Using these proposed
methods, we determined the average expected life of building and fixed
equipment to be equal to 23 years, and the average expected life of
movable equipment to be equal to 11 years. For the expected life of
interest, we believe vintage weights for interest should represent the
average expected life of building and fixed equipment because, based on
previous research described in the FY 1997 IPPS final rule (61 FR
46198), the expected life of hospital debt instruments and the expected
life of buildings and fixed equipment are similar. We note that for the
2008-based RPL market basket, we used FY 2008 Medicare cost reports for
IPPS hospitals to determine the expected life of building and fixed
equipment and movable equipment (76 FR 51763). The 2008-based RPL
market basket was based on an expected average life of building and
fixed equipment of 26 years and an expected average life of movable
equipment of 11 years, which were both calculated using data for IPPS
hospitals.
Multiplying these expected lives by the annual depreciation amounts
results in annual year-end asset costs for building and fixed equipment
and movable equipment. We then calculate a time series, beginning in
1964, of annual capital purchases by subtracting the previous year's
asset costs from the current year's asset costs.
For the building and fixed equipment and movable equipment vintage
weights, we are proposing to use the real annual capital-related
purchase amounts for each asset type to capture the actual amount of
the physical acquisition, net of the effect of price inflation. These
real annual capital-related purchase amounts are produced by deflating
the nominal annual purchase amount by the associated price
[[Page 25029]]
proxy as provided above. For the interest vintage weights, we are
proposing to use the total nominal annual capital-related purchase
amounts to capture the value of the debt instrument (including, but not
limited to, mortgages and bonds). Using these capital-related purchase
time series specific to each asset type, we are proposing to calculate
the vintage weights for building and fixed equipment, for movable
equipment, and for interest.
The vintage weights for each asset type are deemed to represent the
average purchase pattern of the asset over its expected life (in the
case of building and fixed equipment and interest, 23 years, and in the
case of movable equipment, 11 years). For each asset type, we used the
time series of annual capital-related purchase amounts available from
2012 back to 1964. These data allow us to derive twenty-seven 23-year
periods of capital-related purchases for building and fixed equipment
and interest, and thirty-nine 11-year periods of capital-related
purchases for movable equipment. For each 23-year period for building
and fixed equipment and interest, or 11-year period for movable
equipment, we calculate annual vintage weights by dividing the capital-
related purchase amount in any given year by the total amount of
purchases over the entire 23-year or 11-year period. This calculation
is done for each year in the 23-year or 11-year period and for each of
the periods for which we have data. We then calculate the average
vintage weight for a given year of the expected life by taking the
average of these vintage weights across the multiple periods of data.
The vintage weights for the capital-related portion of the 2008-based
RPL market basket and the proposed 2012-based IPF market basket are
presented in Table 11 below.
Table 11--2008-Based RPL Market Basket and Proposed 2012-Based IPF Market Basket Vintage Weights for Capital-Related Price Proxies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Building and fixed equipment Movable equipment Interest
-----------------------------------------------------------------------------------------------------------------
Year 2012-based 23 2008-based 26 2012-based 11 2008-based 11 2012-based 23 2008-based 26
years years years years years years
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................... 0.029 0.021 0.069 0.071 0.017 0.010
2..................................... 0.031 0.023 0.073 0.075 0.019 0.012
3..................................... 0.034 0.025 0.077 0.080 0.022 0.014
4..................................... 0.036 0.027 0.083 0.083 0.024 0.016
5..................................... 0.037 0.028 0.087 0.085 0.026 0.018
6..................................... 0.039 0.030 0.091 0.089 0.028 0.020
7..................................... 0.040 0.031 0.096 0.092 0.030 0.021
8..................................... 0.041 0.033 0.100 0.098 0.032 0.024
9..................................... 0.042 0.035 0.103 0.103 0.035 0.026
10.................................... 0.044 0.037 0.107 0.109 0.038 0.029
11.................................... 0.045 0.039 0.114 0.116 0.040 0.033
12.................................... 0.045 0.041 ................. ................. 0.042 0.035
13.................................... 0.045 0.042 ................. ................. 0.044 0.038
14.................................... 0.046 0.043 ................. ................. 0.046 0.041
15.................................... 0.046 0.044 ................. ................. 0.048 0.043
16.................................... 0.048 0.045 ................. ................. 0.053 0.046
17.................................... 0.049 0.046 ................. ................. 0.057 0.049
18.................................... 0.050 0.047 ................. ................. 0.060 0.052
19.................................... 0.051 0.047 ................. ................. 0.063 0.053
20.................................... 0.051 0.045 ................. ................. 0.066 0.053
21.................................... 0.051 0.045 ................. ................. 0.067 0.055
22.................................... 0.050 0.045 ................. ................. 0.069 0.056
23.................................... 0.052 0.046 ................. ................. 0.073 0.060
24.................................... ................. 0.046 ................. ................. ................. 0.063
25.................................... ................. 0.045 ................. ................. ................. 0.064
26.................................... ................. 0.046 ................. ................. ................. 0.068
-----------------------------------------------------------------------------------------------------------------
Total............................. 1.000 1.000 1.000 1.000 1.000 1.000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Numbers may not add to total due to rounding.
The process of creating vintage-weighted price proxies requires
applying the vintage weights to the price proxy index where the last
applied vintage weight in Table 11 is applied to the most recent data
point. We have provided on the CMS Web site an example of how the
vintage weighting price proxies are calculated, using example vintage
weights and example price indices. The example can be found at the
following link: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html in the zip file titled ``Weight Calculations
as described in the IPPS FY 2010 Proposed Rule.''
iii. Summary of Price Proxies of the Proposed 2012-Based IPF Market
Basket
Table 12 shows both the operating and capital price proxies for the
proposed 2012-based IPF Market Basket.
Table 12--Price Proxies for the Proposed 2012-Based IPF Market Basket
------------------------------------------------------------------------
Weight
Cost description Price proxies (percent)
------------------------------------------------------------------------
Total.......................... ....................... 100.0
[[Page 25030]]
Compensation............... ....................... 65.2
Wages and Salaries..... Blended Wages and 51.9
Salaries Price Proxy.
Employee Benefits...... Blended Benefits Price 13.3
Proxy.
Utilities.................. ....................... 1.8
Electricity............ PPI for Commercial 0.8
Electric Power.
Fuel, Oil, and Gasoline Blend of the PPI for 0.9
Petroleum Refineries
and PPI for Natural
Gas.
Water & Sewerage....... CPI-U for Water and 0.1
Sewerage Maintenance.
Professional Liability ....................... 1.1
Insurance.
Malpractice............ CMS Hospital 1.1
Professional Liability
Insurance Premium
Index.
All Other Products and ....................... 25.0
Services.
All Other Products......... ....................... 11.7
Pharmaceuticals........ PPI for Pharmaceuticals 4.8
for human use,
prescription.
Food: Direct Purchases. PPI for Processed Foods 1.4
and Feeds.
Food: Contract Services CPI-U for Food Away 0.9
From Home.
Chemicals.............. Blend of Chemical PPIs. 0.6
Medical Instruments.... Blend of the PPI for 1.9
Surgical and medical
instruments and PPI
for Medical and
surgical appliances
and supplies.
Rubber & Plastics...... PPI for Rubber and 0.5
Plastic Products.
Paper and Printing PPI for Converted Paper 1.0
Products. and Paperboard
Products.
Miscellaneous Products. PPI for Finished Goods 0.7
Less Food and Energy.
All Other Services......... ....................... 13.3
Labor-Related Services..... ....................... 6.7
Professional Fees: ECI for Total 2.9
Labor-related. compensation for
Private industry
workers in
Professional and
related.
Administrative and ECI for Total 0.7
Facilities Support compensation for
Services. Private industry
workers in Office and
administrative support.
Installation, ECI for Total 1.6
Maintenance, and compensation for
Repair. Civilian workers in
Installation,
maintenance, and
repair.
All Other: Labor- ECI for Total 1.5
related Services. compensation for
Private industry
workers in Service
occupations.
Nonlabor-Related Services.. ....................... 6.6
Professional Fees: ECI for Total 2.6
Nonlabor-related. compensation for
Private industry
workers in
Professional and
related.
Financial services..... ECI for Total 2.3
compensation for
Private industry
workers in Financial
activities.
Telephone Services..... CPI-U for Telephone 0.6
Services.
All Other: Nonlabor- CPI-U for All Items 1.1
related Services. Less Food and Energy.
Capital-Related Costs...... ....................... 7.0
Depreciation............... ....................... 5.2
Fixed Assets........... BEA chained price index 3.7
for nonresidential
construction for
hospitals and special
care facilities--
vintage weighted (23
years).
Movable Equipment...... PPI for machinery and 1.5
equipment--vintage
weighted (11 years).
Interest Costs............. ....................... 1.2
Government/Nonprofit... Average yield on 1.0
domestic municipal
bonds (Bond Buyer 20
bonds)--vintage
weighted (23 years).
For Profit............. Average yield on 0.2
Moody's Aaa bonds--
vintage weighted (23
years).
Other Capital-Related Costs CPI-U for Rent of 0.6
primary residence.
------------------------------------------------------------------------
Note: Totals may not sum to 100.0 percent due to rounding.
4. Proposed FY 2016 Market Basket Update
For FY 2016 (that is, beginning October 1, 2015 and ending
September 30, 2016), we are proposing to use an estimate of the
proposed 2012-based IPF market basket increase factor to update the IPF
PPS base payment rate. Consistent with historical practice, we estimate
the market basket update for the IPF PPS based on IHS Global Insight's
forecast using the most recent available data. IHS Global Insight
(IGI), Inc. is a nationally recognized economic and financial
forecasting firm that contracts with CMS to forecast the components of
the market baskets and multifactor productivity (MFP).
Based on IGI's first quarter 2015 forecast with historical data
through the fourth quarter of 2014, the projected proposed 2012-based
IPF market basket increase factor for FY 2016 is 2.7 percent.
Therefore, consistent with our historical practice of estimating market
basket increases based on the best available data, we are proposing a
market basket increase factor of 2.7 percent for FY 2016. We are also
proposing that if more recent data are subsequently available (for
example, a more recent estimate of the market basket) we would use such
data, to determine the FY 2016 update in the final rule.
For comparison, the current 2008-based RPL market basket is
projected to increase by 2.8 percent in FY 2016 based on IGI's first
quarter 2015 forecast. Table 13 compares the proposed 2012-based IPF
market basket and the 2008-based RPL market basket percent changes.
[[Page 25031]]
Table 13--Proposed 2012-Based IPF Market Basket and 2008-Based RPL
Market Basket Percent Changes, FY 2010 through FY 2018
------------------------------------------------------------------------
Proposed 2012-
Based IPF 2008-Based RPL
Fiscal Year (FY) market basket market basket
index percent index percent
change change
------------------------------------------------------------------------
Historical data:
FY 2010............................. 2.0 2.2
FY 2011............................. 2.2 2.5
FY 2012............................. 1.9 2.2
FY 2013............................. 2.0 2.1
FY 2014............................. 1.9 1.8
Average 2010-2014................... 2.0 2.2
Forecast:
FY 2015............................. 2.0 2.2
FY 2016............................. 2.7 2.8
FY 2017............................. 3.0 3.0
FY 2018............................. 3.0 3.1
Average 2015-2018................... 2.7 2.8
------------------------------------------------------------------------
Note: These market basket percent changes do not include any further
adjustments as may be statutorily required. Source: IHS Global
Insight, Inc. 1st quarter 2015 forecast.
For FY 2016, the proposed 2012-based IPF market basket update (2.7
percent) is one tenth of a percentage point lower than the 2008-based
RPL market basket (2.8 percent). The 0.1 percentage point difference
stems from the lower Pharmaceuticals cost weight in the proposed 2012-
based IPF market basket (4.8 percent) compared to the 2008-based RPL
market basket (6.5 percent) as well as from the use of the blended
price proxies for the Wages and Salaries and Employee Benefits cost
categories.
5. Proposed Productivity Adjustment
Section 1886(s)(2)(A)(i) of the Act requires the application of the
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of
the Act to the IPF PPS for the RY beginning in 2012 (that is, a RY that
coincides with a FY) and each subsequent RY. The statute defines the
productivity adjustment to be equal to the 10-year moving average of
changes in annual economy-wide private nonfarm business multifactor
productivity (MFP) (as projected by the Secretary for the 10-year
period ending with the applicable FY, year, cost reporting period, or
other annual period) (the ``MFP adjustment''). The Bureau of Labor
Statistics (BLS) publishes the official measure of private non-farm
business MFP. We refer readers to the BLS Web site at https://www.bls.gov/mfp for the BLS historical published MFP data.
MFP is derived by subtracting the contribution of labor and capital
inputs growth from output growth. The projections of the components of
MFP are currently produced by IGI, a nationally recognized economic
forecasting firm with which CMS contracts to forecast the components of
the market baskets and MFP. As described in the FY 2012 IPPS/LTCH final
rule (76 FR 51690 through 51692), in order to generate a forecast of
MFP, IGI replicated the MFP measure calculated by the BLS using a
series of proxy variables derived from IGI's U.S. macroeconomic models.
In the FY 2012 rule, we identified each of the major MFP component
series employed by the BLS to measure MFP as well as provided the
corresponding concepts determined to be the best available proxies for
the BLS series.
Beginning with the FY 2016 rulemaking cycle, the MFP adjustment is
calculated using a revised series developed by IGI to proxy the
aggregate capital inputs. Specifically, IGI has replaced the Real
Effective Capital Stock used for Full Employment GDP with a forecast of
BLS aggregate capital inputs recently developed by IGI using a
regression model. This series provides a better fit to the BLS capital
inputs, as measured by the differences between the actual BLS capital
input growth rates and the estimated model growth rates over the
historical time period. Therefore, we are using IGI's most recent
forecast of the BLS capital inputs series in the MFP calculations
beginning with the FY 2016 rulemaking cycle. A complete description of
the MFP projection methodology is available on our Web site at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html. Although
we discuss the IGI changes to the MFP proxy series in this proposed
rule, in the future, when IGI makes changes to the MFP methodology, we
will announce them on our Web site rather than in the annual
rulemaking.
Using IGI's first quarter 2015 forecast, the MFP adjustment for FY
2016 (the 10-year moving average of MFP for the period ending FY 2016)
is projected to be 0.6 percent. Thus, in accordance with section
1886(s)(2)(A)(i) of the Act, we propose to base the FY 2016 market
basket update, which is used to determine the applicable percentage
increase for the IPF payments, on the most recent estimate of the
proposed 2012-based IPF market basket (currently estimated to be 2.7
percent based on IGI's first quarter 2015 forecast). We propose to then
reduce this percentage increase by the current estimate of the MFP
adjustment for FY 2016 of 0.6 percentage point (the 10-year moving
average of MFP for the period ending FY 2016 based on IGI's first
quarter 2015 forecast). Furthermore, we also propose that if more
recent data are subsequently available (for example, a more recent
estimate of the market basket and MFP adjustment), we would use such
data to determine the FY 2016 market basket update and MFP adjustment
in the final rule.
Section 1886(s)(2)(A)(ii) of the Act requires the application of an
``other adjustment'' that reduces any update to an IPF PPS base rate by
percentages specified in section 1886(s)(3) of the Act for the RY
beginning in 2010 through the RY beginning in 2019. For the RY
beginning in 2015 (that is, FY 2016), section 1886(s)(3)(D) of the Act
requires the reduction to be 0.2 percentage point. We are proposing to
implement the productivity adjustment and `other adjustment' in this FY
2016 IPF PPS
[[Page 25032]]
proposed rule. We invite public comment on these proposals.
6. Proposed Labor-Related Share
Due to variations in geographic wage levels and other labor-related
costs, we believe that payment rates under the IPF PPS should continue
to be adjusted by a geographic wage index, which would apply to the
labor-related portion of the Federal per diem base rate (hereafter
referred to as the labor-related share). The labor-related share is
determined by identifying the national average proportion of total
costs that are related to, influenced by, or vary with the local labor
market. We continue to classify a cost category as labor-related if the
costs are labor-intensive and vary with the local labor market. As
stated in the FY 2015 IPF PPS final rule (79 FR 45943), the labor-
related share was defined as the sum of the relative importance of
Wages and Salaries, Employee Benefits, Professional Fees: Labor-
Related Services, Administrative and Facilities Support Services, All
Other: Labor-related Services, and a portion of the Capital Costs from
the 2008-based RPL market basket.
Based on our definition of the labor-related share and the cost
categories in the proposed 2012-based IPF market basket, we are
proposing to include in the labor-related share the sum of the relative
importance of Wages and Salaries, Employee Benefits, Professional Fees:
Labor- Related, Administrative and Facilities Support Services,
Installation, Maintenance, and Repair, All Other: Labor-related
Services, and a portion of the Capital-Related cost weight from the
proposed 2012-based IPF market basket. As noted in Section III.A.3.b.i
of this proposed rule, for the proposed 2012-based IPF market basket,
we have created a separate cost category for Installation, Maintenance
and Repair services. These expenses were previously included in the
``All Other'' Labor-related Services cost category in the 2008-based
RPL market basket, along with other services, including but not limited
to janitorial, waste management, security, and dry cleaning/laundry
services. Because these services tend to be labor-intensive and are
mostly performed at the facility (and, therefore, unlikely to be
purchased in the national market), we continue to believe that they
meet our definition of labor-related services.
Similar to the 2008-based RPL market basket, the proposed 2012-
based IPF market basket includes 2 cost categories for nonmedical
Professional fees (including but not limited to, expenses for legal,
accounting, and engineering services). These are Professional Fees:
Labor-related and Professional Fees: Nonlabor-related. For the proposed
2012-based IPF market basket, we propose to estimate the labor-related
percentage of non-medical professional fees (and assign these expenses
to the Professional Fees: Labor-related services cost category) based
on the same method that was used to determine the labor-related
percentage of professional fees in the 2008-based RPL market basket.
To summarize, the professional services survey found that hospitals
purchase the following proportion of these four services outside of
their local labor market:
34 percent of accounting and auditing services.
30 percent of engineering services.
33 percent of legal services.
42 percent of management consulting services.
We applied each of these percentages to the respective Benchmark I-
O cost category underlying the professional fees cost category to
determine the Professional Fees: Nonlabor-related costs. The
Professional Fees: Labor-related costs were determined to be the
difference between the total costs for each Benchmark I-O category and
the Professional Fees: Nonlabor-related costs. This is the same
methodology that we used to separate the 2008-based RPL market basket
professional fees category into Professional Fees: Labor-related and
Professional Fees: Nonlabor-related cost categories. For more detail
regarding this methodology see the FY 2012 IPF final rule (76 FR
26445).
In addition to the professional services listed above, we also
classified expenses under NAICS 55, Management of Companies and
Enterprises, into the Professional Fees cost category as was done in
the 2008-based RPL market basket. The NAICS 55 data are mostly
comprised of corporate, subsidiary, and regional managing offices, or
otherwise referred to as home offices. Since many facilities are not
located in the same geographic area as their home office, we analyzed
data from a variety of sources in order to determine what proportion of
these costs should be appropriately included in the labor-related
share. For the 2012-based IPF market basket, we are proposing to derive
the home office percentages using data for both freestanding IPF
providers and hospital-based IPF providers. In the 2008-based RPL
market basket, we used the home office percentages based on the data
reported by freestanding IRFs, IPFs, and LTCHs. Using data primarily
from the Medicare cost reports and the Home Office Medicare Records
(HOMER) database that provides the address (including city and state)
for home offices, we were able to determine that 36 percent of the
total number of freestanding and hospital-based IPFs that had home
offices had those home offices located in their respective local labor
markets--defined as being in the same Metropolitan Statistical Area
(MSA).
The Medicare cost report requires hospitals to report their home
office provider numbers. Using the HOMER database to determine the home
office location for each home office provider number, we compared the
location of the provider with the location of the hospital's home
office. We then placed providers into one of the following 2 groups:
Group 1--Provider and home office are located in different
MSAs.
Group 2--Provider and home office are located in the same
MSA.
We found that 64 percent of the providers with home offices were
classified into Group 1 (that is, different MSA) and, thus, these
providers were determined to not be located in the same local labor
market as their home office. We found that 36 percent of all providers
with home offices were classified into Group 2 (that is, the same MSA).
Given these results, we are proposing to classify 36 percent of the
Professional Fees costs into the Professional Fees: Labor-related cost
category and the remaining 64 percent into the Professional Fees:
Nonlabor-related Services cost category. This methodology for
apportioning the Professional Fee expenses between labor-related and
nonlabor-related categories is similar to the method used in the 2008-
based RPL market basket (see 76 FR 26445).
Using this proposed method and the IHS Global Insight, Inc. 4th
quarter 2014 forecast for the proposed 2012-based IPF market basket,
the proposed IPF labor-related share for FY 2016 is the sum of the FY
2016 relative importance of each labor-related cost category. The
relative importance reflects the different rates of price change for
these cost categories between the base year (FY 2012) and FY 2016.
Table 14 shows the proposed FY 2016 labor-related share using the
proposed 2012-based IPF market basket relative importance and the FY
2015 labor-related share using the 2008-based RPL market basket.
The sum of the relative importance for FY 2016 operating costs
(Wages and Salaries, Employee Benefits, Professional Fees: Labor-
related, Administrative and Facilities Support Services, Installation
Maintenance & Repair Services, and All Other: Labor-related Services)
is 71.8 percent, as
[[Page 25033]]
shown in Table 14. We are proposing to specify the labor-related share
to one decimal place, which is consistent with the IPPS labor-related
share (currently the Labor-related share from the RPL market basket is
specified to 3 decimal places).
We are proposing that the portion of Capital that is influenced by
the local labor market is estimated to be 46 percent, which is the same
percentage applied to the 2008-based RPL market basket. Since the
relative importance for Capital-Related Costs is 6.8 percent of the
proposed 2012-based IPF market basket in FY 2016, we are proposing to
take 46 percent of 6.8 percent to determine the proposed labor-related
share of Capital for 2016. The result would be 3.1 percent, which we
propose to add to 71.8 percent for the operating cost amount to
determine the total proposed labor-related share for FY 2016.
The FY 2016 labor-related share using the proposed 2012-based IPF
market basket is about five percentage points higher than the FY 2015
labor-related share using the 2008-based RPL market basket. Of the five
percentage point difference, 3 percentage points is attributable to the
higher Wages and Salaries and Employee Benefits cost weights in the
2012-based IPF market basket compared to the 2008-based RPL market
basket, while 2 percentage points is attributable to the higher weight
associated with the labor-related services cost categories. We would
note that the higher Wages and Salaries cost weight in the 2012-based
IPF market basket relative to the 2008-based RPL market basket is the
result of freestanding IPFs having a larger percentage of costs
attributable to labor than freestanding IRFs and Long-term care
hospitals. These latter facilities were included in the 2008-based RPL
market basket.
Table 14--Proposed 2016 IPF Labor-Related Share
------------------------------------------------------------------------
FY 2016 labor-
related share FY 2015 final
based on proposed labor- related
2012- based IPF share \2\
market basket \1\
------------------------------------------------------------------------
Wages and Salaries................ 51.7 48.271
Employee Benefits................. 13.4 12.936
Professional Fees: Labor-related.. 2.9 2.058
Administrative and Facilities 0.7 0.415
Support Services.................
Installation, Maintenance and 1.6 .................
Repair...........................
All Other: Labor-related Services. 1.5 2.061
-------------------------------------
Subtotal...................... 71.8 65.741
Labor-related portion of capital 3.1 3.553
(46%)............................
-------------------------------------
Total LRS................. 74.9 69.294
------------------------------------------------------------------------
\1\ IHS Global Insight, Inc. 4th quarter 2014 forecast.
\2\ Federal Register 79-FR-45943.
In weighing the effects of the change in the LRS, we considered
whether to recommend a 2-year transitional implementation of the
increase in the LRS. We recognize that IPFs with wage index values of
less than one would be adversely affected by an increased LRS, as a
larger share of the base rate would be adjusted by the wage index
value. About 69 percent of IPFs would have wage index values of less
than one using FY2015 CBSA data, and 30 percent of these providers are
rural. While the LRS would be updated in a budget neutral fashion so
that the overall impact on payments is zero, there would still be
distributional effects on specific categories of IPFs. We considered
the distributional effects of the multiple proposals made in this
proposed rule, including the proposal to update the full LRS in FY
2016, and we found that the negative impact of updating the LRS in a
single year, without a transition, was relatively small, as shown in
Table 26 in section VII. of this proposed rule. Additionally, we are
proposing 2 other adjustments to benefit providers: A transitional wage
index and a phase-out of the 17 percent rural adjustment for the 37
IPFs that would change from rural to urban status due to the new CBSA
delineations. As presented in section III.A.6. of this proposed rule,
we are proposing to use the 2012-based IPF market basket relative
importance's to determine the FY 2016 IPF LRS. We believe this is
technically appropriate as it is based on more recent, provider-
specific data for IPFs. For all of these reasons, we propose to
implement the full LRS in FY 2016, but solicit comments on this issue.
B. Proposed Updates to the IPF PPS for FY 2016 (Beginning October 1,
2015)
The IPF PPS is based on a standardized Federal per diem base rate
calculated from the IPF average per diem costs and adjusted for budget-
neutrality in the implementation year. The Federal per diem base rate
is used as the standard payment per day under the IPF PPS and is
adjusted by the patient-level and facility-level adjustments that are
applicable to the IPF stay. A detailed explanation of how we calculated
the average per diem cost appears in the November 2004 IPF PPS final
rule (69 FR 66926).
1. Determining the Standardized Budget-Neutral Federal Per Diem Base
Rate
Section 124(a)(1) of the BBRA required that we implement the IPF
PPS in a budget-neutral manner. In other words, the amount of total
payments under the IPF PPS, including any payment adjustments, must be
projected to be equal to the amount of total payments that would have
been made if the IPF PPS were not implemented. Therefore, we calculated
the budget-neutrality factor by setting the total estimated IPF PPS
payments to be equal to the total estimated payments that would have
been made under the Tax Equity and Fiscal Responsibility Act of 1982
(TEFRA) (Pub. L. 97-248) methodology had the IPF PPS not been
implemented. A step-by-step description of the methodology used to
estimate payments under the TEFRA payment system appears in the
November 2004 IPF PPS final rule (69 FR 66926).
[[Page 25034]]
Under the IPF PPS methodology, we calculated the final Federal per
diem base rate to be budget-neutral during the IPF PPS implementation
period (that is, the 18-month period from January 1, 2005 through June
30, 2006) using a July 1 update cycle. We updated the average cost per
day to the midpoint of the IPF PPS implementation period (that is,
October 1, 2005), and this amount was used in the payment model to
establish the budget-neutrality adjustment.
Next, we standardized the IPF PPS Federal per diem base rate to
account for the overall positive effects of the IPF PPS payment
adjustment factors by dividing total estimated payments under the TEFRA
payment system by estimated payments under the IPF PPS. Additional
information concerning this standardization can be found in the
November 2004 IPF PPS final rule (69 FR 66932) and the RY 2006 IPF PPS
final rule (71 FR 27045). We then reduced the standardized Federal per
diem base rate to account for the outlier policy, the stop loss
provision, and anticipated behavioral changes. A complete discussion of
how we calculated each component of the budget-neutrality adjustment
appears in the November 2004 IPF PPS final rule (69 FR 66932 through
66933) and in the May 2006 IPF PPS final rule (71 FR 27044 through
27046). The final standardized budget-neutral Federal per diem base
rate established for cost reporting periods beginning on or after
January 1, 2005 was calculated to be $575.95.
The Federal per diem base rate has been updated in accordance with
applicable statutory requirements and Sec. 412.428 through publication
of annual notices or proposed and final rules. A detailed discussion on
the standardized budget-neutral Federal per diem base rate and the
electroconvulsive therapy (ECT) rate appears in the August 2013 IPF PPS
update notice (78 FR 46738 through 46739). These documents are
available on the CMS Web site at https://www.cms.hhs.gov/InpatientPsychFacilPPS/.
2. Proposed FY 2016 Update of the Federal Per Diem Base Rate and
Electroconvulsive Therapy (ECT) Rate
The current (that is, FY 2015) Federal per diem base rate is
$728.31 and the ECT rate is $313.55. For FY 2016, we are proposing to
apply an update of 1.9 percent (that is, the proposed FY 2012-based
IPF-specific market basket increase for FY 2016 of 2.7 percent less the
proposed productivity adjustment of 0.6 percentage point, and further
reduced by the 0.2 percentage point required under section1886(s)(3)(D)
of the Act), and the wage index budget-neutrality factor of 1.0041 (as
discussed in section III.D.1.e. of this proposed rule) to the FY 2015
Federal per diem base rate of $728.31, yielding a proposed Federal per
diem base rate of $745.19 for FY 2016. Similarly, we are proposing to
apply the 1.9 percent payment update and the 1.0041 wage index budget-
neutrality factor to the FY 2015 ECT rate, yielding a proposed ECT rate
of $320.82 for FY 2016.
As noted above, section 1886(s)(4) of the Act requires the
establishment of a quality data reporting program for the IPF PPS
beginning in RY 2015. We refer readers to section V. of this proposed
rule for a discussion of the IPF Quality Reporting Program. Section
1886(s)(4)(A)(i) of the Act requires that, for RY 2014 and each
subsequent rate year, the Secretary shall reduce any annual update to a
standard Federal rate for discharges occurring during the rate year by
2.0 percentage points for any IPF that does not comply with the quality
data submission requirements with respect to an applicable year.
Therefore, we are proposing to apply a 2.0 percentage point reduction
to the Federal per diem base rate and the ECT rate as follows:
For IPFs that failed to submit quality reporting data under the
IPFQR program, we would apply a -0.1 percent annual update (that is,
1.9 percent reduced by 2 percentage points, in accordance with section
1886(s)(4)(A)(ii) of the Act) and the wage index budget-neutrality
factor of 1.0041 to the FY 2015 Federal per diem base rate of $728.31,
yielding a Federal per diem base rate of $730.56 for FY 2016.
Similarly, we would apply the -0.1 percent annual update and the
1.0041 wage index budget-neutrality factor to the FY 2015 ECT rate of
$313.55, yielding an ECT rate of $314.52 for FY 2016.
C. Proposed Updates to the IPF PPS Patient-Level Adjustment Factors
1. Overview of the IPF PPS Adjustment Factors
The IPF PPS payment adjustments were derived from a regression
analysis of 100 percent of the FY 2002 MedPAR data file, which
contained 483,038 cases. For a more detailed description of the data
file used for the regression analysis, see the November 2004 IPF PPS
final rule (69 FR 66935 through 66936). While we have since used more
recent claims data to simulate payments to set the fixed dollar loss
threshold amount for the outlier policy and to assess the impact of the
IPF PPS updates, we continue to use the regression-derived adjustment
factors established in 2005 for FY 2016.
2. IPF PPS Patient-Level Adjustments
The IPF PPS includes payment adjustments for the following patient-
level characteristics: Medicare Severity Diagnosis Related Groups (MS-
DRGs) assignment of the patient's principal diagnosis, selected
comorbidities, patient age, and the variable per diem adjustments.
a. MS-DRG Assignment
We believe it is important to maintain the same diagnostic coding
and DRG classification for IPFs that are used under the IPPS for
providing psychiatric care. For this reason, when the IPF PPS was
implemented for cost reporting periods beginning on or after January 1,
2005, we adopted the same diagnostic code set (ICD-9-CM) and DRG
patient classification system (that is, the CMS DRGs) that were
utilized at the time under the IPPS. In the May 2008 IPF PPS notice (73
FR 25709), we discussed CMS's effort to better recognize resource use
and the severity of illness among patients. CMS adopted the new MS-DRGs
for the IPPS in the FY 2008 IPPS final rule with comment period (72 FR
47130). In the 2008 IPF PPS notice (73 FR 25716), we provided a
crosswalk to reflect changes that were made under the IPF PPS to adopt
the new MS-DRGs. For a detailed description of the mapping changes from
the original DRG adjustment categories to the current MS-DRG adjustment
categories, we refer readers to the May 2008 IPF PPS notice (73 FR
25714).
The IPF PPS includes payment adjustments for designated psychiatric
DRGs assigned to the claim based on the patient's principal diagnosis.
The DRG adjustment factors were expressed relative to the most
frequently reported psychiatric DRG in FY 2002, that is, DRG 430
(psychoses). The coefficient values and adjustment factors were derived
from the regression analysis. Mapping the DRGs to the MS-DRGs resulted
in the current 17 IPF-MS-DRGs, instead of the original 15 DRGs, for
which the IPF PPS provides an adjustment.
For the FY 2016 update, we are not proposing any changes to the IPF
MS-DRG adjustment factors. In FY 2015 rulemaking (79 FR 45945 through
45947), we proposed and finalized conversions of the ICD-9-CM-based MS-
DRGs to ICD-10-CM/PCS-based MS-DRGs, which will be implemented on
October 1, 2015. Further information for the ICD-10-CM/PCS MS-DRG
conversion project can be found on the
[[Page 25035]]
CMS ICD-10-CM Web site at https://www.cms.hhs.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html.
For FY 2016, we propose to continue to make a payment adjustment
for psychiatric diagnoses that group to one of the existing 17 MS-IPF-
DRGs listed in the Addendum. Psychiatric principal diagnoses that do
not group to one of the 17 designated DRGs would still receive the
Federal per diem base rate and all other applicable adjustments, but
the payment would not include a DRG adjustment.
As noted above, the diagnoses for each IPF MS-DRG will be updated
on October 1, 2015, using the ICD-10-CM/PCS code sets.
b. Payment for Comorbid Conditions
The intent of the comorbidity adjustments is to recognize the
increased costs associated with comorbid conditions by providing
additional payments for certain concurrent medical or psychiatric
conditions that are expensive to treat. In the May 2011 IPF PPS final
rule (76 FR 26451 through 26452), we explained that the IPF PPS
includes 17 comorbidity categories and identified the new, revised, and
deleted ICD-9-CM diagnosis codes that generate a comorbid condition
payment adjustment under the IPF PPS for RY 2012 (76 FR 26451).
Comorbidities are specific patient conditions that are secondary to
the patient's principal diagnosis and that require treatment during the
stay. Diagnoses that relate to an earlier episode of care and have no
bearing on the current hospital stay are excluded and must not be
reported on IPF claims. Comorbid conditions must exist at the time of
admission or develop subsequently, and affect the treatment received,
length of stay (LOS), or both treatment and LOS.
For each claim, an IPF may receive only one comorbidity adjustment
within a comorbidity category, but it may receive an adjustment for
more than one comorbidity category. Current billing instructions for
claims for discharges on or after October 1, 2015 require IPFs to enter
the complete ICD-10-CM codes for up to 24 additional diagnoses if they
co-exist at the time of admission, or develop subsequently and impact
the treatment provided.
The comorbidity adjustments were determined based on the regression
analysis using the diagnoses reported by IPFs in FY 2002. The principal
diagnoses were used to establish the DRG adjustments and were not
accounted for in establishing the comorbidity category adjustments,
except where ICD-9-CM ``code first'' instructions apply. As we
explained in the May 2011 IPF PPS final rule (76 FR 265451), the ``code
first'' rule applies when a condition has both an underlying etiology
and a manifestation due to the underlying etiology. For these
conditions, ICD-9-CM has a coding convention that requires the
underlying conditions to be sequenced first followed by the
manifestation. Whenever a combination exists, there is a ``use
additional code'' note at the etiology code and a ``code first'' note
at the manifestation code.
The same principle holds for ICD-10-CM as for ICD-9-CM. Whenever a
combination exists, there is a ``use additional code'' note in the ICD-
10-CM codebook pertaining to the etiology code, and a ``code first''
code pertaining to the manifestation code. In the FY 2015 IPF PPS final
rule, we provided a ``code first'' table for reference that highlights
the same or similar manifestation codes where the ``code first''
instructions apply in ICD-10-CM that were present in ICD-9-CM (79 FR
46009).
As noted previously, it is our policy to maintain the same
diagnostic coding set for IPFs that is used under the IPPS for
providing the same psychiatric care. The 17 comorbidity categories
formerly defined using ICD-9-CM codes were converted to ICD-10-CM/PCS
in the FY 2015 IPF PPS final rule (79 FR 45947 to 45955). The goal for
converting the comorbidity categories is referred to as replication,
meaning that the payment adjustment for a given patient encounter is
the same after ICD-10-CM implementation as it would be if the same
record had been coded in ICD-9-CM and submitted prior to ICD-10-CM/PCS
implementation on October 1, 2015. All conversion efforts were made
with the intent of achieving this goal.
We are not proposing any refinements to the comorbidity adjustments
at this time, and propose to continue to use the existing adjustments
in effect in FY 2015. The FY 2016 comorbidity adjustments are found in
the Addendum to this proposed rule.
3. Patient Age Adjustments
As explained in the November 2004 IPF PPS final rule (69 FR 66922),
we analyzed the impact of age on per diem cost by examining the age
variable (that is, the range of ages) for payment adjustments. In
general, we found that the cost per day increases with age. The older
age groups are more costly than the under 45 age group, the differences
in per diem cost increase for each successive age group, and the
differences are statistically significant.
For FY 2016, we are proposing to continue to use the patient age
adjustments currently in effect in FY 2015, as shown in the Addendum to
this proposed rule.
4. Variable Per Diem Adjustments
We explained in the November 2004 IPF PPS final rule (69 FR 66946)
that the regression analysis indicated that per diem cost declines as
the LOS increases. The variable per diem adjustments to the Federal per
diem base rate account for ancillary and administrative costs that
occur disproportionately in the first days after admission to an IPF.
We used a regression analysis to estimate the average differences
in per diem cost among stays of different lengths. As a result of this
analysis, we established variable per diem adjustments that begin on
day 1 and decline gradually until day 21 of a patient's stay. For day
22 and thereafter, the variable per diem adjustment remains the same
each day for the remainder of the stay. However, the adjustment applied
to day 1 depends upon whether the IPF has a qualifying emergency
department (ED). If an IPF has a qualifying ED, it receives a 1.31
adjustment factor for day 1 of each stay. If an IPF does not have a
qualifying ED, it receives a 1.19 adjustment factor for day 1 of the
stay. The ED adjustment is explained in more detail in section III.D.4.
of this proposed rule.
For FY 2016, we propose to continue to use the variable per diem
adjustment factors currently in effect as shown in the Addendum to this
proposed rule. A complete discussion of the variable per diem
adjustments appears in the November 2004 IPF PPS final rule (69 FR
66946).
D. Proposed Updates to the IPF PPS Facility-Level Adjustments
The IPF PPS includes facility-level adjustments for the wage index,
IPFs located in rural areas, teaching IPFs, cost of living adjustments
for IPFs located in Alaska and Hawaii, and IPFs with a qualifying ED.
1. Proposed Wage Index Adjustment
a. Background
As discussed in the May 2006 IPF PPS final rule (71 FR 27061) and
in the May 2008 (73 FR 25719) and May 2009 IPF PPS notices (74 FR
20373), in order to provide an adjustment for geographic wage levels,
the labor-related portion of an IPF's payment is adjusted using an
appropriate wage index. Currently, an IPF's geographic wage index value
is determined based on the actual location
[[Page 25036]]
of the IPF in an urban or rural area as defined in Sec.
412.64(b)(1)(ii)(A) and (C).
b. Proposed Wage Index for FY 2016
Since the inception of the IPF PPS, we have used the pre-floor,
pre-reclassified acute care hospital wage index in developing a wage
index to be applied to IPFs because there is not an IPF-specific wage
index available. We believe that IPFs generally compete in the same
labor markets as acute care hospitals, so the pre-floor, pre-
reclassified hospital wage index should reflect IPF labor costs. As
discussed in the May 2006 IPF PPS final rule for FY 2007 (71 FR 27061
through 27067), under the IPF PPS, the wage index is calculated using
the IPPS wage index for the labor market area in which the IPF is
located, without taking into account geographic reclassifications,
floors, and other adjustments made to the wage index under the IPPS.
For a complete description of these IPPS wage index adjustments, please
see the CY 2013 IPPS/LTCH PPS final rule (77 FR 53365 through 53374).
For FY 2016, we are proposing to continue to apply the most recent
hospital wage index (that is, the FY 2015 pre-floor, pre-reclassified
hospital wage index, which is the most appropriate index as it best
reflects the variation in local labor costs of IPFs in the various
geographic areas) using the most recent hospital wage data (that is,
data from hospital cost reports for the cost reporting period beginning
during FY 2011) without any geographic reclassifications, floors, or
other adjustments. We propose to apply the FY 2016 IPF PPS wage index
to payments beginning October 1, 2015.
We apply the wage index adjustment to the labor-related portion of
the Federal rate, which we are proposing to change from 69.294 percent
to 74.9 percent in FY 2016. This percentage reflects the labor-related
relative importance of the FY 2012-based proposed IPF-specific market
basket for FY 2016 (see section III.A.6. of this proposed rule).
c. OMB Bulletins and Proposed Transitional Wage Index
OMB publishes bulletins regarding CBSA changes, including changes
to CBSA numbers and titles. In the May 2006 IPF PPS final rule for RY
2007 (71 FR 27061 through 27067), we adopted the changes discussed in
the Office of Management and Budget (OMB) Bulletin No. 03-04 (June 6,
2003), which announced revised definitions for Metropolitan Statistical
Areas (MSAs), and the creation of Micropolitan Statistical Areas and
Combined Statistical Areas. In adopting the OMB CBSA geographic
designations in RY 2007, we did not provide a separate transition for
the CBSA-based wage index since the IPF PPS was already in a transition
period from TEFRA payments to PPS payments.
In the May 2008 IPF PPS notice, we incorporated the CBSA
nomenclature changes published in the most recent OMB bulletin that
applies to the hospital wage index used to determine the current IPF
PPS wage index and stated that we expect to continue to do the same for
all the OMB CBSA nomenclature changes in future IPF PPS rules and
notices, as necessary (73 FR 25721). The OMB bulletins may be accessed
online at https://www.whitehouse.gov/omb/bulletins_default/.
In accordance with our established methodology, we have
historically adopted any CBSA changes that are published in the OMB
bulletin that corresponds with the hospital wage index used to
determine the IPF PPS wage index. For the FY 2015 IPF wage index, we
used the FY 2014 pre-floor, pre-reclassified hospital wage index to
adjust the IPF PPS payments. On February 28, 2013, OMB issued OMB
Bulletin No. 13-01, which established revised delineations for
Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas, and provided guidance on the use of the
delineations of these statistical areas. A copy of this bulletin may be
obtained at https://www.whitehouse.gov/omb/bulletins_default/. Because
the FY 2014 pre-floor, pre-reclassified hospital wage index was
finalized prior to the issuance of this Bulletin, the FY 2015 IPF PPS
wage index, which was based on the FY 2014 pre-floor, pre-reclassified
hospital wage index, did not reflect OMB's new area delineations based
on the 2010 Census. According to OMB, ``[t]his bulletin provides the
delineations of all Metropolitan Statistical Areas, Metropolitan
Divisions, Micropolitan Statistical Areas, Combined Statistical Areas,
and New England City and Town Areas in the United States and Puerto
Rico based on the standards published on June 28, 2010, in the Federal
Register (75 FR 37246 through 37252) and Census Bureau data.'' These
OMB Bulletin changes are reflected in the FY 2015 pre-floor, pre-
reclassified hospital wage index, upon which the FY 2016 IPPS PPS wage
index is based. We propose to adopt these new OMB CBSA delineations in
the FY 2016 proposed IPF PPS wage index.
We believe that the most current CBSA delineations accurately
reflect the local economies and wage levels of the areas where IPFs are
located, and we believe that it is important for the IPF PPS to use the
latest CBSA delineations available in order to maintain an up-to-date
payment system that accurately reflects the reality of population
shifts and labor market conditions.
In proposing adoption of these changes for the IPF PPS, it is
necessary to identify the new labor market area delineation for each
county and facility in the country. For example, there would be new
CBSAs, urban counties that would become rural, rural counties that
would become urban, and existing CBSAs that would be split apart.
Because the wage index of urban areas is typically higher than that of
rural areas, IPF facilities currently located in rural counties that
would become urban, beginning October 1, 2015, would generally
experience an increase in their wage index values. We identified 105
counties and 37 IPFs that would move from rural to urban status due to
the new CBSA delineations beginning in FY 2016, shown in Table 15.
Table 15--FY 2016 Rural To Urban CBSA Crosswalk
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2014 CBSA Delineations/FY 2015 data FY 2015 CBSA Delineations/FY 2015 data Change in
County name ----------------------------------------------------------------------------------------------------- value
CBSA Urban/Rural Wage index CBSA Urban/Rural Wage index (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baldwin County, Alabama............... 1 RURAL.................. 0.6963 19300 URBAN................. 0.7248 4.09
Pickens County, Alabama............... 1 RURAL.................. 0.6963 46220 URBAN................. 0.8337 19.73
Cochise County, Arizona............... 3 RURAL.................. 0.9125 43420 URBAN................. 0.8937 -2.06
Little River County, Arkansas......... 4 RURAL.................. 0.7311 45500 URBAN................. 0.7362 0.70
Windham County, Connecticut........... 7 RURAL.................. 1.1251 49340 URBAN................. 1.1493 2.15
Sussex County, Delaware............... 8 RURAL.................. 1.0261 41540 URBAN................. 0.9289 -9.47
[[Page 25037]]
Citrus County, Florida................ 10 RURAL.................. 0.8006 26140 URBAN................. 0.7625 -4.76
Gulf County, Florida.................. 10 RURAL.................. 0.8006 37460 URBAN................. 0.7906 -1.25
Highlands County, Florida............. 10 RURAL.................. 0.8006 42700 URBAN................. 0.7982 -0.30
Sumter County, Florida................ 10 RURAL.................. 0.8006 45540 URBAN................. 0.8095 1.11
Walton County, Florida................ 10 RURAL.................. 0.8006 18880 URBAN................. 0.8156 1.87
Lincoln County, Georgia............... 11 RURAL.................. 0.7425 12260 URBAN................. 0.9225 24.24
Morgan County, Georgia................ 11 RURAL.................. 0.7425 12060 URBAN................. 0.9369 26.18
Peach County, Georgia................. 11 RURAL.................. 0.7425 47580 URBAN................. 0.7542 1.58
Pulaski County, Georgia............... 11 RURAL.................. 0.7425 47580 URBAN................. 0.7542 1.58
Kalawao County, Hawaii................ 12 RURAL.................. 1.0741 27980 URBAN................. 1.0561 -1.68
Maui County, Hawaii................... 12 RURAL.................. 1.0741 27980 URBAN................. 1.0561 -1.68
Butte County, Idaho................... 13 RURAL.................. 0.7398 26820 URBAN................. 0.8933 20.75
De Witt County, Illinois.............. 14 RURAL.................. 0.8362 14010 URBAN................. 0.9165 9.60
Jackson County, Illinois.............. 14 RURAL.................. 0.8362 16060 URBAN................. 0.8324 -0.45
Williamson County, Illinois........... 14 RURAL.................. 0.8362 16060 URBAN................. 0.8324 -0.45
Scott County, Indiana................. 15 RURAL.................. 0.8416 31140 URBAN................. 0.8605 2.25
Union County, Indiana................. 15 RURAL.................. 0.8416 17140 URBAN................. 0.9473 12.56
Plymouth County, Iowa................. 16 RURAL.................. 0.8451 43580 URBAN................. 0.8915 5.49
Kingman County, Kansas................ 17 RURAL.................. 0.7806 48620 URBAN................. 0.8472 8.53
Allen County, Kentucky................ 18 RURAL.................. 0.7744 14540 URBAN................. 0.8410 8.60
Butler County, Kentucky............... 18 RURAL.................. 0.7744 14540 URBAN................. 0.8410 8.60
Acadia Parish, Louisiana.............. 19 RURAL.................. 0.7580 29180 URBAN................. 0.7869 3.81
Iberia Parish, Louisiana.............. 19 RURAL.................. 0.7580 29180 URBAN................. 0.7869 3.81
St. James Parish, Louisiana........... 19 RURAL.................. 0.7580 35380 URBAN................. 0.8821 16.37
Tangipahoa Parish, Louisiana.......... 19 RURAL.................. 0.7580 25220 URBAN................. 0.9452 24.70
Vermilion Parish, Louisiana........... 19 RURAL.................. 0.7580 29180 URBAN................. 0.7869 3.81
Webster Parish, Louisiana............. 19 RURAL.................. 0.7580 43340 URBAN................. 0.8325 9.83
St. Marys County, Maryland............ 21 RURAL.................. 0.8554 15680 URBAN................. 0.8593 0.46
Worcester County, Maryland............ 21 RURAL.................. 0.8554 41540 URBAN................. 0.9289 8.59
Midland County, Michigan.............. 23 RURAL.................. 0.8207 33220 URBAN................. 0.7935 -3.31
Montcalm County, Michigan............. 23 RURAL.................. 0.8207 24340 URBAN................. 0.8799 7.21
Fillmore County, Minnesota............ 24 RURAL.................. 0.9124 40340 URBAN................. 1.1398 24.92
Le Sueur County, Minnesota............ 24 RURAL.................. 0.9124 33460 URBAN................. 1.1196 22.71
Mille Lacs County, Minnesota.......... 24 RURAL.................. 0.9124 33460 URBAN................. 1.1196 22.71
Sibley County, Minnesota.............. 24 RURAL.................. 0.9124 33460 URBAN................. 1.1196 22.71
Benton County, Mississippi............ 25 RURAL.................. 0.7589 32820 URBAN................. 0.8991 18.47
Yazoo County, Mississippi............. 25 RURAL.................. 0.7589 27140 URBAN................. 0.7891 3.98
Golden Valley County, Montana......... 27 RURAL.................. 0.9024 13740 URBAN................. 0.8686 -3.75
Hall County, Nebraska................. 28 RURAL.................. 0.8924 24260 URBAN................. 0.9219 3.31
Hamilton County, Nebraska............. 28 RURAL.................. 0.8924 24260 URBAN................. 0.9219 3.31
Howard County, Nebraska............... 28 RURAL.................. 0.8924 24260 URBAN................. 0.9219 3.31
Merrick County, Nebraska.............. 28 RURAL.................. 0.8924 24260 URBAN................. 0.9219 3.31
Jefferson County, New York............ 33 RURAL.................. 0.8208 48060 URBAN................. 0.8386 2.17
Yates County, New York................ 33 RURAL.................. 0.8208 40380 URBAN................. 0.8750 6.60
Craven County, North Carolina......... 34 RURAL.................. 0.7995 35100 URBAN................. 0.8994 12.50
Davidson County, North Carolina....... 34 RURAL.................. 0.7995 49180 URBAN................. 0.8679 8.56
Gates County, North Carolina.......... 34 RURAL.................. 0.7995 47260 URBAN................. 0.9223 15.36
Iredell County, North Carolina........ 34 RURAL.................. 0.7995 16740 URBAN................. 0.9073 13.48
Jones County, North Carolina.......... 34 RURAL.................. 0.7995 35100 URBAN................. 0.8994 12.50
Lincoln County, North Carolina........ 34 RURAL.................. 0.7995 16740 URBAN................. 0.9073 13.48
Pamlico County, North Carolina........ 34 RURAL.................. 0.7995 35100 URBAN................. 0.8994 12.50
Rowan County, North Carolina.......... 34 RURAL.................. 0.7995 16740 URBAN................. 0.9073 13.48
Oliver County, North Dakota........... 35 RURAL.................. 0.7099 13900 URBAN................. 0.7216 1.65
Sioux County, North Dakota............ 35 RURAL.................. 0.7099 13900 URBAN................. 0.7216 1.65
Hocking County, Ohio.................. 36 RURAL.................. 0.8329 18140 URBAN................. 0.9539 14.53
Perry County, Ohio.................... 36 RURAL.................. 0.8329 18140 URBAN................. 0.9539 14.53
Cotton County, Oklahoma............... 37 RURAL.................. 0.7799 30020 URBAN................. 0.7918 1.53
Josephine County, Oregon.............. 38 RURAL.................. 1.0083 24420 URBAN................. 1.0086 0.03
Linn County, Oregon................... 38 RURAL.................. 1.0083 10540 URBAN................. 1.0879 7.89
Adams County, Pennsylvania............ 39 RURAL.................. 0.8719 23900 URBAN................. 1.0104 15.88
Columbia County, Pennsylvania......... 39 RURAL.................. 0.8719 14100 URBAN................. 0.9347 7.20
Franklin County, Pennsylvania......... 39 RURAL.................. 0.8719 16540 URBAN................. 1.0957 25.67
Monroe County, Pennsylvania........... 39 RURAL.................. 0.8719 20700 URBAN................. 0.9372 7.49
Montour County, Pennsylvania.......... 39 RURAL.................. 0.8719 14100 URBAN................. 0.9347 7.20
Utuado Municipio, Puerto Rico......... 40 RURAL.................. 0.4047 10380 URBAN................. 0.3586 -11.39
Beaufort County, South Carolina....... 42 RURAL.................. 0.8374 25940 URBAN................. 0.8708 3.99
Chester County, South Carolina........ 42 RURAL.................. 0.8374 16740 URBAN................. 0.9073 8.35
Jasper County, South Carolina......... 42 RURAL.................. 0.8374 25940 URBAN................. 0.8708 3.99
[[Page 25038]]
Lancaster County, South Carolina...... 42 RURAL.................. 0.8374 16740 URBAN................. 0.9073 8.35
Union County, South Carolina.......... 42 RURAL.................. 0.8374 43900 URBAN................. 0.8277 -1.16
Custer County, South Dakota........... 43 RURAL.................. 0.8312 39660 URBAN................. 0.8989 8.14
Campbell County, Tennessee............ 44 RURAL.................. 0.7365 28940 URBAN................. 0.7015 -4.75
Crockett County, Tennessee............ 44 RURAL.................. 0.7365 27180 URBAN................. 0.7747 5.19
Maury County, Tennessee............... 44 RURAL.................. 0.7365 34980 URBAN................. 0.8969 21.78
Morgan County, Tennessee.............. 44 RURAL.................. 0.7365 28940 URBAN................. 0.7015 -4.75
Roane County, Tennessee............... 44 RURAL.................. 0.7365 28940 URBAN................. 0.7015 -4.75
Falls County, Texas................... 45 RURAL.................. 0.7855 47380 URBAN................. 0.8137 3.59
Hood County, Texas.................... 45 RURAL.................. 0.7855 23104 URBAN................. 0.9386 19.49
Hudspeth County, Texas................ 45 RURAL.................. 0.7855 21340 URBAN................. 0.8139 3.62
Lynn County, Texas.................... 45 RURAL.................. 0.7855 31180 URBAN................. 0.8830 12.41
Martin County, Texas.................. 45 RURAL.................. 0.7855 33260 URBAN................. 0.8940 13.81
Newton County, Texas.................. 45 RURAL.................. 0.7855 13140 URBAN................. 0.8508 8.31
Oldham County, Texas.................. 45 RURAL.................. 0.7855 11100 URBAN................. 0.8277 5.37
Somervell County, Texas............... 45 RURAL.................. 0.7855 23104 URBAN................. 0.9386 19.49
Box Elder County, Utah................ 46 RURAL.................. 0.8891 36260 URBAN................. 0.9225 3.76
Augusta County, Virginia.............. 49 RURAL.................. 0.7674 44420 URBAN................. 0.8326 8.50
Buckingham County, Virginia........... 49 RURAL.................. 0.7674 16820 URBAN................. 0.9053 17.97
Culpeper County, Virginia............. 49 RURAL.................. 0.7674 47894 URBAN................. 1.0403 35.56
Floyd County, Virginia................ 49 RURAL.................. 0.7674 13980 URBAN................. 0.8473 10.41
Rappahannock County, Virginia......... 49 RURAL.................. 0.7674 47894 URBAN................. 1.0403 35.56
Staunton City County, Virginia........ 49 RURAL.................. 0.7674 44420 URBAN................. 0.8326 8.50
Waynesboro City County, Virginia...... 49 RURAL.................. 0.7674 44420 URBAN................. 0.8326 8.50
Columbia County, Washington........... 50 RURAL.................. 1.0892 47460 URBAN................. 1.0934 0.39
Pend Oreille County, Washington....... 50 RURAL.................. 1.0892 44060 URBAN................. 1.1425 4.89
Stevens County, Washington............ 50 RURAL.................. 1.0892 44060 URBAN................. 1.1425 4.89
Walla Walla County, Washington........ 50 RURAL.................. 1.0892 47460 URBAN................. 1.0934 0.39
Fayette County, West Virginia......... 51 RURAL.................. 0.7410 13220 URBAN................. 0.8024 8.29
Raleigh County, West Virginia......... 51 RURAL.................. 0.7410 13220 URBAN................. 0.8024 8.29
Green County, Wisconsin............... 52 RURAL.................. 0.9041 31540 URBAN................. 1.1130 23.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
The wage index values of rural areas are typically lower than that
of urban areas. Therefore, IPFs located in a county that is currently
designated as urban under the IPF PPS wage index that would become
rural when we would adopt the new CBSA delineations may experience a
decrease in their wage index values. We identified 37 counties and 3
IPFs that would move from urban to rural status due to the new CBSA
delineations beginning in FY 2016. Table 16 shows the CBSA delineations
and the urban wage index values for FY 2015 based on existing CBSA
delineations, compared with the proposed CBSA delineations and wage
index values for FY 2016 based on the new OMB CBSA delineations. Table
16 also shows the percentage change in these values for those counties
that would change from urban to rural, beginning in FY 2016, when we
would adopt the new CBSA delineations.
Table 16--FY 2016 Urban to Rural CBSA Crosswalk
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2014 CBSA Delineations/FY 2015 data FY 2015 CBSA Delineations/FY 2015 data Change in
County name ----------------------------------------------------------------------------------------------------- value
CBSA Urban/Rural Wage index CBSA Urban/Rural Wage index (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Greene County, Alabama................ 46220 URBAN.................. 0.8387 1 RURAL................. 0.6914 -17.56
Franklin County, Arkansas............. 22900 URBAN.................. 0.7593 4 RURAL................. 0.7311 -3.71
Power County, Idaho................... 38540 URBAN.................. 0.9672 13 RURAL................. 0.7398 -23.51
Franklin County, Indiana.............. 17140 URBAN.................. 0.9473 15 RURAL................. 0.8416 -11.16
Gibson County, Indiana................ 21780 URBAN.................. 0.8537 15 RURAL................. 0.8416 -1.42
Greene County, Indiana................ 14020 URBAN.................. 0.9062 15 RURAL................. 0.8416 -7.13
Tipton County, Indiana................ 29020 URBAN.................. 0.8990 15 RURAL................. 0.8416 -6.38
Franklin County, Kansas............... 28140 URBAN.................. 0.9419 17 RURAL................. 0.7779 -17.41
Geary County, Kansas.................. 31740 URBAN.................. 0.8406 17 RURAL................. 0.7779 -7.46
Nelson County, Kentucky............... 31140 URBAN.................. 0.8593 18 RURAL................. 0.7748 -9.83
Webster County, Kentucky.............. 21780 URBAN.................. 0.8537 18 RURAL................. 0.7748 -9.24
Franklin County, Massachusetts........ 44140 URBAN.................. 1.0271 22 RURAL................. 1.1553 12.48
Ionia County, Michigan................ 24340 URBAN.................. 0.8965 23 RURAL................. 0.8288 -7.55
Newaygo County, Michigan.............. 24340 URBAN.................. 0.8965 23 RURAL................. 0.8288 -7.55
George County, Mississippi............ 37700 URBAN.................. 0.7396 25 RURAL................. 0.7570 2.35
Stone County, Mississippi............. 25060 URBAN.................. 0.8179 25 RURAL................. 0.7570 -7.45
[[Page 25039]]
Crawford County, Missouri............. 41180 URBAN.................. 0.9366 26 RURAL................. 0.7725 -17.52
Howard County, Missouri............... 17860 URBAN.................. 0.8319 26 RURAL................. 0.7725 -7.14
Washington County, Missouri........... 41180 URBAN.................. 0.9366 26 RURAL................. 0.7725 -17.52
Anson County, North Carolina.......... 16740 URBAN.................. 0.9230 34 RURAL................. 0.7899 -14.42
Greene County, North Carolina......... 24780 URBAN.................. 0.9371 34 RURAL................. 0.7899 -15.71
Erie County, Ohio..................... 41780 URBAN.................. 0.7784 36 RURAL................. 0.8348 7.25
Ottawa County, Ohio................... 45780 URBAN.................. 0.9129 36 RURAL................. 0.8348 -8.56
Preble County, Ohio................... 19380 URBAN.................. 0.8938 36 RURAL................. 0.8348 -6.60
Washington County, Ohio............... 37620 URBAN.................. 0.8186 36 RURAL................. 0.8348 1.98
Stewart County, Tennessee............. 17300 URBAN.................. 0.7526 44 RURAL................. 0.7277 -3.31
Calhoun County, Texas................. 47020 URBAN.................. 0.8473 45 RURAL................. 0.7847 -7.39
Delta County, Texas................... 19124 URBAN.................. 0.9703 45 RURAL................. 0.7847 -19.13
San Jacinto County, Texas............. 26420 URBAN.................. 0.9734 45 RURAL................. 0.7847 -19.39
Summit County, Utah................... 41620 URBAN.................. 0.9512 46 RURAL................. 0.9005 -5.33
Cumberland County, Virginia........... 40060 URBAN.................. 0.9625 49 RURAL................. 0.7554 -21.52
Danville City County, Virginia........ 19260 URBAN.................. 0.7963 49 RURAL................. 0.7554 -5.14
King And Queen County, Virginia....... 40060 URBAN.................. 0.9625 49 RURAL................. 0.7554 -21.52
Louisa County, Virginia............... 40060 URBAN.................. 0.9625 49 RURAL................. 0.7554 -21.52
Pittsylvania County, Virginia......... 19260 URBAN.................. 0.7963 49 RURAL................. 0.7554 -5.14
Surry County, Virginia................ 47260 URBAN.................. 0.9223 49 RURAL................. 0.7554 -18.10
Morgan County, West Virginia.......... 25180 URBAN.................. 0.9080 51 RURAL................. 0.7274 -19.89
Pleasants County, West Virginia....... 37620 URBAN.................. 0.8186 51 RURAL................. 0.7274 -11.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
We note that IPFs in some urban CBSAs would experience a change in
their wage index values even though they remain urban because an urban
CBSA's boundaries and/or the counties included in that CBSA could
change. Table 17 shows those counties that would experience a change in
their wage index value in FY 2016 due to the new OMB CBSAs. Table 17
shows the urban CBSA delineations and wage index values for FY 2015
based on existing CBSA delineations, compared with the urban CBSA
delineations and wage index values for FY 2016 based on the new OMB
delineations, and the percentage change in these values, for counties
that would remain urban even though the CBSA boundaries and/or counties
included in that CBSA would change.
Table 17--FY 2015 Urban to a Different FY 2016 Urban CBSA Crosswalk
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2014 CBSA Delineations/FY 2015 data FY 2015 CBSA Delineations/FY 2015 data Change in
County name ----------------------------------------------------------------------------------------------------- value
CBSA Urban/Rural Wage index CBSA Urban/Rural Wage index (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Flagler County, Florida............... 37380 URBAN.................. 0.8462 19660 URBAN................. 0.8376 -1.02
De Kalb County, Illinois.............. 16974 URBAN.................. 1.0412 20994 URBAN................. 1.0299 -1.09
Kane County, Illinois................. 16974 URBAN.................. 1.0412 20994 URBAN................. 1.0299 -1.09
Madison County, Indiana............... 11300 URBAN.................. 1.0078 26900 URBAN................. 1.0133 0.55
Meade County, Kentucky................ 31140 URBAN.................. 0.8593 21060 URBAN................. 0.7701 -10.38
Essex County, Massachusetts........... 37764 URBAN.................. 1.0769 15764 URBAN................. 1.1159 3.62
Ottawa County, Michigan............... 26100 URBAN.................. 0.8136 24340 URBAN................. 0.8799 8.15
Jackson County, Mississippi........... 37700 URBAN.................. 0.7396 25060 URBAN................. 0.7896 6.76
Bergen County, New Jersey............. 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Hudson County, New Jersey............. 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Middlesex County, New Jersey.......... 20764 URBAN.................. 1.0989 35614 URBAN................. 1.2837 16.82
Monmouth County, New Jersey........... 20764 URBAN.................. 1.0989 35614 URBAN................. 1.2837 16.82
Ocean County, New Jersey.............. 20764 URBAN.................. 1.0989 35614 URBAN................. 1.2837 16.82
Passaic County, New Jersey............ 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Somerset County, New Jersey........... 20764 URBAN.................. 1.0989 35084 URBAN................. 1.1233 2.22
Bronx County, New York................ 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Dutchess County, New York............. 39100 URBAN.................. 1.1533 20524 URBAN................. 1.1345 -1.63
Kings County, New York................ 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
New York County, New York............. 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Orange County, New York............... 39100 URBAN.................. 1.1533 35614 URBAN................. 1.2837 11.31
Putnam County, New York............... 35644 URBAN.................. 1.3110 20524 URBAN................. 1.1345 -13.46
Queens County, New York............... 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Richmond County, New York............. 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Rockland County, New York............. 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Westchester County, New York.......... 35644 URBAN.................. 1.3110 35614 URBAN................. 1.2837 -2.08
Brunswick County, North Carolina...... 48900 URBAN.................. 0.8867 34820 URBAN................. 0.8620 -2.79
Bucks County, Pennsylvania............ 37964 URBAN.................. 1.0837 33874 URBAN................. 1.0157 -6.27
[[Page 25040]]
Chester County, Pennsylvania.......... 37964 URBAN.................. 1.0837 33874 URBAN................. 1.0157 -6.27
Montgomery County, Pennsylvania....... 37964 URBAN.................. 1.0837 33874 URBAN................. 1.0157 -6.27
Arecibo Municipio, Puerto Rico........ 41980 URBAN.................. 0.4449 11640 URBAN................. 0.4213 -5.30
Camuy Municipio, Puerto Rico.......... 41980 URBAN.................. 0.4449 11640 URBAN................. 0.4213 -5.30
Ceiba Municipio, Puerto Rico.......... 21940 URBAN.................. 0.3669 41980 URBAN................. 0.4438 20.96
Fajardo Municipio, Puerto Rico........ 21940 URBAN.................. 0.3669 41980 URBAN................. 0.4438 20.96
Guanica Municipio, Puerto Rico........ 49500 URBAN.................. 0.3375 38660 URBAN................. 0.4154 23.08
Guayanilla Municipio, Puerto Rico..... 49500 URBAN.................. 0.3375 38660 URBAN................. 0.4154 23.08
Hatillo Municipio, Puerto Rico........ 41980 URBAN.................. 0.4449 11640 URBAN................. 0.4213 -5.30
Luquillo Municipio, Puerto Rico....... 21940 URBAN.................. 0.3669 41980 URBAN................. 0.4438 20.96
Penuelas Municipio, Puerto Rico....... 49500 URBAN.................. 0.3375 38660 URBAN................. 0.4154 23.08
Quebradillas Municipio, Puerto Rico... 41980 URBAN.................. 0.4449 11640 URBAN................. 0.4213 -5.30
Yauco Municipio, Puerto Rico.......... 49500 URBAN.................. 0.3375 38660 URBAN................. 0.4154 23.08
Anderson County, South Carolina....... 11340 URBAN.................. 0.8744 24860 URBAN................. 0.9161 4.77
Grainger County, Tennessee............ 34100 URBAN.................. 0.6983 28940 URBAN................. 0.7015 0.46
Lincoln County, West Virginia......... 16620 URBAN.................. 0.7988 26580 URBAN................. 0.8846 10.74
Putnam County, West Virginia.......... 16620 URBAN.................. 0.7988 26580 URBAN................. 0.8846 10.74
--------------------------------------------------------------------------------------------------------------------------------------------------------
Likewise, IPFs currently located in a rural area may remain rural
under the new CBSA delineations but experience a change in their rural
wage index value due to implementation of the new CBSA delineations.
Table 18 shows the FY 2015 CBSA delineations and rural statewide wage
index values, compared with the FY 2016 CBSA delineations and rural
statewide wage index values, and the percentage change in these values,
for those rural areas that would change.
Table 18--FY 2016 Changes to the Statewide Rural Wage Index Crosswalk
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2014 CBSA Delineations/ FY 2015 data FY 2015 CBSA Delineations/ FY 2015 data Change in
County name ----------------------------------------------------------------------------------------------------- value
CBSA Urban/Rural Wage index CBSA Urban/Rural Wage index (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ALABAMA............................... 1 RURAL.................. 0.6963 1 RURAL................. 0.6914 -0.70
ARIZONA............................... 3 RURAL.................. 0.9125 3 RURAL................. 0.9219 1.03
CONNECTICUT........................... 7 RURAL.................. 1.1251 7 RURAL................. 1.1295 0.39
FLORIDA............................... 10 RURAL.................. 0.8006 10 RURAL................. 0.8371 4.56
GEORGIA............................... 11 RURAL.................. 0.7425 11 RURAL................. 0.7439 0.19
HAWAII................................ 12 RURAL.................. 1.0741 12 RURAL................. 1.0872 1.22
ILLINOIS.............................. 14 RURAL.................. 0.8362 14 RURAL................. 0.8369 0.08
KANSAS................................ 17 RURAL.................. 0.7806 17 RURAL................. 0.7779 -0.35
KENTUCKY.............................. 18 RURAL.................. 0.7744 18 RURAL................. 0.7748 0.05
LOUISIANA............................. 19 RURAL.................. 0.7580 19 RURAL................. 0.7108 -6.23
MARYLAND.............................. 21 RURAL.................. 0.8554 21 RURAL................. 0.8746 2.24
MASSACHUSETTS......................... 22 RURAL.................. 1.3920 22 RURAL................. 1.1553 -17.00
MICHIGAN.............................. 23 RURAL.................. 0.8207 23 RURAL................. 0.8288 0.99
MISSISSIPPI........................... 25 RURAL.................. 0.7589 25 RURAL................. 0.7570 -0.25
NEBRASKA.............................. 28 RURAL.................. 0.8924 28 RURAL................. 0.8877 -0.53
NEW YORK.............................. 33 RURAL.................. 0.8208 33 RURAL................. 0.8192 -0.19
NORTH CAROLINA........................ 34 RURAL.................. 0.7995 34 RURAL................. 0.7899 -1.20
OHIO.................................. 36 RURAL.................. 0.8329 36 RURAL................. 0.8348 0.23
OREGON................................ 38 RURAL.................. 1.0083 38 RURAL................. 0.9949 -1.33
PENNSYLVANIA.......................... 39 RURAL.................. 0.8719 39 RURAL................. 0.8083 -7.29
SOUTH CAROLINA........................ 42 RURAL.................. 0.8374 42 RURAL................. 0.8370 -0.05
TENNESSEE............................. 44 RURAL.................. 0.7365 44 RURAL................. 0.7277 -1.19
TEXAS................................. 45 RURAL.................. 0.7855 45 RURAL................. 0.7847 -0.10
UTAH.................................. 46 RURAL.................. 0.8891 46 RURAL................. 0.9005 1.28
VIRGINIA.............................. 49 RURAL.................. 0.7674 49 RURAL................. 0.7554 -1.56
WASHINGTON............................ 50 RURAL.................. 1.0892 50 RURAL................. 1.0877 -0.14
WEST VIRGINIA......................... 51 RURAL.................. 0.7410 51 RURAL................. 0.7274 -1.84
WISCONSIN............................. 52 RURAL.................. 0.9041 52 RURAL................. 0.9087 0.51
--------------------------------------------------------------------------------------------------------------------------------------------------------
While we believe that the new CBSA delineations would result in
wage index values that are more representative of the actual costs of
labor in a given area, we also recognize that use of the new CBSA
delineations would result in reduced payments to some IPFs and
increased payments to other IPFs, due to changes in wage index values.
[[Page 25041]]
Approximately 23.4 percent of IPFs would experience a decrease in wage
index values due to CBSA changes, while 12.4 percent of IPFs would
experience an increase in wage index values due to CBSA changes. The
remaining 64.1 percent of IPFs would experience no change in their wage
index values (these percentages do not sum to 100.0 percent due to
rounding). While the wage index CBSA changes would be implemented in a
budget-neutral fashion, the distributional effects of these CBSA
changes appear to affect rural IPFs in particular; column 5 in Table 26
in section VII. of this proposed rule shows that rural providers
overall are anticipated to experience payment reductions of 0.2
percent, with for-profit rural psychiatric hospitals anticipated to
experience the greatest reduction of 0.6 percent. We believe that it
would be appropriate to provide for a transition period to mitigate any
negative impacts on facilities that experience reduced payments as a
result of our adopting the new OMB CBSA delineations. Therefore, we
propose to implement these CBSA changes using a 1-year transition with
a blended wage index for all providers. For FY 2016, the wage index for
each provider would consist of a blend of 50 percent of the FY 2016 IPF
wage index using the current OMB delineations and 50 percent of the FY
2016 IPF wage index using the new OMB delineations. This results in an
average of the 2 values. We propose that the FY 2017 IPF PPS wage index
and subsequent IPF PPS wage indices would be based solely on the new
OMB CBSA delineations. We believe a 1-year transition strikes an
appropriate balance between ensuring that IPF PPS payments are as
accurate and stable as possible while giving IPFs time to adjust to the
new CBSA delineations. The proposed FY 2016 IPF PPS Transitional wage
index is located on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/IPFPPS/WageIndex.html.
d. Adjustment for Rural Location and Proposal to Phase Out the Rural
Adjustment for IPFs Losing Their Rural Adjustment Due to CBSA Changes
In the November 2004 IPF PPS final rule, we provided a 17 percent
payment adjustment for IPFs located in a rural area. This adjustment
was based on the regression analysis, which indicated that the per diem
cost of rural facilities was 17 percent higher than that of urban
facilities after accounting for the influence of the other variables
included in the regression. For FY 2016, we propose to continue to
apply a 17 percent payment adjustment for IPFs located in a rural area
as defined at Sec. 412.64(b)(1)(ii)(C). A complete discussion of the
adjustment for rural locations appears in the November 2004 IPF PPS
final rule (69 FR 66954).
As noted in section III.D.1.c. of this proposed rule, we are
proposing to adopt OMB updates to CBSA delineations. Adoption of the
updated CBSAs would change the status of 37 IPF providers currently
designated as ``rural'' to ``urban'' for FY 2016 and subsequent fiscal
years. As such, these 37 newly-urban providers would no longer receive
the 17 percent rural adjustment.
While 34 of these 37 rural IPFs that would be designated as urban
under the new CBSA delineations would experience an increase in their
wage index value, all 37 of these IPFs would lose the 17 percent rural
adjustment. Consistent with the transition policy adopted for Inpatient
Rehabilitation Facilities (IRFs) in FY 2006 (70 FR 47923 through
47927), we considered the appropriateness of applying a 3-year phase-
out of the rural adjustment for IPFs located in rural counties that
would become urban under the new OMB delineations, given the
potentially significant payment impacts for these IPFs. We believe that
a phase-out of the rural adjustment transition period for these 37 IPFs
specifically is appropriate because we expect these IPFs would
experience a steeper and more abrupt reduction in their payments
compared to other IPFs.
Therefore, in addition to the 2-year wage index transition policy
noted above, we are proposing a budget-neutral 3-year phase-out of the
rural adjustment for existing FY 2015 rural IPFs that would become
urban in FY 2016 and that experience a loss in payments due to changes
from the new CBSA delineations. Accordingly, the incremental steps
needed to reduce the impact of the loss of the FY 2015 rural adjustment
of 17 percent would be taken over FYs 2016, 2017 and 2018. This policy
would allow rural IPFs that would be classified as urban in FY 2016 to
receive two-thirds of the 2015 rural adjustment for FY 2016, as well as
the blended wage index. For FY 2017, these IPFs would receive the full
FY 2017 wage index and one-third of the FY 2015 rural adjustment. For
FY 2018, these IPFs would receive the full FY 2018 wage index without a
rural adjustment. We believe a 3-year budget-neutral phase-out of the
rural adjustment for IPFs that transition from rural to urban status
under the new CBSA delineations would best accomplish the goals of
mitigating the loss of the rural adjustment for existing FY 2015 rural
IPFs. The purpose of the gradual phase-out of the rural adjustment for
these providers is to alleviate the significant payment implications
for existing rural IPFs that may need time to adjust to the loss of
their FY 2015 rural payment adjustment or that experience a reduction
in payments solely because of this re-designation. As stated, this
policy is specifically for rural IPFs that become urban in FY 2016. We
are not implementing a transition policy for urban IPFs that become
rural in FY 2016 because these IPFs will receive the full rural
adjustment of 17 percent beginning October 1, 2015.
For the reasons discussed, we are proposing to implement a 3-year
budget-neutral phase-out of the rural adjustment for the IPFs that
during FY 2015 were designated as rural and for FY 2016 are designated
as urban under the new CBSA system. This is in addition to our proposed
implementation of a 2-year blended wage index for all IPFs. We believe
that the incremental reduction of the FY 2015 rural adjustment would be
appropriate to mitigate a significant reduction in payment. We
considered alternative timeframes for phasing out the rural adjustment
for IPFs which would transition from rural to urban status in FY 2016,
but believe that a 3-year budget-neutral phase-out of the rural
adjustment would appropriately mitigate the adverse payment impacts for
existing FY 2015 rural IPFs that will be designated as urban IPFs in FY
2016, while also ensuring that payment rates for these providers are
set accurately and appropriately. We invite public comment on this
proposed policy.
e. Budget Neutrality Adjustment
Changes to the wage index are made in a budget-neutral manner so
that updates do not increase expenditures. Therefore, for FY 2016, we
propose to continue to apply a budget-neutrality adjustment in
accordance with our existing budget-neutrality policy. This policy
requires us to estimate the total amount of IPF PPS payments for FY
2016 using the labor-related share and the wage indices from FY 2015
divided by the total estimated IPF PPS payments for FY 2016 using the
labor-related share and wage indices from FY 2016. The estimated
payments are based on FY 2014 IPF claims, inflated to the appropriate
FY. This quotient is the wage index budget-neutrality factor, and it is
applied in the update of the Federal per diem base rate for FY 2016 in
addition to the market basket described in section III.A. of this
proposed rule.
[[Page 25042]]
The proposed wage index budget-neutrality factor for FY 2016 is 1.0041.
2. Teaching Adjustment
In the November 2004 IPF PPS final rule, we implemented regulations
at Sec. 412.424(d)(1)(iii) to establish a facility-level adjustment
for IPFs that are, or are part of, teaching hospitals. The teaching
adjustment accounts for the higher indirect operating costs experienced
by hospitals that participate in graduate medical education (GME)
programs. The payment adjustments are made based on the ratio of the
number of full-time equivalent (FTE) interns and residents training in
the IPF and the IPF's average daily census (ADC).
Medicare makes direct GME payments (for direct costs such as
resident and teaching physician salaries, and other direct teaching
costs) to all teaching hospitals including those paid under a PPS, and
those paid under the TEFRA rate-of-increase limits. These direct GME
payments are made separately from payments for hospital operating costs
and are not part of the IPF PPS. The direct GME payments do not address
the estimated higher indirect operating costs teaching hospitals may
face.
The results of the regression analysis of FY 2002 IPF data
established the basis for the payment adjustments included in the
November 2004 IPF PPS final rule. The results showed that the indirect
teaching cost variable is significant in explaining the higher costs of
IPFs that have teaching programs. We calculated the teaching adjustment
based on the IPF's ``teaching variable,'' which is one plus the ratio
of the number of FTE residents training in the IPF (subject to
limitations described below) to the IPF's ADC.
We established the teaching adjustment in a manner that limited the
incentives for IPFs to add FTE residents for the purpose of increasing
their teaching adjustment. We imposed a cap on the number of FTE
residents that may be counted for purposes of calculating the teaching
adjustment. The cap limits the number of FTE residents that teaching
IPFs may count for the purpose of calculating the IPF PPS teaching
adjustment, not the number of residents teaching institutions can hire
or train. We calculated the number of FTE residents that trained in the
IPF during a ``base year'' and used that FTE resident number as the
cap. An IPF's FTE resident cap is ultimately determined based on the
final settlement of the IPF's most recent cost report filed before
November 15, 2004 (that is, the publication date of the IPF PPS final
rule). A complete discussion on the temporary adjustment to the FTE cap
to reflect residents added due to hospital closure and by residency
program appears in the January 27, 2011 IPF PPS proposed rule (76 FR
5018 through 5020) and the May 6, 2011 IPF PPS final rule (76 R 26453
through 26456).
In the regression analysis, the logarithm of the teaching variable
had a coefficient value of 0.5150. We converted this cost effect to a
teaching payment adjustment by treating the regression coefficient as
an exponent and raising the teaching variable to a power equal to the
coefficient value. We note that the coefficient value of 0.5150 was
based on the regression analysis holding all other components of the
payment system constant. A complete discussion of how the teaching
adjustment was calculated appears in the November 2004 IPF PPS final
rule (69 FR 66954 through 66957) and the May 2008 IPF PPS notice (73 FR
25721). As with other adjustment factors derived through the regression
analysis, we do not plan to rerun the teaching adjustment factors in
the regression analysis until we more fully analyze IPF PPS data.
Therefore, in this proposed rule, for FY 2016, we propose to continue
to retain the coefficient value of 0.5150 for the teaching adjustment
to the Federal per diem base rate.
3. Cost of Living Adjustment for IPFs Located in Alaska and Hawaii
The IPF PPS includes a payment adjustment for IPFs located in
Alaska and Hawaii based upon the county in which the IPF is located. As
we explained in the November 2004 IPF PPS final rule, the FY 2002 data
demonstrated that IPFs in Alaska and Hawaii had per diem costs that
were disproportionately higher than other IPFs. Other Medicare PPSs
(for example, the IPPS and LTCH PPS) adopted a cost of living
adjustment (COLA) to account for the cost differential of care
furnished in Alaska and Hawaii.
We analyzed the effect of applying a COLA to payments for IPFs
located in Alaska and Hawaii. The results of our analysis demonstrated
that a COLA for IPFs located in Alaska and Hawaii would improve payment
equity for these facilities. As a result of this analysis, we provided
a COLA in the November 2004 IPF PPS final rule.
A COLA for IPFs located in Alaska and Hawaii is made by multiplying
the nonlabor-related portion of the Federal per diem base rate by the
applicable COLA factor based on the COLA area in which the IPF is
located.
The COLA factors are published on the Office of Personnel
Management (OPM) Web site (https://www.opm.gov/oca/cola/rates.asp).
We note that the COLA areas for Alaska are not defined by county as
are the COLA areas for Hawaii. In 5 CFR 591.207, the OPM established
the following COLA areas:
City of Anchorage, and 80-kilometer (50-mile) radius by
road, as measured from the Federal courthouse;
City of Fairbanks, and 80-kilometer (50-mile) radius by
road, as measured from the Federal courthouse;
City of Juneau, and 80-kilometer (50-mile) radius by road,
as measured from the Federal courthouse;
Rest of the State of Alaska.
As stated in the November 2004 IPF PPS final rule, we update the
COLA factors according to updates established by the OPM. However,
sections 1911 through 1919 of the Nonforeign Area Retirement Equity
Assurance Act, as contained in subtitle B of title XIX of the National
Defense Authorization Act (NDAA) for Fiscal Year 2010 (Pub. L. 111-84,
October 28, 2009), transitions the Alaska and Hawaii COLAs to locality
pay. Under section 1914 of Pub. L. 111-84, locality pay is being phased
in over a 3-year period beginning in January 2010, with COLA rates
frozen as of the date of enactment, October 28, 2009, and then
proportionately reduced to reflect the phase-in of locality pay.
When we published the proposed COLA factors in the January 2011 IPF
PPS proposed rule (76 FR 4998), we inadvertently selected the FY 2010
COLA rates which had been reduced to account for the phase-in of
locality pay. We did not intend to propose the reduced COLA rates
because that would have understated the adjustment. Since the 2009 COLA
rates did not reflect the phase-in of locality pay, we finalized the FY
2009 COLA rates for RY 2010 through RY 2014.
In the FY 2013 IPPS/LTCH final rule (77 FR 53700 through 53701),
CMS established a methodology for FY 2014 to update the COLA factors
for Alaska and Hawaii. Under that methodology, we use a comparison of
the growth in the Consumer Price Indices (CPIs) in Anchorage, Alaska
and Honolulu, Hawaii relative to the growth in the overall CPI as
published by the Bureau of Labor Statistics (BLS) to update the COLA
factors for all areas in Alaska and Hawaii, respectively. As discussed
in the FY 2013 IPPS/LTCH proposed rule (77 FR 28145), because BLS
publishes CPI data for only Anchorage, Alaska and Honolulu, Hawaii, our
methodology for updating the COLA factors uses a comparison of the
growth in the CPIs for those cities relative to the growth in the
overall CPI to update the COLA factors
[[Page 25043]]
for all areas in Alaska and Hawaii, respectively. We believe that the
relative price differences between these cities and the United States
(as measured by the CPIs mentioned above) are generally appropriate
proxies for the relative price differences between the ``other areas''
of Alaska and Hawaii and the United States.
The CPIs for ``All Items'' that BLS publishes for Anchorage,
Alaska, Honolulu, Hawaii, and for the average U.S. city are based on a
different mix of commodities and services than is reflected in the
nonlabor-related share of the IPPS market basket. As such, under the
methodology we established to update the COLA factors, we calculated a
``reweighted CPI'' using the CPI for commodities and the CPI for
services for each of the geographic areas to mirror the composition of
the IPPS market basket nonlabor-related share. The current composition
of BLS' CPI for ``All Items'' for all of the respective areas is
approximately 40 percent commodities and 60 percent services. However,
the nonlabor-related share of the IPPS market basket is comprised of 60
percent commodities and 40 percent services. Therefore, under the
methodology established for FY 2014 in the FY 2013 IPPS/LTCH PPS final
rule, we created reweighted indexes for Anchorage, Alaska, Honolulu,
Hawaii, and the average U.S. city using the respective CPI commodities
index and CPI services index and applying the approximate 60/40 weights
from the IPPS market basket. This approach is appropriate because we
would continue to make a COLA for hospitals located in Alaska and
Hawaii by multiplying the nonlabor-related portion of the standardized
amount by a COLA factor.
Under the COLA factor update methodology established in the FY 2014
IPPS/LTCH final rule, we adjust payments made to hospitals located in
Alaska and Hawaii by incorporating a 25-percent cap on the CPI-updated
COLA factors. We note that OPM's COLA factors were calculated with a
statutorily mandated cap of 25 percent, and since at least 1984, we
have exercised our discretionary authority to adjust Alaska and Hawaii
payments by incorporating this cap. In keeping with this historical
policy, we would continue to use such a cap, as our proposal is based
on OPM's COLA factors. We believe this approach is appropriate because
our CPI-updated COLA factors use the 2009 OPM COLA factors as a basis.
In FY 2015 IPF PPS rulemaking, we adopted the same methodology for
the COLA factors applied under the IPPS because IPFs are hospitals with
a similar mix of commodities and services. We think it is appropriate
to have a consistent policy approach with that of other hospitals in
Alaska and Hawaii. Therefore, in the FY 2015 IPF PPS final rule, we
adopted the cost of living adjustment factors shown in the Addendum for
IPFs located in Alaska and Hawaii. Under IPPS COLA policy, the COLA
updates are determined every four years, when the IPPS market basket is
rebased. Since the IPPS COLA factors were last updated in FY 2014, they
are not scheduled to be updated again until FY 2018. As such, we
propose to continue using the existing IPF PPS COLA factors in effect
in FY 2015 for FY 2016. The IPF PPS COLA factors for FY 2016 are shown
in the Addendum of this proposed rule.
4. Proposed Adjustment for IPFs With a Qualifying Emergency Department
(ED)
The IPF PPS includes a facility-level adjustment for IPFs with
qualifying EDs. We provide an adjustment to the Federal per diem base
rate to account for the costs associated with maintaining a full-
service ED. The adjustment is intended to account for ED costs incurred
by a freestanding psychiatric hospital with a qualifying ED or a
distinct part psychiatric unit of an acute care hospital or a CAH, for
preadmission services otherwise payable under the Medicare Outpatient
Prospective Payment System (OPPS), furnished to a beneficiary on the
date of the beneficiary's admission to the hospital and during the day
immediately preceding the date of admission to the IPF (see Sec.
413.40(c)(2)), and the overhead cost of maintaining the ED. This
payment is a facility-level adjustment that applies to all IPF
admissions (with one exception described below), regardless of whether
a particular patient receives preadmission services in the hospital's
ED.
The ED adjustment is incorporated into the variable per diem
adjustment for the first day of each stay for IPFs with a qualifying
ED. That is, IPFs with a qualifying ED receive an adjustment factor of
1.31 as the variable per diem adjustment for day 1 of each stay. If an
IPF does not have a qualifying ED, it receives an adjustment factor of
1.19 as the variable per diem adjustment for day 1 of each patient
stay.
The ED adjustment is made on every qualifying claim except as
described below. As specified in Sec. 412.424(d)(1)(v)(B), the ED
adjustment is not made when a patient is discharged from an acute care
hospital or CAH and admitted to the same hospital's or CAH's
psychiatric unit. We clarified in the November 2004 IPF PPS final rule
(69 FR 66960) that an ED adjustment is not made in this case because
the costs associated with ED services are reflected in the DRG payment
to the acute care hospital or through the reasonable cost payment made
to the CAH.
Therefore, when patients are discharged from an acute care hospital
or CAH and admitted to the same hospital or CAH's psychiatric unit, the
IPF receives the 1.19 adjustment factor as the variable per diem
adjustment for the first day of the patient's stay in the IPF.
For FY 2016, we are proposing to continue to retain the 1.31
adjustment factor for IPFs with qualifying EDs. A complete discussion
of the steps involved in the calculation of the ED adjustment factor
appears in the November 2004 IPF PPS final rule (69 FR 66959 through
66960) and the May 2006 IPF PPS final rule (71 FR 27070 through 27072).
E. Other Proposed Payment Adjustments and Policies
1. Outlier Payment Overview
The IPF PPS includes an outlier adjustment to promote access to IPF
care for those patients who require expensive care and to limit the
financial risk of IPFs treating unusually costly patients. In the
November 2004 IPF PPS final rule, we implemented regulations at Sec.
412.424(d)(3)(i) to provide a per-case payment for IPF stays that are
extraordinarily costly. Providing additional payments to IPFs for
extremely costly cases strongly improves the accuracy of the IPF PPS in
determining resource costs at the patient and facility level. These
additional payments reduce the financial losses that would otherwise be
incurred in treating patients who require more costly care and,
therefore, reduce the incentives for IPFs to under-serve these
patients.
We make outlier payments for discharges in which an IPF's estimated
total cost for a case exceeds a fixed dollar loss threshold amount
(multiplied by the IPF's facility-level adjustments) plus the Federal
per diem payment amount for the case.
In instances when the case qualifies for an outlier payment, we pay
80 percent of the difference between the estimated cost for the case
and the adjusted threshold amount for days 1 through 9 of the stay
(consistent with the median LOS for IPFs in FY 2002), and 60 percent of
the difference for day 10 and thereafter. We established the 80 percent
and 60 percent loss sharing
[[Page 25044]]
ratios because we were concerned that a single ratio established at 80
percent (like other Medicare PPSs) might provide an incentive under the
IPF per diem payment system to increase LOS in order to receive
additional payments.
After establishing the loss sharing ratios, we determined the
current FY 2015 fixed dollar loss threshold amount through payment
simulations designed to compute a dollar loss beyond which payments are
estimated to meet the 2 percent outlier spending target. Each year when
we update the IPF PPS, we simulate payments using the latest available
data to compute the fixed dollar loss threshold so that outlier
payments represent 2 percent of total projected IPF PPS payments.
2. Proposed Update to the Outlier Fixed Dollar Loss Threshold Amount
In accordance with the update methodology described in Sec.
412.428(d), we propose to update the fixed dollar loss threshold amount
used under the IPF PPS outlier policy. Based on the regression analysis
and payment simulations used to develop the IPF PPS, we established a 2
percent outlier policy which strikes an appropriate balance between
protecting IPFs from extraordinarily costly cases while ensuring the
adequacy of the Federal per diem base rate for all other cases that are
not outlier cases.
Based on an analysis of the latest available data (that is, FY 2014
IPF claims) and rate increases, we believe it is necessary to update
the fixed dollar loss threshold amount in order to maintain an outlier
percentage that equals 2 percent of total estimated IPF PPS payments.
To update the IPF outlier threshold amount for FY 2016, we propose to
use FY 2014 claims data and the same methodology that we used to set
the initial outlier threshold amount in the May 2006 IPF PPS final rule
(71 FR 27072 and 27073), which is also the same methodology that we
used to update the outlier threshold amounts for years 2008 through
2015. Based on an analysis of this updated data, we estimate that IPF
outlier payments as a percentage of total estimated payments are
approximately 2.3 percent in FY 2015. Therefore, we propose to update
the outlier threshold amount to $9,825 to maintain estimated outlier
payments at approximately 2 percent of total estimated aggregate IPF
payments for FY 2016.
3. Proposed Update to IPF Cost-to-Charge Ratio Ceilings
Under the IPF PPS, an outlier payment is made if an IPF's cost for
a stay exceeds a fixed dollar loss threshold amount plus the IPF PPS
amount. In order to establish an IPF's cost for a particular case, we
multiply the IPF's reported charges on the discharge bill by its
overall cost-to-charge ratio (CCR). This approach to determining an
IPF's cost is consistent with the approach used under the IPPS and
other PPSs. In the June 2003 IPPS final rule (68 FR 34494), we
implemented changes to the IPPS policy used to determine CCRs for acute
care hospitals because we became aware that payment vulnerabilities
resulted in inappropriate outlier payments. Under the IPPS, we
established a statistical measure of accuracy for CCRs in order to
ensure that aberrant CCR data did not result in inappropriate outlier
payments.
As we indicated in the November 2004 IPF PPS final rule (69 FR
66961), because we believe that the IPF outlier policy is susceptible
to the same payment vulnerabilities as the IPPS, we adopted a method to
ensure the statistical accuracy of CCRs under the IPF PPS.
Specifically, we adopted the following procedure in the November 2004
IPF PPS final rule: We calculated 2 national ceilings, one for IPFs
located in rural areas and one for IPFs located in urban areas. We
computed the ceilings by first calculating the national average and the
standard deviation of the CCR for both urban and rural IPFs using the
most recent CCRs entered in the CY 2015 Provider Specific File.
To determine the rural and urban ceilings, we multiplied each of
the standard deviations by 3 and added the result to the appropriate
national CCR average (either rural or urban). The upper threshold CCR
for IPFs in FY 2016 is 1.9041 for rural IPFs, and 1.6881 for urban
IPFs, based on CBSA-based geographic designations. If an IPF's CCR is
above the applicable ceiling, the ratio is considered statistically
inaccurate, and we assign the appropriate national (either rural or
urban) median CCR to the IPF.
We apply the national CCRs to the following situations:
New IPFs that have not yet submitted their first Medicare
cost report. We continue to use these national CCRs until the
facility's actual CCR can be computed using the first tentatively or
final settled cost report.
IPFs whose overall CCR is in excess of 3 standard
deviations above the corresponding national geometric mean (that is,
above the ceiling).
Other IPFs for which the MAC obtains inaccurate or
incomplete data with which to calculate a CCR.
We are not proposing to make any changes to the application of the
national CCRs or to the procedures for updating the CCR ceilings in FY
2016. However, we are proposing to update the FY 2016 national median
and ceiling CCRs for urban and rural IPFs based on the CCRs entered in
the latest available IPF PPS Provider Specific File. Specifically, for
FY 2016, and to be used in each of the 3 situations listed above, using
the most recent CCRs entered in the CY 2015 Provider Specific File we
estimate the national median CCR of 0.6210 for rural IPFs and the
national median CCR of 0.4675 for urban IPFs. These calculations are
based on the IPF's location (either urban or rural) using the CBSA-
based geographic designations.
A complete discussion regarding the national median CCRs appears in
the November 2004 IPF PPS final rule (69 FR 66961 through 66964).
IV. Other Payment Policy Issues
A. ICD-10-CM and ICD-10-PCS Implementation
We remind IPF providers that CMS is implementing the International
Classification of Diseases, 10th Revision, Clinical Modification (ICD-
10-CM) as the HIPAA designated code set for reporting diseases,
injuries, impairments, other health related problems, their
manifestations, and causes of injury as of October 1, 2015. Below is a
brief history of key activities leading to the October 1, 2015
implementation date.
In the Standards for Electronic Transactions final rule, published
in the Federal Register on August 17, 2000 (65 FR 50312), the
Department adopted the International Classification of Diseases, 9th
Revision, Clinical Modification (ICD-9-CM) as the HIPAA designated code
set for reporting diseases, injuries, impairments, other health related
problems, their manifestations, and causes of injury. Therefore, on
January 1, 2005 when the IPF PPS began, we used ICD-9-CM as the
designated code set for the IPF PPS. IPF claims with a principal
diagnosis included in Chapter Five of the ICD-9-CM are paid the Federal
per diem base rate and all other applicable adjustments, including any
applicable DRG adjustment.
Together with the rest of the healthcare industry, CMS was
scheduled to implement the 10th revision of the ICD coding scheme, that
is, ICD-10-CM, on October 1, 2014. Hence, in the FY 2014 IPF PPS final
rule (78 FR 46741-46742), we finalized a policy that ICD-10-CM codes
will be used in IPF PPS.
On April 1, 2014, the Protecting Access to Medicare Act of 2014
(PAMA)
[[Page 25045]]
(Pub. L. 113-93) was enacted. Section 212 of PAMA, titled ``Delay in
Transition from ICD-9 to ICD-10 Code Sets,'' provided that ``[t]he
Secretary of Health and Human Services may not, prior to October 1,
2015, adopt ICD-10 code sets as the standard for code sets under
section 1173(c) of the Social Security Act (42 U.S.C. 1320d-2(c)) and
section 162.1002 of title 45, Code of Federal Regulations.'' On May 1,
2014, the Secretary announced that HHS expected to issue an interim
final rule that would require use of ICD-10-CM beginning October 1,
2015 and would continue to require use of ICD-9-CM through September
30, 2015. This announcement is available on the CMS Web site at https://cms.gov/Medicare/Coding/ICD10/. HHS finalized the new
compliance date of October 1, 2015 for ICD-10-CM and ICD-10-PCS in an
August 4, 2014 final rule titled ``Administrative Simplification:
Change to the Compliance Date for the International Classification of
Diseases, 10th Revision (ICD-10-CM and ICD-10-PCS)'' (79 FR 45128).
This rule also requires HIPAA covered entities to continue to use the
ICD-9-CM code set through September 30, 2015. Therefore, beginning
October 1, 2015, we require use of the ICD-10-CM and ICD-10-PCS codes
for reporting the MS-DRG and comorbidity adjustment factors for IPF
services.
Every year, changes to the ICD-10-CM and the ICD-10-PCS coding
system will be addressed in the IPPS proposed and final rules. The
changes to the codes are effective October 1 of each year and must be
used by acute care hospitals as well as other providers to report
diagnostic and procedure information. The IPF PPS has always
incorporated ICD-9-CM coding changes made in the annual IPPS update and
will continue to do so for the ICD-10-CM and ICD-10-PCS coding changes.
We will continue to publish coding changes in a Transmittal/Change
Request, similar to how coding changes are announced by the IPPS and
LTCH PPS. The coding changes relevant to the IPF PPS are also published
in the IPF PPS proposed and final rules, or in IPF PPS update notices.
In Sec. 412.428(e), we indicate that CMS will publish information
pertaining to the annual update for the IPF PPS, which includes
describing the ICD-9-CM coding changes and DRG classification changes
discussed in the annual update to the hospital IPPS regulations.
Because ICD-10-CM will be implemented on October 1, 2015, we need to
update the regulation language at Sec. 412.428(e) to refer to ICD-10-
CM, rather than ICD-9-CM. Therefore, we propose to revise Sec.
412.428(e) to state that the information we will publish annually in
the Federal Register to describe IPF PPS updates would describe the
ICD-10-CM coding changes and DRG classification changes discussed in
the annual update to the hospital inpatient prospective payment system
regulations. In the FY 2015 IPF PPS final rule (79 FR 45945 through
46946), the MS-DRGs were converted so that the MS-DRG assignment logic
uses ICD-10-CM/PCS codes directly. When an IPF submits a claim for
discharges, the ICD-10-CM/PCS diagnosis and procedure codes will be
assigned to the correct MS-DRG. In the FY 2015 IPF PPS final rule, we
also identified the ICD-10-CM/PCS codes that are eligible for
comorbidity payment adjustments under the IPF PPS (79 FR 45947 through
45955).
The ICD-10-CM guidelines are updated each year along with the ICD-
10-CM code set. To find the annual coding guidelines, go to CDC's Web
site at https://www.cdc.gov/nchs/icd/icd10cm.htm or the annual ICD-10-CM
updates posted on the CMS ICD-10 Web site at https://www.cms.gov/Medicare/Coding/ICD10/.
B. Status of Future Refinements
For RY 2012, we identified several areas of concern for future
refinement, and we invited comments on these issues in our RY 2012
proposed and final rules. For further discussion of these issues and to
review the public comments, we refer readers to the RY 2012 IPF PPS
proposed rule (76 FR 4998) and final rule (76 FR 26432).
We have delayed making refinements to the IPF PPS until we have
completed a thorough analysis of IPF PPS data on which to base those
refinements. Specifically, we will delay updating the adjustment
factors derived from the regression analysis until we have IPF PPS data
that include as much information as possible regarding the patient-
level characteristics of the population that each IPF serves. We have
begun the necessary analysis to better understand IPF industry
practices so that we may refine the IPF PPS in the future, as
appropriate.
IPF Covered Services
The IPF PPS established the Federal per diem base rate for each
patient day in an IPF from the national average routine operating,
ancillary, and capital costs. Preliminary analysis reveals that in 2012
to 2013, over 20 percent of IPF stays show no reported ancillary costs,
such as laboratory and drug costs, in cost reports or charges on
claims. The majority of these stays with zero ancillary costs or
charges were in for-profit, free-standing IPF hospitals. We would
expect that patients admitted to an IPF would undergo laboratory
testing as part of the admission history and physical. We would also
expect that most patients requiring hospitalization for active
psychiatric treatment would need drugs. Therefore, we were surprised
when the analysis showed such a large number of stays reporting no
laboratory services and no drugs were provided throughout the
hospitalization. Until further analysis is completed, we can only
surmise that the stays did not require ancillaries and therefore, were
not provided, or that the ancillary services were separately billed.
We remind the industry that CMS pays only the inpatient psychiatric
facility for services furnished to a Medicare beneficiary who is an
inpatient of that inpatient psychiatric facility, except for certain
professional services, and that payments made under this subpart are
payments in full for all inpatient hospital services, provided directly
or under arrangement (see 42 CFR 412.404(d)), as specified in 42 CFR
409.10.
The covered services specified in Sec. 409.10(a), which apply to
IPFs, include the following: Bed and board; nursing services and other
related services; use of hospital or CAH facilities; medical social
services; drugs, biologicals, supplies, appliances, and equipment;
certain other diagnostic or therapeutic services; medical or surgical
services provided by certain interns or residents-in-training; and
transportation services, including transport by ambulance.
Only the professional services listed in Sec. 409.10(b) can be
separately billed for a Medicare beneficiary who is an inpatient at an
IPF, including services of physicians, physician assistants, nurse
practitioners, clinical nurse specialists, certified nurse mid-wives,
anesthetists, and qualified psychologists. (see Sec. 409.10(b) for
specifics on how these professions and services are defined. These
regulations are available online at the electronic Code of Federal
Regulations, at https://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&tpl=%2Findex.tpl.)
Ancillary costs such as laboratory costs and drugs are already
included in the Medicare IPF PPS per diem payment and should not be
unbundled and billed separately to Medicare. We expect that the IPF
would be recording the cost of all drugs provided to its Medicare
patients on its Medicare cost reports, and reporting charges for those
drugs on its Medicare claims. We expect that when an IPF contracts with
an outside laboratory to provide services to its
[[Page 25046]]
Medicare inpatients, the IPF would instruct the laboratory to bill the
IPF and not to bill Medicare. Similarly, drugs provided to IPF Medicare
inpatients where Medicare is the primary payer should not be billed to
Part D or to other insurers.
We are continuing to analyze claims and cost report data that do
not include ancillary charges or costs, and will be sharing our
findings with the Center for Program Integrity and the Office of
Financial Management for further investigation, as the results warrant.
Our refinement analysis is dependent on recent precise data for costs,
including ancillary costs. We will continue to collect these data until
an accurate refinement analysis can be performed. Therefore, we are not
proposing refinements in this proposed rule. Once we have gathered
timely and accurate data, we will analyze that data with the
expectation of a refinement update in future rulemaking. We invite
comments on this issue of zero ancillary costs to better understand
industry practices.
V. Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program
A. Background
1. Statutory Authority
Section 1886(s)(4) of the Act, as added and amended by sections
3401(f) and 10322(a) of the Affordable Care Act, requires the Secretary
to implement a quality reporting program for inpatient psychiatric
hospitals and psychiatric units. Section 1886(s)(4)(A)(i) of the Act
requires that, for FY 2014 \2\ and each subsequent fiscal year, the
Secretary must reduce any annual update to a standard Federal rate for
discharges occurring during the rate year by 2.0 percentage points for
any inpatient psychiatric hospital or psychiatric unit that does not
comply with quality data submission requirements with respect to an
applicable fiscal year.
---------------------------------------------------------------------------
\2\ The statute uses the term ``rate year'' (RY). However,
beginning with the annual update of the inpatient psychiatric
facility prospective payment system (IPF PPS) that took effect on
July 1, 2011 (RY 2012), we aligned the IPF PPS update with the
annual update of the ICD-9-CM codes, effective on October 1 of each
year. This change allowed for annual payment updates and the ICD-9-
CM coding update to occur on the same schedule and appear in the
same Federal Register document, promoting administrative efficiency.
To reflect the change to the annual payment rate update cycle, we
revised the regulations at 42 CFR 412.402 to specify that, beginning
October 1, 2012, the RY update period would be the 12-month period
from October 1 through September 30, which we refer to as a ``fiscal
year'' (FY) (76 FR 26435). Therefore, with respect to the IPFQR
Program, the terms ``rate year'', as used in the statute, and
``fiscal year'' as used in the regulation, both refer to the period
from October 1 through September 30. For more information regarding
this terminology change, we refer readers to section III. of the RY
2012 IPF PPS final rule (76 FR 26434 through 26435).
---------------------------------------------------------------------------
As provided in section 1886(s)(4)(A)(ii) of the Act, the
application of the reduction for failure to report under section
1886(s)(4)(A)(i) of the Act may result in an annual update of less than
0.0 percent for a fiscal year, and may result in payment rates under
section 1886(s)(1) of the Act being less than the payment rates for the
preceding year. In addition, section 1886(s)(4)(B) of the Act requires
that the application of the reduction to a standard Federal rate update
be noncumulative across fiscal years. Thus, any reduction applied under
section 1886(s)(4)(A) of the Act will apply only with respect to the
fiscal year rate involved and the Secretary may not take into account
the reduction in computing the payment amount under the system
described in section 1886(s)(1) of the Act for subsequent years.
Section 1886(s)(4)(C) of the Act requires that, for FY 2014
(October 1, 2013, through September 30, 2014) and each subsequent year,
each psychiatric hospital and psychiatric unit must submit to the
Secretary data on quality measures as specified by the Secretary. The
data must be submitted in a form and manner and at a time specified by
the Secretary. Under section 1886(s)(4)(D)(i) of the Act, measures
selected for the quality reporting program must have been endorsed by
the entity with a contract under section 1890(a) of the Act. The
National Quality Forum (NQF) currently holds this contract.
Section 1886(s)(4)(D)(ii) of the Act provides that, in the case of
a specified area or medical topic determined appropriate by the
Secretary for which a feasible and practical measure has not been
endorsed by the entity with a contract under section 1890(a) of the
Act, the Secretary may specify a measure that is not so endorsed as
long as due consideration is given to measures that have been endorsed
or adopted by a consensus organization identified by the Secretary.
Pursuant to section 1886(s)(4)(D)(iii) of the Act, the Secretary must
publish the measures applicable to the FY 2014 IPFQR Program no later
than October 1, 2012.
Section 1886(s)(4)(E) of the Act requires the Secretary to
establish procedures for making public the data submitted by inpatient
psychiatric hospitals and psychiatric units under the IPFQR Program.
These procedures must ensure that a facility has the opportunity to
review its data prior to the data being made public. The Secretary must
report quality measures that relate to services furnished by the
psychiatric hospitals and units on the CMS Web site.
2. Covered Entities
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53645), we
established that the IPFQR Program's quality reporting requirements
cover those psychiatric hospitals and psychiatric units paid under
Medicare's IPF PPS (42 CFR 412.404(b)). Generally, psychiatric
hospitals and psychiatric units within acute care and critical access
hospitals that treat Medicare patients are paid under the IPF PPS.
Consistent with prior rules, we continue to use the term ``inpatient
psychiatric facility'' (IPF) to refer to both inpatient psychiatric
hospitals and psychiatric units. This usage follows the terminology in
our IPF PPS regulations at Sec. 412.402. For more information on
covered entities, we refer readers to the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53645).
3. Considerations in Selecting Quality Measures
Our objective in selecting quality measures is to balance the need
for information on the full spectrum of care delivery and the need to
minimize the burden of data collection and reporting. We have focused
on measures that evaluate critical processes of care that have
significant impact on patient outcomes and support CMS and HHS
priorities for improved quality and efficiency of care provided by
IPFs. We refer readers to the FY 2013 IPPS/LTCH PPS final rule Section
4.a. (77 FR 53645 through 53646) for a detailed discussion of the
considerations taken into account in selecting quality measures.
Before being proposed for inclusion in the IPFQR Program, measures
are placed on a list of measures under consideration, which is
published annually by December 1 on behalf of CMS by the NQF. In
compliance with section 1890A(a)(2) of the Act, measures proposed for
the IPFQR Program were included in 2 publicly available documents:
``List of Measures under Consideration for December 1, 2013,'' and
``List of Measures under Consideration for December 1, 2014'' (https://www.qualityforum.org/Setting_Priorities/Partnership/Measure_Applications_Partnership.aspx). The Measure Applications
Partnership (MAP), a multi-stakeholder group convened by the NQF,
reviews the measures under consideration for the IPFQR Program, among
other Federal programs, and provides input on those measures to the
Secretary. The MAP's 2014 and 2015 recommendations for quality measures
under consideration are captured in the following
[[Page 25047]]
documents: ``MAP Pre-Rulemaking Report: 2014 Recommendations on
Measures for More than 20 Federal Programs'' (https://www.qualityforum.org/Publications/2014/01/MAP_Pre-Rulemaking_Report__2014_Recommendations_on_Measures_for_More_than_20_Federal_Programs.aspx) and ``Process and Approach for MAP Pre-Rulemaking
Deliberations 2015'' (https://www.qualityforum.org/Publications/2015/01/Process_and_Approach_for_MAP_Pre-Rulemaking_Deliberations_2015.aspx).
We considered the input and recommendations provided by the MAP in
selecting all measures for the Program, including those discussed
below.
B. Retention of IPFQR Program Measures Adopted in Previous Payment
Determinations
Since the inception of the IPFQR Program in FY 2013, we have
adopted a total of 14 mandatory measures. In the FY 2013 IPPS/LTCH PPS
final rule (77 FR 53646 through 53652), we adopted six chart-abstracted
IPF quality measures for the FY 2014 payment determination and
subsequent years. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50889
through 50895), we added 2 measures for the FY 2016 payment
determination and subsequent years. In the FY 2015 IPF PPS final rule
(79 FR 45963 through 45974), we finalized the addition of 2 new
measures to the IPFQR Program to those already adopted for the FY 2016
payment determination and subsequent years, and finalized four quality
measures for the FY 2017 payment determination and subsequent years.
C. Proposed Removal of HBIPS-4 From the IPFQR Program Measure Set for
the FY 2017 Payment Determination and Subsequent Years
We first adopted HBIPS-4 Patients Discharged on Multiple
Antipsychotic Medications in the FY 2013 IPPS/LTCH PPS final rule (77
FR 53649 through 53650). We refer readers to that rule for a detailed
discussion of the measure. At the time that we adopted the measure, it
was NQF-endorsed and intended for use in conjunction with HBIPS-5
Patients Discharged on Multiple Antipsychotic Medications with
Appropriate Justification. However, NQF removed its endorsement of
HBIPS-4 in January 2014. The NQF's Behavioral Health Steering
Committee, in its May 2014 Technical Expert Panel Report, found that
current evidence indicated that HBIPS-4 ``does not allow for the
distinction of differences in providers . . . .'' \3\ Moreover, the
Steering Committee noted that HBIPS-4 ``is not a measure of quality of
patient care . . . and there is insufficient evidence to warrant the
endorsement of this measure given the use of HBIPS-5, which addresses
patients discharged on multiple antipsychotic medications with
appropriate justification.'' \4\ For these reasons, the Steering
Committee did not re-endorse HBIPS-4.
---------------------------------------------------------------------------
\3\ Behavioral Health Endorsement Maintenance 2014, Phase 2,
Technical Report, 67, (May 9, 2014). Available at https://www.qualityforum.org/Publications/2014/05/Behavioral_Health_Endorsement_Maintenance_2014_-_Phase_II.aspx.
\4\ Ibid.
---------------------------------------------------------------------------
As we stated in the FY 2013 IPPS/LTCH PPS final rule, we originally
proposed HBIPS-4, in part, because HBIPS-4 and HBIPS-5 were intended to
be reported as a set (77 FR 53649). However, as discussed above, NQF no
longer believes HBIPS-4 is necessary in that set, and we agree. We have
the authority to maintain measures that are not NQF-endorsed under
section 1886(s)(4)(D)(ii) of the Act. However, based on the loss of NQF
endorsement and because providers must still submit data for HBIPS-5,
which we believe sufficiently includes the information HBIPS-4 was
intended to collect, we believe removal of HBIPS-4 from the IPFQR
Program is warranted. We note that the data collection period for FY
2016 has ended and providers are required to submit this data before
this rule will be finalized. Therefore, FY 2017 is the first year that
we would be able to remove this measure from the program.
In summary, Table 19, below, identifies the measure that we are
proposing to remove beginning with the FY 2017 payment determination.
We request comment on this proposal.
Table 19--IPFQR Program Measure Proposed To Be Removed for the FY 2017
Payment Determination and Subsequent Years
------------------------------------------------------------------------
NQF No. Measure ID Measure
------------------------------------------------------------------------
N/A........................... HBIPS-4.......... Patients Discharged
on Multiple
Antipsychotic
Medications
------------------------------------------------------------------------
D. New Quality Measures Proposed for the FY 2018 Payment Determination
and Subsequent Years
For the FY 2018 payment determination and subsequent years, we are
proposing five new measures. The sections below outline our rationale
for proposing these measures.
1. TOB-3 Tobacco Use Treatment Provided or Offered at Discharge and the
Subset Measure TOB-3a Tobacco Use Treatment at Discharge (NQF #1656)
Tobacco use is one of the greatest contributors of morbidity and
mortality in the United States, accounting for more than 435,000 deaths
annually.\5\ Smoking is a known cause of multiple cancers, heart
disease, stroke, complications of pregnancy, chronic obstructive
pulmonary disease, other respiratory problems, poorer wound healing,
and many other diseases.\6\ This health issue has significant
implications for persons with mental illness and substance use
disorders. Tobacco use is much higher among people with co-existing
mental health conditions than for the general population.\7\ One study
has estimated that these individuals are twice as likely to smoke as
the rest of the population.\8\ Tobacco use also creates a heavy
financial cost to both individuals and society. Smoking-
[[Page 25048]]
attributable health care expenditures are estimated at $96 billion per
year in direct medical expenses and $97 billion in lost
productivity.\9\
---------------------------------------------------------------------------
\5\ Centers for Disease Control and Prevention. Annual Smoking-
Attributable Mortality, Years of Potential Life Lost, and
Productivity Losses--United States, 2000-2004.'' Morb Mortal Wkly
Rep. 2008. 57(45): 1226-1228. Available at: https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5745a3.htm.
\6\ U.S. Department of Health and Human Services. ``The health
consequences of smoking: a report of the Surgeon General.'' Atlanta,
GA, U.S. Department of Health and Human Services, Centers for
Disease Control and Prevention, National Center for Chronic Disease
Prevention and Health Promotion, Office on Smoking and Health, 2004.
\7\ Fiore, Michael C., Goplerud, Eric, Shroeder, Steven A.
(2010). The Joint Commission's New Tobacco Cessation Measures--Will
Hospitals Do the Right Thing? N Engl J Med 2012; 366:1172-1174.
Available at https://www.nejm.org/doi/full/10.1056/nejmp1115176.
\8\ Lasser K, Boyd JW, Woolhandler S, Himmelstein, DU, McCormick
D, Bor DH. Smoking and mental illness: A population-based prevalence
study. JAMA. 2000;284(20):2606-2610.
\9\ Centers for Disease Control and Prevention. ``Best Practices
for Comprehensive Tobacco Control Programs--2007.'' Atlanta, GA,
Department of Health and Human Services, Centers for Disease Control
and Prevention, National Center for Chronic Disease Prevention and
Health Promotion, Office on Smoking and Health, 2007.
---------------------------------------------------------------------------
Strong and consistent evidence demonstrates that timely tobacco
dependence interventions for patients using tobacco can significantly
reduce the risk of developing a tobacco-related disease, as well as
provide improved health outcomes for those already suffering from a
tobacco-related disease.\10\ Even a minimal intervention has been shown
to result in cessation.\11\ Research discloses that tobacco users
hospitalized with psychiatric illnesses who enter into smoking-
cessation treatment can successfully overcome their tobacco dependence;
\12\ however, ``studies show that many hospitals do not consistently
provide cessation services to their patients.'' \13\ Evidence also
suggests that tobacco cessation treatment does not increase, and may
even decrease, the risk of re-hospitalization for tobacco users
hospitalized with psychiatric illnesses.\14\ Research further
demonstrates that effective tobacco cessation support across the care
continuum can be provided with only minimal additional provider effort
and without harm to the mental health recovery process.\15\
---------------------------------------------------------------------------
\10\ U.S. Department of Health and Human Services. ``The health
consequences of smoking: a report of the Surgeon General.'' Atlanta,
GA, U.S. Department of Health and Human Services, Centers for
Disease Control and Prevention, National Center for Chronic Disease
Prevention and Health Promotion, Office on Smoking and Health, 2004.
\11\ Fiore MC, Ja[eacute]n CR, Baker TB, et al. Treating Tobacco
Use and Dependence: 2008 Update. Clinical Practice Guideline.
Rockville, MD: U.S. Department of Health and Human Services. Public
Health Service. May 2008, available at https://www.ncbi.nlm.nih.gov/books/NBK63952.
\12\ Prochaska, JJ, et al. ``Efficacy of Initiating Tobacco
Dependence Treatment in Inpatient Psychiatry: A Randomized
Controlled Trial.'' Am. J. Pub. Health. 2013 August 15; e1-e9.
\13\ Fiore, Michael C., Goplerud, Eric, Shroeder, Steven A.
(2010). The Joint Commission's New Tobacco Cessation Measures--Will
Hospitals Do the Right Thing? N Engl J Med 2012; 366:1172-1174,
available at https://www.nejm.org/doi/full/10.1056/nejmp1115176.
\14\ Prochaska, JJ, et al. ``Efficacy of Initiating Tobacco
Dependence Treatment in Inpatient Psychiatry: A Randomized
Controlled Trial.'' Am. J. Pub. Health. 2013 August 15; e1-e9.
\15\ Ibid.
---------------------------------------------------------------------------
TOB-3 (NQF #1656) is a chart-abstracted measure that identifies
those patients 18 years of age and older who have used tobacco products
within 30 days of admission and who ``were referred to or refused
evidence-based outpatient counseling AND received or refused a
prescription for FDA-approved cessation medication upon discharge.''
\16\ TOB-3a is a subset of TOB-3 and identifies those IPF ``patients
who were referred to evidence-based outpatient counseling AND received
a prescription for FDA-approved cessation medication upon discharge as
well as those who were referred to outpatient counseling and had reason
for not receiving a prescription for medication.'' \17\ Providers must
report this measure set as ``an overall rate which includes all
patients to whom tobacco treatment was provided, or offered and
refused, at the time of hospital discharge (TOB-3), and a second rate,
a subset of the first, which includes only those patients who received
tobacco use treatment at discharge. (TOB-3a).'' \18\ For more
information on the measure specifications, we refer readers to the
Specifications Manual for National Hospital Inpatient Quality Measures
at https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228773989482. Providing counseling and recommending cessation medication are
core strategies of the Treating Tobacco Use and Dependence
Guidelines.\19\ For the reasons stated above, we believe that adoption
of the TOB-3/TOB-3a measure set, which assesses IPFs' offering of these
tobacco use cessation treatments to IPF patients, would result in
better overall health outcomes for IPF patients.
---------------------------------------------------------------------------
\16\ TOB-3 and TOB-3a Measure Specifications, available at
https://www.jointcommission.org/assets/1/6/HIQR_Jan2015_v4_4a_1_EXE.zip
\17\ Ibid.
\18\ TOB-3 and TOB-3a Measure Specifications, available at
https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228773989482.
\19\ See Fiore MC, Ja[eacute]n CR, Baker TB, et al. Treating
Tobacco Use and Dependence: 2008 Update. Clinical Practice
Guideline. Rockville, MD: U.S. Department of Health and Human
Services. Public Health Service. May 2008. Available at https://www.ncbi.nlm.nih.gov/books/NBK63952. The specific strategy is
further specified in Strategy 4A.
---------------------------------------------------------------------------
Furthermore, the adoption of this measure set would strengthen
related measures already in place in the IPFQR Program. Currently, the
IPFQR Program includes 2 other tobacco cessation measures: (1) Tobacco
Use Screening (TOB-1), a chart-abstracted measure that assesses
hospitalized patients who are screened within the first 3 days of
admission for tobacco use (cigarettes, smokeless tobacco, pipe, and
cigar) within the previous 30 days; and (2) The Tobacco Use Treatment
Provided or Offered (TOB-2), which includes the subset, Tobacco Use
Treatment (TOB-2a). TOB-2/TOB-2a is a chart-abstracted measure set
reported as an overall rate that includes all patients to whom tobacco
use treatment was provided, or offered and refused, and a second rate,
a subset of the first, which includes only those patients who received
tobacco use treatment. TOB-1 and TOB-2/TOB-2a provide a picture of care
given during the hospital stay. In contrast, TOB-3/TOB-3a present the
care given at discharge. Together, these 3 measures/measure sets
present a broader picture of the entire episode of care. If the TOB-3/
TOB-3a measure set is adopted, the IPFQR Program's measure set would
showcase both the facility's practice of screening patients for tobacco
use and the outcomes of a facility's practice of offering opportunities
to stop during the course of the stay and upon discharge. Further, the
adoption of TOB-3/TOB-3a could alert IPFs to gaps in treatment for
smoking cessation intervention at discharge if rates for these measures
are low. This knowledge would support the development of quality
improvement plans and better engage patients in treatment.
We believe that public reporting of this information would provide
consumers and other stakeholders with useful information in choosing
among different facilities for patients who use tobacco products. In
addition, this measure set promotes the National Quality Strategy
priority of Effective Prevention and Treatment, particularly with
respect to the leading causes of mortality, starting with
cardiovascular disease. As noted above, tobacco use is one of the
greatest contributors of morbidity and mortality in the United
States,\20\ contributing to various forms of cardiovascular disease,
among many other conditions.\21\ ``Tobacco use remains the chief
preventable cause of illness and death in our society.'' \22\ Cessation
interventions can significantly
[[Page 25049]]
reduce the risk of developing tobacco-related disease,\23\ leading to
decreases in cardiovascular disease, among other diseases, and,
ultimately, mortality. Encouraging intervention would promote effective
treatment of tobacco use, and may contribute to prevention of the many
diseases that are associated with tobacco use.
---------------------------------------------------------------------------
\20\ Centers for Disease Control and Prevention. Annual Smoking-
Attributable Mortality, Years of Potential Life Lost, and
Productivity Losses--United States, 2000-2004.'' Morb Mortal Wkly
Rep. 2008. 57(45): 1226-1228. Available at: https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5745a3.htm.
\21\ U.S. Department of Health and Human Services. ``The health
consequences of smoking: a report of the Surgeon General.'' Atlanta,
GA, U.S. Department of Health and Human Services, Centers for
Disease Control and Prevention, National Center for Chronic Disease
Prevention and Health Promotion, Office on Smoking and Health, 2004.
\22\ Fiore, Michael C., Goplerud, Eric, Shroeder, Steven A.
(2010). The Joint Commission's New Tobacco Cessation Measures--Will
Hospitals Do the Right Thing? N Engl J Med 2012; 366:1172-1174
Available at: https://www.nejm.org/doi/full/10.1056/nejmp1115176.
\23\ U.S. Department of Health and Human Services. ``The health
consequences of smoking: a report of the Surgeon General.'' Atlanta,
GA, U.S. Department of Health and Human Services, Centers for
Disease Control and Prevention, National Center for Chronic Disease
Prevention and Health Promotion, Office on Smoking and Health, 2004.
---------------------------------------------------------------------------
For these reasons, we included TOB-3/TOB-3a in our ``List of
Measures under Consideration for December 1, 2014.'' The MAP provided
input on the measure set and supported its inclusion in the IPFQR
Program in its report ``Process and Approach for MAP Pre-Rulemaking
Deliberations 2015'' available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=78711. Moreover, this measure set
is NQF-endorsed for the IPF setting in conformity with the statutory
criteria for measure selection under section 1886(s)(4)(D)(i) of the
Act.
We invite public comments on our proposal to adopt the TOB-3 and
TOB-3a measure set for the FY 2018 payment determination and subsequent
years.
2. SUB-2 Alcohol Use Brief Intervention Provided or Offered and SUB-2a
Alcohol Use Brief Intervention (NQF #1663)
Individuals with mental health conditions experience substance use
disorders (SUDs) at a much higher rate than the general population.
Individuals with the most serious mental illnesses have the highest
rates of SUDs. Co-occurring SUDs often go undiagnosed and, without
treatment, contribute to a longer persistence of disorders, poorer
treatment outcomes, lower rates of medication adherence, and greater
impairments to functioning.
Substance abuse, particularly alcohol abuse, is a significant
problem in the elderly. Alcohol use disorders are the most prevalent
type of addictive disorder in individuals ages 65 and over.\24\ Roughly
6 percent of the elderly are considered to be heavy users of
alcohol.\25\ Alcohol abuse is often associated with depression and
contributes to the etiology of many serious medical conditions,
including liver disease and cardiovascular disease. For these reasons,
it is important to assess IPFs' efforts to offer alcohol abuse
treatment to those patients who screen positive for alcohol abuse.
---------------------------------------------------------------------------
\24\ Ross, S. (2005). Alcohol Use Disorders in the Elderly.
Primary Psychiatry, 12(1):32-40.
\25\ AL Mirand and JW Welte. Alcohol consumption among the
elderly in a general population, Erie County, New York. Am J Public
Health. 1996 July; 86(7): 978-984.
---------------------------------------------------------------------------
SUB-2 includes ``[p]atients 18 years of age and older who screened
positive for unhealthy alcohol use who received or refused a brief
intervention during the hospital \26\ stay.'' \27\ SUB-2a includes
``[p]atients who received the brief intervention during the hospital
stay.'' \28\ The measure set is chart-abstracted and ``is reported as
an overall rate which includes all patients to whom a brief
intervention was provided, or offered and refused, and a second rate, a
subset of the first, which includes only those patients who received a
brief intervention.'' \29\ For more information on the measure
specifications, we refer readers to the Specifications Manual for
National Hospital Inpatient Quality Measures at https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228773989482.
---------------------------------------------------------------------------
\26\ Although the measure refers to ``hospitals,'' the measure
is specified for all in-patient settings. https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228773989482.
\27\ SUB-2 and SUB-2a Measure Specifications, available at
https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228773989482.
\28\ Ibid.
\29\ SUB-2 and SUB-2a Measure Specifications, available at
https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228773989482.
---------------------------------------------------------------------------
We believe that the addition of the SUB-2/SUB-2a measure set to the
related existing substance abuse measure in the IPFQR Program would
improve the overall quality of care that patients receive in IPF
settings, as well as overall patient health outcomes. We previously
adopted the SUB-1 measure (Alcohol Use Screening (SUB-1) (NQF #1661))
(78 FR 50890 through 50892). SUB-1 assesses ``hospitalized patients 18
years of age and older who are screened during the hospital stay using
a validated screening questionnaire for unhealthy alcohol use.'' SUB-1
alone does not provide a full picture of an IPF's response to this
screening. However, when linked to SUB-2/SUB-2a, the IPF measure set
depicts the rate at which patients are screened for potential alcohol
abuse and the rate at which those who screen positive accept the
offered interventions. Further, the adoption of SUB-2/SUB 2a could
alert IPFs to gaps in treatment for interventions if rates are low,
which supports the development of quality improvement plans and better
patient engagement in treatment. In addition, data for the SUB-2/SUB-2a
measure set, in combination with the SUB-1 measure, would afford
consumers useful information in choosing among different facilities,
particularly for patients who may require assistance with unhealthy
alcohol use.
Additionally, we believe that this measure set promotes the
National Quality Strategy priority of Effective Prevention and
Treatment for the leading causes of mortality, starting with
cardiovascular disease. As noted above, alcohol use disorders are the
most prevalent type of addictive disorder in individuals ages 65 and
over \30\ and contribute to serious medical conditions, including
cardiovascular disease and liver disease. Encouraging interventions
would promote treatment of unhealthy alcohol use and may contribute to
prevention of the many diseases that are associated with alcohol abuse,
including cardiovascular disease.
---------------------------------------------------------------------------
\30\ Stephen Ross. Alcohol Use Disorders in the Elderly.
Psychiatry Weekly (no date). Available at: https://www.psychweekly.com/aspx/article/ArticleDetail.aspx?articleid=19.
---------------------------------------------------------------------------
For these reasons, we included the SUB-2/SUB-2a measure set in our
``List of Measures under Consideration for December 1, 2014.'' The MAP
provided input on the measure set and supported its inclusion in the
IPFQR Program in its report ``Process and Approach for MAP Pre-
Rulemaking Deliberations 2015'' available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=78711. Moreover, this measure set
is NQF-endorsed for the IPF setting, in conformity with the statutory
criteria for measure selection under section 1886(s)(4)(D)(i) of the
Act.
We invite public comments on our proposal to adopt the SUB-2/SUB-2a
measure set for the FY 2018 payment determination and subsequent years.
3. Transition Record With Specified Elements Received by Discharged
Patients (Discharges from an Inpatient Facility to Home/Self Care or
Any Other Site of Care) (NQF #0647) and Removal of HBIPS-6
Effective and timely communication of a patient's clinical status
and other relevant information at the time of discharge from an
inpatient facility is essential for supporting appropriate continuity
of care. Establishment of an effective transition from one treatment
setting to another is enhanced by providing patients and their
caregivers with sufficient information regarding treatment during
hospitalization. Receiving discharge instructions can assist the
patient in understanding how
[[Page 25050]]
to maintain and enhance his/her care when discharged to home or any
other site, and studies have shown that readmissions can be prevented
by providing detailed, personalized information to patients pre-
discharge.\31\
---------------------------------------------------------------------------
\31\ Jack BW, Chetty VK, Anthony D, et al. A reengineered
hospital discharge program to decrease rehospitalization. Ann Intern
Med 2009; 150:178-187.
---------------------------------------------------------------------------
The Transition Record with Specified Elements Received by
Discharged Patients (Discharges from on Inpatient Facility to Home/Self
Care or Any other Site of Care) measure is a chart-abstracted measure
that captures the ``[p]ercentage of patients, regardless of age,
discharged from an inpatient facility to home or other site of care, or
their caregiver(s), who received a transition record (and with whom a
review of all included information was documented) at the time of
discharge.'' \32\ At a minimum, the transition record should include:
---------------------------------------------------------------------------
\32\ Transition Record with Specified Elements Received by
Discharged Patients (Discharges from an Inpatient Facility to Home/
Self Care or Any Other Site of Care) Measure Specifications.
Available at https://www.qualityforum.org/Qps/0647.
---------------------------------------------------------------------------
Reason for inpatient admission;
Major procedures and tests performed during inpatient stay
and summary of results;
Principal diagnosis at discharge;
Current medication list;
Studies pending at discharge;
Patient instructions;
Advance directive or surrogate decision maker documented
or reason for not providing advance care plan;
24-hour/7-day contact information, including physician for
emergencies related to inpatient stay;
Contact information for obtaining results of studies
pending at discharge;
Plan for follow-up care; and
Primary physician, other health care professional, or site
designated for follow-up care.\33\
---------------------------------------------------------------------------
\33\ Ibid.
---------------------------------------------------------------------------
The measure was developed by the American Medical Association--
convened Physician Consortium for Performance Improvement (AMA-convened
PCPI), ``a national, physician-led initiative dedicated to improving
patient health and safety.'' \34\ For more information on this measure,
including its specifications, we refer the readers to the AMA-convened
PCPI list of measures at https://www.qualityforum.org/Qps/0647.
---------------------------------------------------------------------------
\34\ See https://www.ama-assn.org/ama/pub/physician-resources/physician-consortium-performance-improvement/about-pcpi.page? The
AMA-PCPI ``is nationally recognized for measure development,
specification and testing of measures, and enabling use of measures
in electronic health records (EHRs) . . . [the organization]
develops, tests, implements and disseminates evidence-based measures
that reflect the best practices and best interest of medicine . .
.''
---------------------------------------------------------------------------
The Transition Record with Specified Elements Received by
Discharged Patients (Discharges from an Inpatient Facility to Home/Self
Care or Any other Site of Care) measure seeks to prevent gaps in care
transitions caused by the patient receiving inadequate or insufficient
information that lead to avoidable adverse events and cost CMS
approximately $15 billion due to avoidable patient readmissions.\35\
---------------------------------------------------------------------------
\35\ Medicare Payment Advisory Commission. Promoting Greater
Efficiency in Medicare. June 2007. Available at: https://www.medpac.gov/documents/reports/Jun07_EntireReport.pdf.
---------------------------------------------------------------------------
We believe that public reporting of this measure would afford
patients and their families or caregivers useful information in
choosing among different facilities and would promote the National
Quality Strategy priority of Communication and Care Coordination. As
articulated by HHS, ``Care coordination is a conscious effort to ensure
that all key information needed to make clinical decisions is available
to patients and providers. It is defined as the deliberate organization
of patient care activities between 2 or more participants involved in a
patient's care to facilitate appropriate delivery of health care
services.'' \36\ This proposed measure would promote appropriate care
coordination by specifying that patients discharged from an inpatient
facility receive relevant and meaningful transition information. This
measure also would promote Person and Family Engagement, ``a set of
behaviors by patients, family members, and health professionals and a
set of organizational policies and procedures that foster both the
inclusion of patients and family members as active members of the
health care team and collaborative partnerships with providers and
provider organizations.'' \37\ This proposed measure would inform
patients of their status at discharge, empowering them to become active
members in their care. Additionally, the inclusion in this measure of
an advance care plan would support open communication of the patient's,
and his/her caregiver's/surrogate's, wishes, resulting in improved
patient-provider communication.
---------------------------------------------------------------------------
\36\ US DHHS. ``National Healthcare Disparities Report 2013.''
Available at: https://www.ahrq.gov/research/findings/nhqrdr/nhdr13/chap7.html.
\37\ Guide to Patient and Family Engagement: Environmental Scan
Report. May 2012. Agency for Healthcare Research and Quality.
Rockville, MD. Available at: https://www.ahrq.gov/research/findings/final-reports/ptfamilyscan/ptfamily1.html.
---------------------------------------------------------------------------
For these reasons, we included this measure in our ``List of
Measures under Consideration for December 1, 2014.'' The MAP provided
input on the measure and supported its inclusion in the IPFQR Program
in its report ``Process and Approach for MAP Pre-Rulemaking
Deliberations 2015'' available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=78711. In addition, the MAP had
previously suggested this measure as one that could fill a gap in
communication between the provider and patient at discharge \38\ and
recommended that the measure be used for dual eligible patients (that
is, patients with both Medicare and Medicaid coverage), who comprise a
significant beneficiary population served within IPFs.\39\ Moreover,
this measure set is NQF-endorsed for the IPF setting, in conformity
with the statutory criteria for measure selection under section
1886(s)(4)(D)(i) of the Act.
---------------------------------------------------------------------------
\38\ https://www.qualityforum.org/Publications/2012/10/MAP_Families_of_Measures.aspx.
\39\ https://www.qualityforum.org/Publications/2014/08/2014_Input_on_Quality_Measures_for_Dual_Eligible_Beneficiaries.aspx.
---------------------------------------------------------------------------
If finalized, we propose that this measure would replace the
existing HBIPS-6 Post-Discharge Continuing Care Plan measure.\40\ We
believe that the Transition Record with Specified Elements Received by
Discharged Patients (Discharges from an Inpatient Facility to Home/Self
Care or Any Other Site of Care) measure is a more effective and robust
measure than HBIPS-6 for use in the IPF setting. Specifically, HBIPS-6
requires discharge plans to only have 4 components:
---------------------------------------------------------------------------
\40\ In the FY 2013 IPPS/LTCH PPS final rule, we adopted HBIPS-
6, beginning with the FY 2014 payment determination (77 FR 53650-
53651). We refer readers to that rule for a detailed discussion of
this measure.
---------------------------------------------------------------------------
Reason for hospitalization;
Principal diagnosis;
Discharge medications; and
Next level of care recommendations.\41\
---------------------------------------------------------------------------
\41\ See https://manual.jointcommission.org/releases/TJC2014A1/.
---------------------------------------------------------------------------
In contrast, the Transition Record with Specified Elements Received
by Discharged Patients (Discharges from an Inpatient Facility to Home/
Self Care or Any Other Site of Care) measure requires additional
elements, including those described below, which are intended to
improve quality of care, decrease costs, and increase beneficiary
engagement.
First, the proposed measure requires the provider to communicate
both studies pending at discharge as well as contact information so
that patients or their families can obtain the results of those
studies. Approximately 40 percent of discharged patients have test
results
[[Page 25051]]
that are pending and about a quarter of such test results require
further action that, if not taken in a timely manner, could result in
potentially avoidable negative outcomes.\42\ HBIPS-6 does not require
providers to specify studies pending at discharge.
---------------------------------------------------------------------------
\42\ Kripalani S, LeFevre F, Phillips CO, et al. Deficits in
communication and information transfer between hospital based and
primary care physicians: implications for patient safety and
continuity of care. JAMA2007;297(8):831-841.
---------------------------------------------------------------------------
Second, the transition record is also required to contain a list of
major procedures and tests that were performed during the
hospitalization and summary results. HBIPS-6 does not include this
requirement. We believe it is important for a patient to understand
which tests were performed on him/her and for what purpose,
understanding the outcome and consequences of these tests. This
knowledge may serve to empower patients to seek additional care or
follow-up when necessary, reducing the risk of avoidable consequences
and readmissions.
Third, the transition record in the proposed measure is required to
include patient instructions while HBIPS-6 has no such requirement.
Without instructions, the patient may not take the necessary steps for
recovery, leading to complications and/or readmissions.
Fourth, the proposed measure requires both of the following: (1)
24-hour/7-day contact information including physicians for emergencies
related to inpatient stay; and (2) the primary physician, other health
care professional, or sites designated for follow-up care. HBIPS-6 does
not have these requirements. Again, this information can lead to
reduced complications and an increased likelihood of appropriate
follow-up care, resulting in reduced readmissions.
Finally, the elements required for the proposed transition record
measure are far better aligned than HBIPS-6 with the elements required
in the Summary of Care record required by the Electronic Health Record
(EHR) Incentive Program for eligible hospitals and critical access
hospitals and with the guidance on discharge planning provided by the
Medicare Learning Network available at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Discharge-Planning-Booklet-ICN908184.pdf.
In summary, we believe that the Transition Record with Specified
Elements Received by Discharged Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other Site of Care) measure is more
robust than HBIPS-6 because it includes these and other elements that
are currently absent from HBIPS-6. Therefore, we propose to adopt the
Transition Record with Specified Elements Received by Discharged
Patients (Discharges from an Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure for the FY 2018 payment determination
and subsequent years, and, if adopted, to remove HBIPS-6. We invite
public comments on these proposals.
4. Timely Transmission of Transition Record (Discharges From an
Inpatient Facility to Home/Self Care or Any Other Site of Care) (NQF
#0648) and Removal of HBIPS-7
The literature shows infrequent communication between hospital
physicians and primary care practitioners and that the availability of
discharge summaries at the patient's first post-discharge visit with
the primary care practitioner is low, which affects the quality of care
provided to patients.\43\ The Timely Transmission of Transition Record
(Discharges from an Inpatient Facility to Home/Self Care or Any Other
Site of Care) measure (NQF #0648) is a chart-abstracted measure
developed by AMA-convened PCPI to narrow gaps in care transition that
result in adverse health outcomes for patients and cost CMS about $15
billion due to readmissions,\44\ as discussed above. This measure
captures the ``[p]ercentage of patients, regardless of age, discharged
from an inpatient facility to home or any other site of care for whom a
transition record was transmitted to the facility or primary physician
or other health care professional designated for follow-up care within
24 hours of discharge.'' \45\ For more information on this measure,
including its specifications, we refer the readers to https://www.qualityforum.org/Qps/0648.
---------------------------------------------------------------------------
\43\ Kripalani S, LeFevre F, Phillips CO, et al. Deficits in
communication and information transfer between hospital based and
primary care physicians: implications for patient safety and
continuity of care. JAMA 2007;297(8):831-841.
\44\ Medicare Payment Advisory Commission. Promoting Greater
Efficiency in Medicare. June 2007. Available at: https://www.medpac.gov/documents/reports/Jun07_EntireReport.pdf.
\45\ Timely Transmission of Transition Record (Discharged from
Inpatient Facility to Home/Self Care or Any Other Site of Care),
available at https://www.ama-assn.sorg/apps/listserv/x-check/qmeasure.cgi?submit=PCPI.
---------------------------------------------------------------------------
We believe that public reporting of this measure will afford
consumers, and their families or caregivers, useful information in
choosing among different facilities because it communicates how quickly
a summary of the patient's record will be transmitted to his or her
other treating facilities and physicians, improving care, as outlined
above. We further believe that this measure will promote the National
Quality Strategy priority of Communication and Care Coordination. As
discussed above, according to HHS, ``Care coordination is a conscious
effort to ensure that all key information needed to make clinical
decisions is available to patients and providers. It is defined as the
deliberate organization of patient care activities between 2 or more
participants involved in a patient's care to facilitate appropriate
delivery of health care services.'' \46\ This proposed measure enables
a patient's primary care physician or other healthcare practitioner to
timely receive a transition record of the inpatient hospitalization.
---------------------------------------------------------------------------
\46\ US DHHS. ``National Healthcare Disparities Report 2013.''
Available at: https://www.ahrq.gov/research/findings/nhqrdr/nhdr13/chap7.html.
---------------------------------------------------------------------------
For these reasons, we included this measure in our ``List of
Measures under Consideration for December 1, 2014.'' The MAP provided
input on the measure and supported its inclusion in the IPFQR Program
(https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=78711). In addition, the MAP had
previously suggested this measure as one that could fill a gap in
communication \47\ and recommended that the measure be used for dual
eligible patients (that is, patients with both Medicare and Medicaid
coverage), who comprise a significant beneficiary population served
within IPFs.\48\ Moreover, this measure set is NQF-endorsed for the IPF
setting, in conformity with the statutory criteria for measure
selection under section 1886(s)(4)(D)(i) of the Act.
---------------------------------------------------------------------------
\47\ https://www.qualityforum.org/Publications/2012/10/MAP_Families_of_Measures.aspx.
\48\ https://www.qualityforum.org/Publications/2014/08/2014_Input_on_Quality_Measures_for_Dual_Eligible_Beneficiaries.aspx.
---------------------------------------------------------------------------
If finalized, we propose that this measure would replace the
existing HBIPS-7 Post Discharge Continuing Care Plan Transmitted to the
Next Level of Care Provider Upon Discharge measure.\49\ HBIPS-7
requires that the continuing care plan be transmitted to the next care
provider no later than the fifth day post discharge.\50\ The Timely
Transmission of Transition Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other Site of Care) measure requires
transmission to the next level of care within 24 hours
[[Page 25052]]
of discharge. More timely communication of vital information regarding
the inpatient hospitalization results in better care, reduction of
systemic medical errors, and improved patient outcomes. Studies show
that the risks of re-hospitalization are lower when primary care
providers have access to patients' post-discharge records at the first
post-discharge visit,51 52 which may be within a
day (or days) of discharge. Critically, the availability of the
discharge record to the next level provider within 24 hours after
discharge supports more effective care coordination and patient safety,
since a delay in communication can result in medication or treatment
errors. Thus, we believe that replacing HBIPS-7 with the Timely
Transmission of Transition Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other Site of Care) measure would
increase the quality of care provided to patients, reduce avoidable
readmissions, and increase patient safety.
---------------------------------------------------------------------------
\49\ In the FY 2013 IPPS/LTCH PPS final rule, we adopted HBIPS-7
Post Discharge Continuing Care Plan Transmitted to the Next Level of
Care Provider Upon Discharge, beginning with the FY 2014 payment
determination (77 FR 53651-53652). We refer readers to that rule for
a detailed discussion of this measure.
\50\ https://manual.jointcommission.org/releases/TJC2014A1/.
\51\ van Walraven C, Seth R, Austin PC, Laupacis A. (2002).
Effect of discharge summary availability during postdischarge visits
on hospital readmission. Journal of General Internal Medicine
17:186-192.
\52\ Jack BW, Chetty VK, Anthony D, et al. (2009). A
reengineered hospital discharge program to decrease
rehospitalization. Ann Intern Med.150 (3),178-187.
---------------------------------------------------------------------------
We invite public comments on our proposals to adopt the Timely
Transmission of Transition Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other Site of Care) measure for the
FY 2018 payment determination and subsequent years and, if adopted, our
removal of HBIPS-7.
5. Screening for Metabolic Disorders
Studies show that both second generation antipsychotics (SGAs) and
antipsychotics increase the risk of metabolic syndrome.\53\ Metabolic
syndrome involves a cluster of conditions that occur together,
including excess body fat around the waist, high blood sugar, high
cholesterol, and high blood pressure, and increases the risk of
coronary artery disease, stroke, and type 2 diabetes. Recognizing this
problem, in February 2004, the American Diabetes Association (ADA), the
American Psychiatric Association (APA), the American Association of
Clinical Endocrinologists, and the North American Association for the
Study of Obesity released a consensus statement finding that the use of
SGAs ``have been associated with reports of dramatic weight gain,
diabetes (even acute metabolic decompensation, for example, diabetic
ketoacidosis [DKA]), and an atherogenic lipid profile (increased LDL
cholesterol and triglyceride levels and decreased HDL cholesterol) . .
. [and] [s]ubsequent drug surveillance and retrospective database
analyses suggest that there is an association between specific SGAs and
both diabetes and obesity.'' \54\ SGAs also have an effect on serum
lipids and could result in dyslipidemia.\55\ Given these concerns, the
group recommended that ``baseline screening measures be obtained
before, or as soon as clinically feasible after, the initiation of any
antipsychotic medication,'' including body mass index (BMI), blood
pressure, fasting plasma glucose, and fasting lipid profile.\56\
Although the consensus statement specifically discussed the issues with
SGAs, the ADA also emphasized that ``all patients receiving
antipsychotic medications [should] be screened'' \57\ and subsequent
studies have found that ``[i]n schizophrenic patients, the level of
lipid profile had been increased in both atypical and conventional
antipsychotic users'' \58\
---------------------------------------------------------------------------
\53\ The American Diabetes Association, APA, the American
Association of Clinical Endocrinologists, and the North American
Association for the Study of Obesity (2004). Consensus development
conference on antipsychotic drugs and obesity and diabetes. Diabetes
Care, 27, 596-601. Marder, Stephen R., M.D., et al. Physical Health
Monitoring of Patients with Schizophrenia. Am J Psychiatry. 2004
Aug;161(8):1334-49.
\54\ The American Diabetes Association, APA, the American
Association of Clinical Endocrinologists, and the North American
Association for the Study of Obesity (2004). Consensus development
conference on antipsychotic drugs and obesity and diabetes. Diabetes
Care, 27, 596-601.
\55\ Ibid.
\56\ Ibid.
\57\ The American Diabetes Association (2006). Antipsychotic
Medications and the Risk of Diabetes and Cardiovascular Disease.
Available at: https://professional.diabetes.org/admin/UserFiles/file/CE/AntiPsych%20Meds/Professional%20Tool%20%231(1).pdf (emphasis
added).
\58\ Roohafsza, H, Khani, A, Afshar, H, Garakyaraghi, A, Ghodsi,
B. Lipid profile in antipsychotic drug users: A comparative study.
ARYA Atheroscler. May 2013; 9(3): 198-202 (emphasis added).
---------------------------------------------------------------------------
Numerous other organizations have also made similar
recommendations.\59\ For example, the National Association of State
Mental Health Program Directors Medical Directors Council notes, ``the
second generation antipsychotic medications have become more highly
associated with weight gain, diabetes, dyslipidemia, insulin
resistance, and the metabolic syndrome.'' They recommend the same
screening as the consensus statement (BMI, blood pressure, fasting
plasma glucose, and fasting lipid profile) and emphasize that this
screening is ``the standard of care for the general population.'' \60\
Likewise, the Mount Sinai Conference,\61\ convened in 2002, recommended
that, for every patient with schizophrenia, ``regardless of the
antipsychotic prescribed,'' mental health providers should, among other
things: (1) Monitor and chart BMI; (2) measure plasma glucose levels
(fasting or HbA1c); and (3) obtain a lipid profile.\62\
---------------------------------------------------------------------------
\59\ De Hert, M., Dekker, J.M. & Wood, D. (2009). Cardiovascular
disease and diabetes in people with severe mental illness. Position
statement from the European Psychiatric Association (EPA), supported
by the European Association for the Study of Diabetes (EASD) and the
European Society of Cardiology (ESC). Eur Psychiatry, 24, 412-424;
Zolnierek, C.D. (2009). Non-psychiatric hospitalization of people
with mental illnesses: A systematic review. Journal of Advanced
Nursing, 65(8), 1570-1583.
\60\ National Association of State Mental Health Program
Directors Medical Directors Council (2006). Morbidity and mortality
in people with serious mental illness. Available at: https://www.nasmhpd.org/docs/publications/MDCdocs/Mortality%20and%20Morbidity%20Final%20Report%208.18.08.pdf.
\61\ The Mount Sinai Conference was conferred to ``focus on
specific questions regarding the pharmacotherapy of schizophrenia .
. . Participants in the conference were selected based on their
knowledge of and contributions to the literature in this area . . .
Also in attendance [were] various groups concerned with improving
psychopharmacology in routine practice settings.'' Marder, Stephen
R., M.D., et al. Physical Health Monitoring of Patients with
Schizophrenia. Am J Psychiatry. 2004 Aug;161(8):1334-49.
\62\ Marder, Stephen R., M.D., et al. Physical Health Monitoring
of Patients with Schizophrenia. Am J Psychiatry. 2004
Aug;161(8):1334-49.
---------------------------------------------------------------------------
Despite these consensus statements and guidelines, many of which
are over a decade old, screening for metabolic syndrome remains low and
there appears to be disagreement regarding where the responsibility for
this screening lies.\63\ Studies show a systematic lack of metabolic
risk monitoring of patients who have been prescribed
antipsychotics.\64\ Screening for metabolic syndrome may reduce the
risk of preventable adverse events and improve the physical health
status of the patient. Therefore, we believe it is necessary to include
a measure of metabolic syndrome screening in the IPFQR Program.
---------------------------------------------------------------------------
\63\ See e.g., Brooks, Megan. ``Metabolic Screening in
Antipsychotic Users: Whose Job Is It?'' Medscape Medical News. 8 May
2012. Available at https://www.medscape.com/viewarticle/763468.
Mittal D, Li C, Viverito K, Williams JS, Landes RD, Thapa PB, Owen
R. Monitoring for metabolic side effects among outpatients with
dementia receiving antipsychotics. Psychiatr Serv. 2014 Sep
1;65(9):1147-53.
\64\ Nasrallah, H. A, MD (2012). There is no excuse for failing
to provide metabolic monitoring for patients receiving
antipsychotics. Current Psychiatry, 4 (citing Mitchell AJ, Delaffon
V, Vancampfort D, et al. Guideline concordant monitoring of
metabolic risk in people treated with antipsychotic medication:
systematic review and meta-analysis of screening practices. Psychol
Med. 2012;42(1):125-147.)
---------------------------------------------------------------------------
The Screening for Metabolic Disorders measure is a chart-abstracted
measure
[[Page 25053]]
developed by CMS and defined as a percentage of discharges from an IPF
for which a structured metabolic screening for 4 elements was completed
in the past year. The denominator includes IPF patients discharged with
one or more routinely scheduled antipsychotic medications during the
measurement period. The numerator is the total number of patients who
received a metabolic screening either prior to, or during, the index
IPF stay. The screening must contain four tests: (1) BMI; (2) blood
pressure; (3) glucose or HbA1c; and (4) a lipid panel--which includes
total cholesterol (TC), triglycerides (TG), high density lipoprotein
(HDL), and low density lipoprotein (LDL-C) levels. The screening must
have been completed at least once in the 12 months prior to the
patient's date of discharge. Screenings can be conducted either at the
reporting facility or another facility for which records are available
to the reporting facility. The following patients are excluded from the
measure: (1) Patients for whom a screening could not be completed
within the stay due to the patient's enduring unstable medical or
psychological condition; and (2) patients with a length of stay equal
to or greater than 365 days, or less than 3 days. In section F.3.
below, we propose a sampling methodology for this and certain other
measures.
Testing of this measure demonstrated that performance on the
metabolic screening measure was low, on average, across the tested
IPFs. The measure's average performance rate of 42 percent signals a
strong opportunity for improvement. During testing, the metabolic
screening measure also demonstrated nontrivial variation in performance
among IPFs (6.2-98.6 percent). In addition, it demonstrated near-
perfect agreement between chart abstractors (kappa of 0.93 for the
measure numerator).\65\
---------------------------------------------------------------------------
\65\ Development of Quality Measures for Inpatient Psychiatric
Facilities. February 2015. U.S. Department of Health and Human
Services, Assistant Secretary for Planning and Evaluation, Office of
Disability, Aging, and Long-term Care Policy. Page xi, at https://aspe.hhs.gov/daltcp/reports/2015/ipf.cfm.
---------------------------------------------------------------------------
We included the Screening for Metabolic Disorders measure (then
titled ``IPF Metabolic Screening'') in our ``Measures Under
Consideration List'' in December 2013. The MAP did not recommend this
measure, noting, ``a different NQF-endorsed measure better addresses
the needs of the program.'' \66\ However, the different NQF-endorsed
measure was not identified by the MAP, and we are unaware of any
screening measures for metabolic syndrome that are NQF-endorsed. We
note that, when presented to the MAP, the denominator for this measure
was the ``total number of psychiatric inpatients admitted during the
measurement period.'' Based on testing and further feedback on the
measure, we revised the measure by reducing its application to only
those patients on antipsychotic medication; the denominator for the
measure is now ``IPF patients discharged with one or more routinely
scheduled antipsychotic medications during the measurement period.'' We
believe that this change was appropriate because, as discussed above,
the patients most at risk for metabolic syndrome are those receiving
antipsychotics and the APA and other consensus organizations recommend
this screening for patients on antipsychotics. Furthermore, by limiting
the application of the measure only to those receiving antipsychotics,
we believe that we have reduced provider burden, both in terms of
possible changes in practice that might result from the measure, as
well as the direct burden resulting from its collection and reporting.
---------------------------------------------------------------------------
\66\ MAP 2014 Recommendations on Measures for More than 20
Federal Programs, 179, at https://www.qualityforum.org/Publications/2014/01/MAP_Pre-Rulemaking_Report__2014_Recommendations_on_Measures_for_More_than_20_Federal_Programs.aspx.
---------------------------------------------------------------------------
We believe that this measure promotes the National Quality Strategy
priority of Making Care Safer, which seeks to reduce risk that is
caused by the delivery of healthcare. As discussed above,
antipsychotics have been shown to be related to metabolic syndrome. The
Screening for Metabolic Disorders measure is aimed at the prevention
and treatment of serious side effects of these drugs.
Section 1886(s)(4)(D)(ii) of the Act authorizes the Secretary to
specify a measure that is not endorsed by NQF as long as due
consideration is given to measures that have been endorsed or adopted
by a consensus organization identified by the Secretary. We have been
unable to identify any measures addressing screening for metabolic
syndrome for the IPF setting that have been endorsed by the NQF or
adopted by any other consensus organization. We believe the proposed
measure for the Screening for Metabolic Disorders meets the measure
selection exception requirement under section 1886(s)(4)(D)(ii) of the
Act.
We invite public comments on our proposal to adopt this measure for
the FY 2018 payment determination and subsequent years.
6. Summary of Measures Proposed for Adoption and Removal for FY 2018
and Subsequent Years
The measures that we are proposing to add to the IPFQR Program for
the FY 2018 payment determination and subsequent years are set forth in
Table 20, below.
Table 20--IPFQR Program Measures Proposed for the FY 2018 Payment Determination and Subsequent Years
----------------------------------------------------------------------------------------------------------------
National Quality Strategy priority NQF No. Measure ID Measure
----------------------------------------------------------------------------------------------------------------
Effective Prevention and Treatment.... 1656 TOB-3 and TOB-3a......... Tobacco Use Treatment
Provided or Offered at
Discharge and the subset
measure Tobacco Use
Treatment at Discharge.
Effective Prevention and Treatment.... 1663 SUB-2 and SUB-2a......... Alcohol Use Brief
Intervention Provided or
Offered and SUB-2a Alcohol
Use Brief Intervention.
Communication and Care Coordination; 0647 N/A...................... Transition Record with
Person and Family Engagement. Specified Elements Received
by Discharged
Patients (Discharges from an
Inpatient Facility to Home/
Self Care or
Any Other Site of Care).
Communication and Care Coordination... 0648 N/A...................... Timely Transmission of
Transition Record
(Discharges from an
Inpatient Facility to Home/
Self Care or Any Other Site
of Care).
[[Page 25054]]
Making Care Safer..................... N/A N/A...................... Screening for Metabolic
Disorders.
----------------------------------------------------------------------------------------------------------------
The measures that we are proposing to remove beginning with the FY
2018 payment determination are set forth in Table 21, below.
Table 21--IPFQR Program Measures Proposed To Be Removed for the FY 2018
Payment Determination and Subsequent Years
------------------------------------------------------------------------
NQF No. Measure ID Measure
------------------------------------------------------------------------
0557..................... HBIPS-6............ Post-Discharge
Continuing Care Plan
(Removal of measure
contingent upon
adoption of proposed
measure, Transition
Record with Specified
Elements Received by
Discharged Patients
(Discharges from an
Inpatient Facility to
Home/Self Care or
Any Other Site of
Care)).
0558..................... HBIPS-7............ Post Discharge
Continuing Care Plan
Transmitted to the Next
Level of Care Provider
Upon Discharge (Removal
of measure contingent
upon adoption of
proposed measure,
Timely Transmission of
Transition Record
(Discharges from an
Inpatient Facility to
Home/Self Care or Any
Other Site of Care)).
------------------------------------------------------------------------
If these proposals are adopted, the number of measures for the FY
2018 IPFQR Program would total 16, as set forth in Table 22, below.
Table 22--Previously Adopted and Proposed Measures for FY 2018 and
Subsequent Years
------------------------------------------------------------------------
NQF No. Measure ID Measure
------------------------------------------------------------------------
0640..................... HBIPS-2............ Hours of Physical
Restraint Use.
0641..................... HBIPS-3............ Hours of Seclusion Use.
0560..................... HBIPS-5............ Patients Discharged on
Multiple Antipsychotic
Medications with
Appropriate
Justification.
0576..................... FUH................ Follow-up After
Hospitalization for
Mental Illness.
1661..................... SUB-1.............. Alcohol Use Screening.
1663..................... SUB-2 and SUB-2a... Alcohol Use Brief
Intervention Provided
or Offered and SUB-2a
Alcohol Use Brief
Intervention.*
1651..................... TOB-1.............. Tobacco Use Screening.
1654..................... TOB-2.............. Tobacco Use Treatment
Provided or Offered and
TOB-2a............. Tobacco Use Treatment.
1656..................... TOB-3 and TOB-3a... Tobacco Use Treatment
Provided or Offered at
Discharge and the
subset measure Tobacco
Use Treatment at
Discharge.*
1659..................... IMM-2.............. Influenza Immunization.
0647..................... N/A................ Transition Record with
Specified Elements
Received by Discharged
Patients (Discharges
from an Inpatient
Facility to Home/Self
Care or Any Other Site
of Care).*
0648..................... N/A................ Timely Transmission of
Transition Record
(Discharges from an
Inpatient Facility to
Home/Self Care or Any
Other Site of Care).*
N/A...................... N/A................ Screening for Metabolic
Disorders.*
N/A...................... N/A................ Influenza Vaccination
Coverage Among
Healthcare Personnel.
N/A...................... N/A................ Assessment of Patient
Experience of Care.
N/A...................... N/A................ Use of an Electronic
Health Record.
------------------------------------------------------------------------
* Measures proposed for the FY 2018 payment determination and future
years.
E. Possible IPFQR Program Measures and Topics for Future Consideration
As we have previously indicated (79 FR 45974 through 45975), we
seek to develop a comprehensive set of quality measures to be available
for widespread use for informed decision-making and quality improvement
in the IPF setting. Therefore, through future rulemaking, we intend to
propose new measures that will help further our goals of achieving
better health care and improved health for Medicare beneficiaries who
obtain inpatient psychiatric services through the widespread
dissemination and use of quality information.
We are developing a 30-day psychiatric readmission measure that is
similar to the readmission measures currently in use for other CMS
quality reporting programs, such as the Hospital Inpatient Quality
Reporting Program. We anticipate that we will recommend additional
measures for development or adoption in the future. We intend to
develop a measure set that effectively assesses IPF quality across the
range of services and diagnoses, encompasses all of the goals of the
CMS quality strategy, addresses measure gaps identified by the MAP and
others, and minimizes collection and reporting burden. We may also
propose the removal of some measures in the future.
We invite public comment on measures that we should consider.
F. Changes to Reporting Requirements
We are proposing to make the following changes to our reporting
requirements for FY 2017 and subsequent years:
[[Page 25055]]
Requiring that measures be reported as a single yearly
count rather than by quarter and age; and
Requiring that aggregate population counts be reported as
a single yearly number rather than by quarter.
For FY 2018 and subsequent years we are also proposing to make one
change, allowing uniform sampling requirements for certain measures.
1. Proposed Changes to Reporting by Age and Quarter for FY 2017 Payment
Determination and Subsequent Years
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53655 through
53656), we finalized our policy that IPFs must submit data for chart-
abstracted measures to the Web-Based Measures Tool on an annual basis
aggregated by quarter. We also finalized our policy that IPFs must
submit data as required by The Joint Commission, which calls for IPFs
to submit data for measures by age group. Since then, we have learned
that obtaining data for each quarter and by age is burdensome to
providers and the resultant number of cases is often too small to allow
public reporting. That is, we do not report data on Hospital Compare
for measures with fewer than 11 cases; reporting by age and quarter
often causes the number of cases to fall below 11. For example, for
HBIPS-5, in Quarter 2 of 2013, only 5.75 percent of the data were
reportable. Likewise, in Quarter 3 and Quarter 4 of 2013, for HBIPS-5,
only 5.5 percent of the data were reportable.
Therefore, beginning with FY 2017, we propose to require facilities
to report data for chart-abstracted measures to the Web-Based Measures
Tool on an aggregate basis by year, rather than by quarter, and to
discontinue the requirement for reporting by age group. If adopted, we
would require IPFs to report a single aggregate measure rate for each
measure annually for each payment determination.
We believe that this change would reduce provider burden because
IPFs would report a single rate for each measure. In addition, we do
not believe that quarterly data or data stratified by age are necessary
for quality improvement activities. We are able to differentiate, and
the public is able to view on Hospital Compare, those IPFs that perform
well on measures from those for which quality improvement activities
may be necessary based on an annual aggregate rate submission. We note,
however, that in the future, if our evolving measures set, quality
improvement goals, and experience with the program indicate a change is
needed, we may reevaluate and reinstate the requirement for quarterly
reporting.
In Table 23, below, we set forth the proposed quality reporting and
submission timelines for the FY 2017 payment determination and
subsequent years for all the measures except FUH and the Influenza
Vaccination Coverage among Healthcare Personnel measures. We note that
FUH is claims-based, and therefore does not require additional data
submission. The Influenza Vaccination Coverage among Healthcare
Personnel measure is reported to the Centers for Disease Control and
Prevention, and we refer readers to the FY 2015 IPF PPS final rule for
more information on the reporting timeline for this measure (79 FR
45969).
Table 23--Proposed Quality Reporting Periods and Timeframes for the FY
2017 Payment Determination and Subsequent Years
------------------------------------------------------------------------
Reporting period for Data submission
Payment determination (FY) services provided timeframe
------------------------------------------------------------------------
2017........................ January 1, 2015- July 1, 2016-August
December 31, 2015. 15, 2016.
------------------------------------------------------------------------
We invite public comment on this proposal.
2. Proposed Changes To Aggregate Population Count Reporting for FY 2017
Payment Determination and Subsequent Years
In the FY 2015 IPF PPS final rule (79 FR 45973), we finalized our
policy that IPFs must submit aggregate population counts for Medicare
and non-Medicare discharges by age group, diagnostic group, and
quarter, and sample size counts for measures for which sampling is
performed. In section V.F.1. of this proposed rule, we are proposing to
only require measure reporting as an annual aggregate rate, rather than
by quarter. Likewise, beginning with the FY 2017 payment determination,
we propose to require non-measure data to be reported as an aggregate,
yearly count rather. We invite public comment on this proposal.
3. Proposed Changes to Sampling Requirements for FY 2018 Payment
Determination and Subsequent Years
Measure specifications for the measures that we have adopted and
propose to adopt allow sampling for some measures; however, for other
measures, IPFs must report data for all discharges/patients. In
addition, the sampling requirements sometimes vary by measure. In
response to these policies, in the FY 2014 IPPS/LTCH PPS final rule,
some commenters noted that different sampling requirements in the
measures could increase burden on facilities because these differences
would require IPFs to have varying policies and procedures in place for
each measure (78 FR 50901). Although we stated our belief that the
importance of these measures and of gathering information for all
discharges/patients outweighs the burden of various sampling
requirements, we now believe that the additional measures proposed in
this proposed rule tip the balance of benefit and burden. Therefore,
and for the reasons provided below, we are proposing to allow a uniform
sampling methodology both for measures that require sampling and for
certain other measures. Specifically, we propose to allow The Joint
Commission/CMS Global Initial Patient Population sampling in Section
2.9_Global Initial Patient Population found at https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228773989482. If this proposal is finalized, it will allow IPFs to take one,
global sample for all measures specified in Table 24, thereby
decreasing burden on these facilities and streamlining policies and
procedures.
In our current and proposed measure set, the measures for which we
propose to allow The Joint Commission/CMS Global sampling would include
those outlined in Table 24, below.
Table 24--Measures to Which Proposed Sampling Applies *
------------------------------------------------------------------------
NQF No. Measure ID Measure
------------------------------------------------------------------------
0560..................... HBIPS-5............ Patients Discharged on
Multiple Antipsychotic
Medications with
Appropriate
Justification.
[[Page 25056]]
1661..................... SUB-1.............. Alcohol Use Screening.
1663..................... SUB-2 and SUB-2a... Alcohol Use Brief
Intervention Provided
or Offered and SUB-2a
Alcohol Use Brief
Intervention.**
1651..................... TOB-1.............. Tobacco Use Screening.
1654..................... TOB-2.............. Tobacco Use Treatment
TOB-2a............. Provided or Offered and
Tobacco Use Treatment.
1656..................... TOB-3 and TOB-3a... Tobacco Use Treatment
Provided or Offered at
Discharge and the
subset measure Tobacco
Use Treatment at
Discharge.**
1659..................... IMM-2.............. Influenza Immunization.
0647..................... N/A................ Transition Record with
Specified Elements
Received by Discharged
Patients (Discharges
from an Inpatient
Facility to Home/Self
Care or Any Other Site
of Care).**
0648..................... N/A................ Timely Transmission of
Transition Record
(Discharges from an
Inpatient Facility to
Home/Self Care or Any
Other Site of Care).**
N/A...................... N/A................ Screening for Metabolic
Disorders.**
------------------------------------------------------------------------
* Measures proposed for removal have not been included in this table. If
these measures (HBIPS-4, HBIPS-6, and HBIPS-7) are not removed, the
sampling methodology would also apply to their collection and
submission.
** Measures proposed for the FY 2018 payment determination and future
years.
In section F.1. of this proposed rule, we are proposing to require
reporting on measures as a yearly count rather than by quarter. Because
The Joint Commission/CMS Global sampling guidelines specify sampling by
quarter, we propose to modify their sampling guidelines by multiplying
the ``number of cases in the initial patient population'' and the
``number of cases to be sampled'' by 4. In addition, since we require
all IPFs to report data on all chart-abstracted measures even when the
population size for a given measure is small or zero (78 FR 50901), we
have modified the table to require reporting regardless of the number
of cases. Thus, we propose the following sampling guidelines for the
measures above:
------------------------------------------------------------------------
Number of cases in initial patient
population Number of records to be sampled
------------------------------------------------------------------------
[gteqt] 6,117........................ 1,224.
3,057-6,116.......................... 20% of initial patient
population.
609-3,056............................ 609.
0-608................................ All cases.
------------------------------------------------------------------------
As stated above, we believe this proposal will simplify processes
and procedures for IPFs because uniform requirements will promote
streamlined procedures and reporting. We also believe the proposal will
decrease burden by allowing IPFs to identify a single, initial patient
population for all of the measures specified in Table 24 from which to
calculate the sample size. Furthermore, we do not believe this approach
will reduce quality improvement. Sampling calculations ensure that
enough data are represented in the sample to determine accurate measure
rates. Therefore, even with sampling, we believe that CMS, IPFs, and
the public would be able to differentiate those IPFs who perform well
on measures from those who do not.
We invite public comment on this proposal, which would begin with
the FY 2018 payment determination.
G. Public Display and Review Requirements
We are not proposing any changes to the public display and review
requirements for the FY 2018 payment determination and subsequent years
and refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50897
through 50898) for more information.
H. Form, Manner, and Timing of Quality Data Submission
1. Procedural and Submission Requirements
We are not proposing any changes to the procedural and submission
requirements for the FY 2018 payment determination and subsequent years
and refer readers to the FY 2014 IPPS/LTCH PPS final rule (77 FR 50898
through 50899) for more information on these previously finalized
requirements.
2. Proposed Change to the Reporting Periods and Submission Timeframes
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50901), we finalized
requirements for reporting periods and submission timeframes for the
IPFQR Program measures. We are proposing one change to these
requirements, as discussed above in section V.F.1. of this proposed
rule. Specifically, we are proposing to no longer require that measure
rates be reported quarterly and by age, but to only require an
aggregate, yearly count.
3. Population and Sampling
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53657 through 53658)
and FY 2014 IPPS/LTCH PPS final rule (78 FR 58901 through 58902), we
finalized policies for population, sampling, and minimum case
thresholds. We are proposing one change to these policies, as discussed
above in section V.F.3. of this proposed rule. Specifically, we are
proposing to allow uniform sampling on certain measures.
4. Data Accuracy and Completeness Acknowledgement (DACA) Requirements
We are not proposing any changes to the DACA requirements and refer
readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53658) for more
information on these requirements.
I. Reconsideration and Appeals Procedures
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53658 through
53660), we adopted a reconsideration process, later codified at Sec.
412.434, whereby IPFs can request a reconsideration of their payment
update reduction in the event that an IPF believes that its annual
payment update has been incorrectly reduced for failure to meet all
IPFQR Program requirements. We are not proposing any changes to the
Reconsideration and Appeals Procedure and refer readers to the FY 2013
IPPS/LTCH PPS final rule (77 FR 53658 through 53660) and the FY 2014
IPPS/LTCH PPS final rule (78 FR 50953) for further details on the
reconsideration process.
J. Exceptions to Quality Reporting Requirements
We are not proposing any changes to the exceptions to quality
reporting requirements and refer readers to the FY 2013 IPPS/LTCH PPS
final rule (77 FR 53659 through 53660), where we initially finalized
the policy as ``Waivers
[[Page 25057]]
from Quality Reporting,'' and the FY 2015 IPF PPS final rule (79 FR
45978), where we re-named the policy as ``Exceptions to Quality
Reporting Requirements'' for more information.
VI. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), we are required to
publish a 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval.
To fairly evaluate whether an information collection should be
approved by OMB, PRA section 3506(c)(2)(A) requires that we solicit
comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our burden estimates.
The quality, utility, and clarity of the information to be
collected.
Our effort to minimize the information collection burden
on the affected public, including the use of automated collection
techniques.
We are soliciting public comment on each of the section
3506(c)(2)(A)-required issues for the following information collection
requirements (ICRs).
A. Wage Estimates
We estimate that reporting data for the IPFQR Program measures can
be accomplished by staff with a mean hourly wage of $16.42 per
hour.\67\ Under OMB Circular A-76, in calculating direct labor,
agencies should not only include salaries and wages, but also ``other
entitlements'' such as fringe benefits.\68\ This Circular provides that
the civilian position full fringe benefit cost factor is 36.25 percent.
Therefore, using these assumptions, we estimate an hourly labor cost of
$22.37 ($16.42 base salary + $5.95 fringe). The following table
presents the mean hourly wage, the cost of fringe benefits (calculated
at 36.25 percent of salary), and the adjusted hourly wage.
---------------------------------------------------------------------------
\67\ https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.html.
\68\ https://www.whitehouse.gov/omb/circulars_a076_a76_incl_tech_correction.
----------------------------------------------------------------------------------------------------------------
Fringe benefit
Occupation title Occupation code Mean hourly (at 36.25% in $/ Adjusted hourly
wage ($/hr) hr) wage ($/hr)
----------------------------------------------------------------------------------------------------------------
Medical Records and Health Information 29-2071 16.42 5.95 $22.37
Technician.................................
----------------------------------------------------------------------------------------------------------------
The BLS is ``the principal Federal agency responsible for measuring
labor market activity, working conditions, and price changes in the
economy.'' \69\ Acting as an independent agency, the Bureau provides
objective information for not only the government, but also for the
public. The Bureau's National Occupational Employment and Wage
Estimates describes Medical Records and Health Information Technicians
as those responsible for organizing and managing health information
data. Therefore, we believe it is reasonable to assume that these
individuals would be tasked with abstracting clinical data for these
measures. In addition, the Hospital IQR Program uses this wage to
calculate its burden estimates.
---------------------------------------------------------------------------
\69\ https://www.bls.gov/bls/infohome.htm.
---------------------------------------------------------------------------
B. ICRs Regarding the Inpatient Psychiatric Facility Quality Reporting
(IPFQR) Program
We refer readers to the FY 2015 IPF PPS final rule (79 FR 45978
through 45980) for a detailed discussion of the burden for the program
requirements that we have previously adopted. Below, we discuss only
the changes in burden resulting from the provisions in this proposed
rule. Although we propose provisions that impact both the FY 2017 and
FY 2018 payment determinations, all of our proposals begin to apply to
facilities in FY 2016. For example, data collection for the proposed
measures begins in FY 2016, and the changes to the reporting
requirements take effect beginning with reporting that is required in
the summer of FY 2016. For purposes of calculating burden, we will
attribute the costs associated with the proposals to the year in which
these costs begin; for the purposes of all of the provisions in this
proposed rule, that year is FY 2016.
1. Changes in Time Required To Chart-Abstract Data Based on Proposed
Reporting Requirements
As discussed in section V.F. of this preamble, we are proposing the
following 3 changes regarding how facilities should report data for
IPFQR Program measures: (1) Measures must be reported as a single
yearly count rather than by quarter and age; (2) aggregate population
counts must be reported as a single yearly number rather than by
quarter; and (3) uniform sampling would be allowed for certain
measures.
We believe that these changes will lead to a decrease in burden
since facilities would only be required to enter one aggregate number
for both the numerator and denominator for each measure and will be
allowed to pull one sample used to calculate the measures specified in
Table 24 of this preamble. Consequently, we believe that the time
required to chart-abstract data for these measures would be reduced by
20 percent. Previously, we estimated 15 minutes to chart-abstract data
for each case (79 FR 45979). Because of our proposed changes to
sampling and reporting data, we are revising the figure and now
estimate 12 minutes (0.20 x 15 minutes), a change of -3 min or -0.05
hr.
2. Estimated Burden of IPFQR Program Proposals
In section V. of this preamble, we are proposing to adopt the
following five measures:
TOB-3--Tobacco Use Treatment Provided or Offered at
Discharge and the subset measure TOB-3a Tobacco Use Treatment at
Discharge (National Quality Forum (NQF) #1656);
SUB-2--Alcohol Use Brief Intervention Provided or Offered
and the subset measure SUB-2a (NQF #1663);
Transition Record with Specified Elements Received by
Discharged Patients (Discharges from an Inpatient Facility to Home/Self
Care or Any Other Site of Care) (NQF #0647);
Timely Transmission of Transition Record (Discharges from
an Inpatient Facility to Home/Self Care or Any Other Site of Care) (NQF
#0648); and
Screening for Metabolic Disorders.
In the same section, we are also proposing to remove the following
3 measures:
HBIPS-4 Patients Discharged on Multiple Antipsychotic
Medications;
Hospital Based Inpatient Psychiatric Services (HBIPS)-6
Post-Discharge Continuing Care Plan (NQF #0557), if Transition Record
with Specified Elements Received by Discharged Patients (Discharges
from an
[[Page 25058]]
Inpatient Facility to Home/Self Care or Any Other Site of Care) is
adopted; and
HBIPS-7 Post-Discharge Continuing Care Plan Transmitted to
the Next Level of Care Provider Upon Discharge (NQF #0558), if Timely
Transmission of Transition Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other Site of Care) (NQF #0648) is
adopted.
We believe that approximately 1,617 \70\ IPFs will participate in
the IPFQR Program for requirements occurring in FY 2016 and subsequent
years. Based on data from CY 2013, we believe that each facility will
submit measure data on approximately 431 \71\ cases per year.
Therefore, we estimate that adopting five measures and removing 3
measures (for a net result of 2 measures) will result in an increase in
burden of 172.4 hours per facility (2 measures x (431 cases/measure x
0.20 hours/case)) or 278,770.80 hours across all IPFs (172.4 hours/
facility x 1,617 facilities). The increase in costs is approximately
$3,856.59 per IPF ($22.37/hour x 172.4 hours) or $6,236,102.80 across
all IPFs (278,770.80 hours x $22.37/hour).
---------------------------------------------------------------------------
\70\ In the FY 2015 IPF PPS final rule we estimated 1,626 IPFs
and are adjusting that estimate by -9 to account for more recent
data.
\71\ In the FY 2015 IPF PPS final rule we estimated 556 cases
per year and are adjusting that estimate by -125 to account for more
recent data.
---------------------------------------------------------------------------
Consistent with our estimates in the FY 2015 IPF PPS final rule (79
FR 45979), we believe the estimated burden for training personnel on
our proposals for data collection and submission is 2 hours per
facility or 3,234 hours (2 hours/facility x 1,617 facilities) across
all IPFs. Therefore, the cost for this training is $44.74 ($22.37/hour
x 2 hours) for each IPF or $72,344.58 ($22.37/hour x 3,234 hours) for
all facilities.
Finally, IPFs must submit to CMS aggregate population counts for
Medicare and non-Medicare discharges by age group, and diagnostic
group, and sample size counts for measures for which sampling is
performed. As noted above, we are proposing five new measures beginning
with the FY 2018 payment determination. However, because, as further
described above, we are eliminating reporting this non-measure data by
quarter for all measures, we believe that the addition of five measures
leads to a net negligible change in burden associated with non-measure
data collection.
C. Summary of Annual Burden Estimates for Proposed Requirements
Table 25--Proposed Annual Recordkeeping and Reporting Requirements Under OMB Control Number 0938-1171 (CMS-10432)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Labor cost
Responses (per Burden per annual of
Preamble section(s) Proposed action Respondents respondent) response burden reporting Total cost ($)
(hours)* (hours) ($/hr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
V.C......................... Remove HBIPS-4............ 1,617 862 (431 cases/yr x 2 0.20 278,770.80 22.37 6,236,102.80
measures).
V........................... Remove HBIPS-6 and HBIPS-7
V........................... Add NQF # 1656, # 1663, #
0647, # 0648, and
Screening for Metabolic
Disorders.
------------- ------------------------------------------------------
Training.................. ........... 1......................... 2 3,234 ........... 72,344.58
Total................... .......................... 1,617 863....................... 2.2 282,004.8 22.37 6,308,447.38
--------------------------------------------------------------------------------------------------------------------------------------------------------
D. ICRs Regarding the Hospital and Health Care Complex Cost Report
(CMS-2552-10)
This rule would not impose any new or revised collection of
information requirements associated with CMS-2552-10 (as discussed
under preamble section III.A.3.a.i.). Consequently, the cost report
does not require additional OMB review under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The report's
information collection requirements and burden estimates are approved
by OMB under control number 0938-0052.
E. Submission of PRA-Related Comments
We submitted a copy of this proposed rule to OMB for its review of
the rule's information collection and recordkeeping requirements. The
requirements are not effective until they have been approved by the
OMB.
To obtain copies of the supporting statement and any related forms
for the proposed collections discussed above, please visit CMS' Web
site at www.cms.hhs.gov/Paperwork@cms.hhs.gov">www.cms.hhs.gov/Paperwork@cms.hhs.gov, or call the Reports
Clearance Office at 410-786-1326.
We invite public comment on these potential information collection
requirements. If you wish to comment, please submit your comments
electronically as specified under the ADDRESSES caption of this
proposed rule and identify the rule (CMS-1627-P).
PRA-related comments must be received on/by June 23, 2015.
VII. Regulatory Impact Analysis
A. Statement of Need
This proposed rule would update the prospective payment rates for
Medicare inpatient hospital services provided by IPFs for discharges
occurring during the FY beginning October 1, 2015, through September
30, 2016. We are applying the proposed FY 2012-based IPF-specific
market basket increase of 2.7 percent, less the productivity adjustment
of 0.6 percentage point as required by 1886(s)(2)(A)(i) of the Act, and
further reduced by 0.2 percentage point as required by sections
1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the Act. In this proposed rule,
we propose to adopt an IPF-specific market basket and to update the IPF
labor-related share; to adopt new OMB CBSA delineations for the FY 2016
IPF Wage Index; and to phase out the rural adjustment for 37 rural
providers which would become urban providers as a result of the new
CBSA delineations. Additionally, this rule reminds providers of the
October 1, 2015 implementation of the International Classification of
Diseases, 10th Revision, Clinical Modification (ICD-
[[Page 25059]]
10-CM/PCS) for the IPF prospective payment system, updates providers on
the status of IPF PPS refinements, and proposes new quality reporting
requirements for the IPFQR Program.
B. Overall Impact
We have examined the impact of this proposed rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995
(March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism
(August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct 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 a major rules
with economically significant effects ($100 million or more in any 1
year). This proposed rule is not designated as economically
``significant'' under section 3(f)(1) of Executive Order 12866.
We estimate that the total impact of these changes for FY 2016
payments compared to FY 2015 payments will be a net increase of
approximately $80 million. This reflects a $95 million increase from
the update to the payment rates, as well as a $15 million decrease as a
result of the update to the outlier threshold amount. Outlier payments
are estimated to decrease from 2.3 percent in FY 2015 to 2.0 percent of
total IPF payments in FY 2016.
The RFA requires agencies to analyze options for regulatory relief
of small entities if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most IPFs and most other providers and
suppliers are small entities, either by nonprofit status or having
revenues of $7.5 million to $38.5 million or less in any 1 year,
depending on industry classification (for details, refer to the SBA
Small Business Size Standards found at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf), or being nonprofit
organizations that are not dominant in their markets.
Because we lack data on individual hospital receipts, we cannot
determine the number of small proprietary IPFs or the proportion of
IPFs' revenue derived from Medicare payments. Therefore, we assume that
all IPFs are considered small entities. The Department of Health and
Human Services generally uses a revenue impact of 3 to 5 percent as a
significance threshold under the RFA.
As shown in Table 26, we estimate that the overall revenue impact
of this proposed rule on all IPFs is to increase Medicare payments by
approximately 1.6 percent. As a result, since the estimated impact of
this proposed rule is a net increase in revenue across almost all
categories of IPFs, the Secretary has determined that this proposed
rule would have a positive revenue impact on a substantial number of
small entities. MACs are not considered to be small entities.
Individuals and States are not included in the definition of a small
entity.
In addition, section 1102(b) of the Social Security Act requires us
to prepare a regulatory impact analysis if a rule may have a
significant impact on the operations of a substantial number of small
rural hospitals. This analysis must conform to the provisions of
section 603 of the RFA. For purposes of section 1102(b) of the Act, we
define a small rural hospital as a hospital that is located outside of
a metropolitan statistical area and has fewer than 100 beds. As
discussed in detail below, the rates and policies set forth in this
proposed rule would not have an adverse impact on the rural hospitals
based on the data of the 275 rural units and 68 rural hospitals in our
database of 1,617 IPFs for which data were available. Therefore, the
Secretary has determined that this proposed rule would not have a
significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (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 2015, that
threshold is approximately $144 million. This proposed rule will not
impose spending costs on state, local, or tribal governments in the
aggregate, or by the private sector, of $144 million or more.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. As stated above, this proposed rule would not have a
substantial effect on state and local governments.
C. Anticipated Effects
We discuss the historical background of the IPF PPS and the impact
of this proposed rule on the Federal Medicare budget and on IPFs.
1. Budgetary Impact
As discussed in the November 2004 and May 2006 IPF PPS final rules,
we applied a budget neutrality factor to the Federal per diem base rate
and ECT rate to ensure that total estimated payments under the IPF PPS
in the implementation period would equal the amount that would have
been paid if the IPF PPS had not been implemented. The budget
neutrality factor includes the following components: outlier
adjustment, stop-loss adjustment, and the behavioral offset. As
discussed in the May 2008 IPF PPS notice (73 FR 25711), the stop-loss
adjustment is no longer applicable under the IPF PPS.
As discussed in section III.D.1.e. of this proposed rule, we are
using the wage index and labor-related share in a budget neutral manner
by applying a wage index budget neutrality factor to the Federal per
diem base rate and ECT rate. Therefore, the budgetary impact to the
Medicare program of this proposed rule will be due to the estimated
market basket update for FY 2016 of 2.7 percent (see section III.A.4.
of this proposed rule) less the productivity adjustment of 0.6
percentage point required by section 1886 (s)(2)(A)(i) of the Act;
further reduced by the ``other adjustment'' of 0.2 percentage point
under sections 1886(s)(2)(A)(ii) and 1886 (s)(3)(D) of the Act; and the
update to the outlier fixed dollar loss threshold amount.
We estimate that the FY 2016 impact will be a net increase of $80
million in payments to IPF providers. This reflects an estimated $95
million increase from the update to the payment rates and a $15 million
decrease due to the update to the outlier threshold amount to set total
estimated outlier payments at 2.0 percent of total estimated payments
in FY 2016. This estimate does not include the implementation of the
required 2 percentage point reduction of the market basket increase
factor for any IPF that fails to meet the IPF quality reporting
requirements (as discussed in section VII.C.4. below).
[[Page 25060]]
2. Impact on Providers
To understand the impact of the changes to the IPF PPS on
providers, discussed in this proposed rule, it is necessary to compare
estimated payments under the IPF PPS rates and factors for FY 2016
versus those under FY 2015. We determined the percent change of
estimated FY 2016 IPF PPS payments to FY 2015 IPF PPS payments for each
category of IPFs. In addition, for each category of IPFs, we have
included the estimated percent change in payments resulting from the
update to the outlier fixed dollar loss threshold amount; the updated
wage index data; the changes to wage index CBSAs; the changes to rural
adjustment payments resulting from changes in rural or urban status,
due to CBSA changes; the proposed labor-related share; and the
estimated market basket update for FY 2016, as adjusted by the
productivity adjustment according to section 1886(s)(2)(A)(i), and the
``other adjustment'' according to sections 1886(s)(2)(A)(ii) and
1886(s)(3)(D) of the Act.
To illustrate the impacts of the FY 2016 changes in this proposed
rule, our analysis begins with a FY 2015 baseline simulation model
based on FY 2014 IPF payments inflated to the midpoint of FY 2015 using
IHS Global Insight Inc.'s most recent forecast of the market basket
update (see section III.A.4. of this proposed rule); the estimated
outlier payments in FY 2015; the CBSA delineations for IPFs based on
OMB's MSA definitions after June 2003; the FY 2014 pre-floor, pre-
reclassified hospital wage index; the FY 2015 labor-related share; and
the FY 2015 percentage amount of the rural adjustment. During the
simulation, the total estimated outlier payments are maintained at 2
percent of total IPF PPS payments.
Each of the following changes is added incrementally to this
baseline model in order for us to isolate the effects of each change:
The update to the outlier fixed dollar loss threshold
amount;
The FY 2015 pre-floor, pre-reclassified hospital wage
index without the revised OMB delineations;
The FY 2015 updated CBSA delineations, based on OMB's
February 28, 2013 Bulletin No. 13-01, as described in section
III.D.1.c. of this proposed rule, with the proposed blended FY 2016 IPF
wage index;
The FY 2016 rural adjustment, accounting for changes to
rural or urban status due to the updated CBSA delineations, including
the phase-out of the rural adjustment for the IPFs changing from rural
to urban status, as described in section III.D.1.d;
The proposed FY 2016 labor-related share;
The estimated market basket update for FY 2016 of 2.7
percent less the productivity adjustment of 0.6 percentage point
reduction in accordance with section 1886(s)(2)(A)(i) of the Act and
further reduced by the ``other adjustment'' of 0.2 percentage point in
accordance with sections 1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the
Act.
Our final comparison illustrates the percent change in payments
from FY 2015 (that is, October 1, 2014, to September 30, 2015) to FY
2016 (that is, October 1, 2015, to September 30, 2016) including all
the changes in this proposed rule.
Table 26--IPF IMPACT Table for FY 2016
[% change in columns 3-9]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Labor
Number of Wage index rural related IPF market Total
Facility by type IPFs Outlier \1\ CBSA \2\ adjustment share basket percent
\3\ (74.9%) \4\ update \5\ change \6\
(1) (2) (3) (4) (5) (6) (7) (8) (9)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities.................................. 1,617 -0.3 0.0 0.0 0.0 0.0 1.9 1.6
Total Urban................................. 1,274 -0.3 0.0 0.0 0.0 0.2 1.9 1.8
Total Rural................................. 343 -0.3 0.0 -0.2 0.2 -1.1 1.9 0.6
Urban unit.................................. 847 -0.4 0.0 0.0 0.0 0.2 1.9 1.7
Urban hospital.............................. 427 -0.1 -0.1 0.1 0.0 0.1 1.9 1.9
Rural unit.................................. 275 -0.3 0.1 -0.2 0.2 -1.1 1.9 0.5
Rural hospital.............................. 68 -0.1 0.0 -0.3 0.2 -1.0 1.9 0.7
CBSA Change:
Urban to Urban.............................. 1,237 -0.3 0.0 0.0 0.1 0.2 1.9 1.8
Rural to Rural.............................. 340 -0.3 0.0 -0.2 0.1 -1.1 1.9 0.4
Urban to Rural.............................. 3 -0.1 3.1 -0.4 16.2 -1.1 1.9 20.1
Rural to Urban.............................. 37 -0.2 0.1 2.8 -4.1 -0.9 1.9 -0.5
By Type of Ownership:
Freestanding IPFs:
Urban Psychiatric Hospitals:
Government.............................. 123 -0.3 0.1 0.0 0.0 0.1 1.9 1.8
Non-Profit.............................. 99 -0.1 0.4 0.1 0.0 0.4 1.9 2.7
For-Profit.............................. 205 0.0 -0.3 0.1 0.0 0.0 1.9 1.6
Rural Psychiatric Hospitals:
Government.............................. 36 -0.1 0.2 -0.1 0.4 -0.8 1.9 1.5
Non-Profit.............................. 11 -0.5 -0.6 0.0 0.0 -0.3 1.9 0.5
For-Profit.............................. 21 0.0 0.0 -0.6 0.1 -1.3 1.9 0.1
IPF Units:
Urban:
Government.............................. 129 -0.6 -0.2 -0.1 0.0 0.3 1.9 1.2
Non-Profit.............................. 552 -0.4 0.2 0.0 -0.1 0.3 1.9 1.9
For-Profit.............................. 166 -0.3 -0.2 0.0 0.0 0.0 1.9 1.3
Rural:
Government.............................. 69 -0.2 -0.1 -0.3 0.1 -1.3 1.9 0.0
Non-Profit.............................. 142 -0.3 0.2 -0.2 0.3 -0.9 1.9 0.8
For-Profit.............................. 64 -0.3 0.0 -0.2 0.2 -1.2 1.9 0.3
By Teaching Status:
Non-teaching................................ 1,420 -0.2 -0.1 0.0 0.0 -0.1 1.9 1.5
Less than 10% interns and residents to beds. 110 -0.3 0.2 -0.1 0.0 0.5 1.9 2.1
10% to 30% interns and residents to beds.... 61 -0.7 0.4 -0.1 0.0 0.5 1.9 2.1
More than 30% interns and residents to beds. 26 -0.7 0.4 0.0 0.0 0.8 1.9 2.4
[[Page 25061]]
By Region:
New England................................. 108 -0.3 0.8 0.0 0.0 0.7 1.9 3.2
Mid-Atlantic................................ 243 -0.2 0.2 -0.1 0.0 0.6 1.9 2.4
South Atlantic.............................. 238 -0.2 -0.3 0.1 -0.1 -0.4 1.9 0.9
East North Central.......................... 259 -0.2 0.0 0.0 0.1 -0.2 1.9 1.6
East South Central.......................... 160 -0.2 -0.5 0.0 -0.1 -1.1 1.9 0.0
West North Central.......................... 141 -0.4 0.0 0.1 0.0 -0.3 1.9 1.3
West South Central.......................... 243 -0.2 -0.5 0.0 -0.1 -0.7 1.9 0.3
Mountain.................................... 103 -0.2 0.4 0.0 0.1 0.2 1.9 2.3
Pacific..................................... 122 -0.4 0.5 0.0 0.1 1.3 1.9 3.4
By Bed Size:
Psychiatric Hospitals:
Beds: 0-24.............................. 83 -0.1 0.0 0.1 -0.3 -0.7 1.9 0.8
Beds: 25-49............................. 77 -0.1 -0.4 0.3 -0.1 -0.2 1.9 1.4
Beds: 50-75............................. 84 -0.1 0.0 0.0 0.1 0.0 1.9 1.9
Beds: 76 +.............................. 251 -0.1 0.0 0.0 0.0 0.1 1.9 2.0
Psychiatric Units:
Beds: 0-24.............................. 662 -0.4 0.0 0.0 0.0 -0.3 1.9 1.2
Beds: 25-49............................. 301 -0.4 0.0 0.1 0.0 0.0 1.9 1.7
Beds: 50-75............................. 103 -0.3 0.1 0.0 0.0 0.1 1.9 1.9
Beds: 76 +.............................. 56 -0.4 -0.1 -0.2 0.0 0.5 1.9 1.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes a FY 2016 IPF wage index, current CBSA delineations, and a labor-related share of 0.69294.
\2\ Includes a 50/50 FY 2016 proposed blended IPF wage index, new CBSA delineations, and a labor-related share of 0.69294.
\3\ Includes a 50/50 FY 2016 proposed blended IPF wage index, new CBSA delineations, a labor-related share of 0.69294, and a rural adjustment. Providers
changing from urban to rural status will receive a 17 percent rural adjustment, and providers changing from rural to urban status will receive 2/3 of
the 17 percent rural adjustment in FY 2016. For those changing from urban to rural status, the total impact shown is affected by outlier threshold
increasing, which results in smaller outlier payments as part of total payments. For those changing from rural to urban status, the outlier threshold
is being lowered by 2/3 of 17 percent, which results in more providers being eligible for outlier payments, increasing the outlier portion of their
total payments.
\4\ Includes a 50/50 FY 2016 proposed blended IPF wage index, new CBSA delineations, a labor-related share of 0.749, and a rural adjustment.
\5\ This column reflects the payment update impact of the IPF-specific market basket update of 2.7 percent, a 0.6 percentage point reduction for the
productivity adjustment as required by section 1886(s)(2)(A)(i) of the Act, and a 0.2 percentage point reduction in accordance with sections
1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the Act.
\6\ Percent changes in estimated payments from FY 2015 to FY 2016 include all of the changes presented in this proposed rule. Note, the products of
these impacts may be different from the percentage changes shown here due to rounding effects.
3. Results
Table 26 above displays the results of our analysis. The table
groups IPFs into the categories listed below based on characteristics
provided in the Provider of Services (POS) file, the IPF provider
specific file, and cost report data from HCRIS:
Facility Type
Location
Teaching Status Adjustment
Census Region
Size
The top row of the table shows the overall impact on the 1,617 IPFs
included in this analysis.
In column 3, we present the effects of the update to the outlier
fixed dollar loss threshold amount. We estimate that IPF outlier
payments as a percentage of total IPF payments are 2.3 percent in FY
2015. Thus, we are adjusting the outlier threshold amount in this
proposed rule to set total estimated outlier payments equal to 2
percent of total payments in FY 2016. The estimated change in total IPF
payments for FY 2016, therefore, includes an approximate 0.3 percent
decrease in payments because the outlier portion of total payments is
expected to decrease from approximately 2.3 percent to 2.0 percent.
The overall impact of this outlier adjustment update (as shown in
column 3 of Table 26), across all hospital groups, is to decrease total
estimated payments to IPFs by 0.3 percent. The largest decrease in
payments is estimated to reflect a 0.7 percent decrease in payments for
IPFs located in teaching hospitals with an intern and resident Average
Daily Census (ADC) ratio that is 10 percent or greater.
In column 4, we present the effects of the budget-neutral proposed
update to the IPF wage index. This represents the effect of using the
most recent wage data available without taking into account the revised
OMB delineations, which are presented separately in the next column.
That is, the impact represented in this column is solely that of
updating from the FY 2015 IPF wage index to the FY 2016 IPF wage index
without any changes to the OMB delineations. We note that there is no
projected change in aggregate payments to IPFs, as indicated in the
first row of column 4. However, there will be distributional effects
among different categories of IPFs. For example, we estimate the
largest increase in payments to be 3.1 percent for IPFs changing from
urban to rural status, and the largest decrease in payments to be 0.6
percent for rural non-profit freestanding IPFs.
In column 5, we present the effects of the new OMB delineations and
the proposed transition to the new delineations using the transitional
IPF wage index. The FY 2016 IPF proposed transitional wage index is a
blended wage index using 50 percent of the IPF's FY 2016 wage index
based on the new OMB delineations and 50 percent of the IPF's FY 2016
wage index based on the OMB delineations used in FY 2015. In the
aggregate, since these proposed updates to the wage index are applied
in a budget-neutral manner, we do not estimate that these proposed
updates would affect overall estimated payments to IPFs. However, we
estimate that these proposed updates would have distributional effects.
We estimate the largest increase in payments would be 2.8 percent for
IPFs changing from rural to urban status and the largest decrease in
payments would be 0.6 percent for rural for-profit freestanding IPFs.
In column 6, we present the effects of the changes to the rural
adjustment under the new CBSA delineations. There are 3 urban IPFs
which would be
[[Page 25062]]
newly designated as rural IPFs, which would now receive a full 17
percent rural adjustment. We estimate that the largest increase in
payments would be to these 3 newly-rural IPFs. Note that each column's
simulations include both regular and outlier payments; as regular
payments increase, outlier payments decrease to maintain outlier
payments at 2 percent of total payments. As such, the increase to total
IPF payments is estimated to be 16.2 percent. There are also 37 rural
IPFs which would be newly designated as urban IPFs, where we proposed
to phase out their rural adjustment over 3 years. These 37 newly-urban
providers would receive \2/3\ of the 17 percent rural adjustment in FY
2016, \1/3\ of the 17 percent rural adjustment in FY 2017, and no rural
adjustment for FY 2018 and subsequent years. As the regular payments
for these 37 providers decrease, their outlier payments increase to
maintain outlier payments at 2 percent of total payments. We estimate
that the largest decrease in payments would be 4.1 percent for these 37
newly-urban providers.
In column 7, we present the estimated effects of the proposed
labor-related share. The proposed update to the IPF labor-related share
is made in a budget-neutral manner and therefore would not affect total
estimated IPF PPS payments. However, it would affect the estimated
distribution of payments among providers. For example, we estimate the
largest increase in payments would be 1.3 percent to IPFs in the
Pacific region. We estimate the largest decrease in payments would be
1.3 percent to rural for-profit freestanding IPFs and to rural IPF
governmental units.
In column 8, we present the estimated effects of the update to the
IPF PPS payment rates of 1.9 percent, which are based on a proposed 2.7
percent IPF-specific market basket update, less the productivity
adjustment of 0.6 percentage point in accordance with section
1886(s)(2)(A)(i), and further reduced by 0.2 percentage point in
accordance with section 1886(s)(2)(A)(ii) and 1886(s)(3)(D).
Finally, column 9 compares our estimates of the total changes
reflected in this proposed rule for FY 2016 to the payments for FY 2015
(without these changes). This column reflects all proposed FY 2016
changes relative to FY 2015. The average estimated increase for all
IPFs is approximately 1.6 percent. This estimated net increase includes
the effects of the estimated 2.7 percent market basket update reduced
by the productivity adjustment of 0.6 percentage point, as required by
section 1886(s)(2)(A)(i) of the Act and further reduced by the ``other
adjustment'' of 0.2 percentage point, as required by sections
1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the Act. It also includes the
overall estimated 0.3 percent decrease in estimated IPF outlier
payments as a percent of total payments from the update to the outlier
fixed dollar loss threshold amount. Since we are making the updates
noted in columns 4 through 7 in a budget-neutral manner, they will not
affect total estimated IPF payments in the aggregate. However, they
will affect the estimated distribution of payments among providers.
Overall, urban IPFs are estimated to experience a 1.8 percent
increase in payments in FY 2016 and rural IPFs are estimated to
experience a 0.6 percent increase in payments in FY 2016. The largest
estimated decrease in payments is 0.5 percent for rural IPFs that
transition to urban status as a result of the new OMB delineations. As
noted previously, we proposed to mitigate the effects of the loss of
the rural adjustment to these 37 providers by phasing the adjustment
out over 3 years. The largest payment increase is estimated at 20.1
percent for IPFs that transition from urban to rural status (thereby
gaining the 17 percent rural adjustment), followed by a 3.4 percent
increase for IPFs in the Pacific region.
4. Effects of Updates to the IPFQR Program
As discussed in section V. of this proposed rule and in accordance
with section 1886(s)(4)(A)(i) of the Act, we will implement a 2
percentage point reduction in the FY 2018 market basket update for IPFs
that have failed to comply with the IPFQR Program requirements for FY
2018, including reporting on the required measures. In section V. of
this proposed rule, we discuss how the 2 percentage point reduction
will be applied. For FY 2015, of the 1,725 IPFs eligible for the IPFQR
Program, 31 IPFs (1.8 percent) did not receive the full market basket
update because of the IPFQR Program; 10 of these IPFs chose not to
participate and 21 did not meet the requirements of the program. We
anticipate that even fewer IPFs would receive the reduction for FY 2016
as IPFs become more familiar with the requirements. Thus, we estimate
that this policy will have a negligible impact on overall IPF payments
for FY 2016.
Based on the proposals made in this rule, we estimate a total
increase in burden of 174.4 hours per IPF or 282,004.80 hours across
all IPFs, resulting in a total increase in financial burden of
$3,901.33 per IPF or $6,308,447.38 across all IPFs. As discussed in
section VI. of this proposed rule, we will attribute the costs
associated with the proposals to the year in which these costs begin;
for the purposes of all the proposals in this proposed rule, that year
is FY 2016. Further information on these estimates can be found in
section VI. of this proposed rule.
We intend to closely monitor the effects of this quality reporting
program on IPFs and help facilitate successful reporting outcomes
through ongoing stakeholder education, national trainings, and a
technical help desk.
5. Effect on Beneficiaries
Under the IPF PPS, IPFs will receive payment based on the average
resources consumed by patients for each day. We do not expect changes
in the quality of care or access to services for Medicare beneficiaries
under the FY 2016 IPF PPS, but we continue to expect that paying
prospectively for IPF services would enhance the efficiency of the
Medicare program.
D. Alternatives Considered
The statute does not specify an update strategy for the IPF PPS and
is broadly written to give the Secretary discretion in establishing an
update methodology. Therefore, we are updating the IPF PPS using the
methodology published in the November 2004 IPF PPS final rule, but with
a proposed IPF-specific market basket, and updated labor-related share,
a proposed transitional wage index to implement new OMB CBSA
designations, and a proposed phase-out of the rural adjustment for the
37 providers changing from rural to urban status as a result of the
updated OMB CBSA delineations used in the FY 2016 IPF PPS transitional
wage index. We considered implementing the new OMB designations for the
FY 2016 IPF PPS wage index without a blend, but wanted to mitigate any
negative effects of CBSA changes on IPFs. Additionally, we considered
abruptly ending the rural adjustment for the 37 IPF providers which
changed from rural to urban status as a result of the OMB CBSA changes.
However, we wanted to propose relief from the effects of OMB's new CBSA
delineations to the 37 providers which changed from rural to urban
status. We also considered whether to allow a phase-in of the updated
LRS, but decided that the impact of full implementation did not warrant
a phase-in, especially given that we also proposed a transitional wage
index and a phase-out of the rural adjustment for those IPFs which
changed status from rural to urban under the new CBSAs. Additionally,
for
[[Page 25063]]
the IPFQR Program, alternatives were not considered because the
Program, as designed, best achieves quality reporting goals for the
inpatient psychiatric care setting, while minimizing associated
reporting burdens on IPFs. Section V. of this proposed rule discusses
other benefits and objectives of the Program.
E. Accounting Statement
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/omb/circulars_a004_a-4), in Table 27 below, we have
prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this proposed rule. The
costs for data submission presented in Table 27 are calculated in
section VI, which also discusses the benefits of data collection. This
table provides our best estimate of the increase in Medicare payments
under the IPF PPS as a result of the changes presented in this proposed
rule and based on the data for 1,617 IPFs in our database. Furthermore,
we present the estimated costs associated with updating the IPFQR
program. The increases in Medicare payments are classified as Federal
transfers to IPF Medicare providers.
Table 27--Accounting Statement: Classification of Estimated Expenditures
------------------------------------------------------------------------
Change in Estimated Transfers From FY 2015 IPF PPS to FY 2016 IPF PPS:
-------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers...... $80 million.
From Whom to Whom?.................. Federal Government to IPF Medicare
Providers.
------------------------------------------------------------------------
FY 2016 Costs to Updating the Quality Reporting Program for IPFs:
------------------------------------------------------------------------
Category Costs
------------------------------------------------------------------------
Annualized Monetized Costs for IPFs $6.31 million.
to Submit Data (Quality Reporting
Program)
------------------------------------------------------------------------
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 412
Administrative practice and procedure, Health facilities, Medicare,
Puerto Rico, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
and Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
0
1. The authority citation for part 412 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh), sec. 124 of Pub. L. 106-113 (113 Stat.
1501A-332), sec. 1206 of Pub. L. 113-67, and sec. 112 of Pub. L.
113-93.
0
2. Section 412.428 is amended by revising paragraph (e) to read as
follows:
Sec. 412.428 Publication of Updates to the inpatient psychiatric
facility prospective payment system.
* * * * *
(e) Describe the ICD-10-CM coding changes and DRG classification
changes discussed in the annual update to the hospital inpatient
prospective payment system regulations.
* * * * *
Dated: April 13, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: April 22, 2015.
Sylvia M. Burwell,
Secretary.
Note: The following addendum will not publish in the Code of
Federal Regulations.
Addendum--FY 2016 Proposed Rates and Adjustment Factors
Per Diem Rate:
Federal Per Diem Base Rate................................... $745.19
Labor Share (0.749).......................................... 558.15
Non-Labor Share (0.251)...................................... 187.04
Per Diem Rate Applying the 2 Percentage Point Reduction
Federal Per Diem Base Rate................................... $730.56
Labor Share (0.749).......................................... 547.19
Non-Labor Share (0.251)...................................... 183.37
Fixed Dollar Loss Threshold Amount: $9,825.
Wage Index Budget-Neutrality Factor: 1.0041.
Facility Adjustments:
Rural Adjustment Factor................... 1.17
Teaching Adjustment Factor................ 0.5150
Wage Index................................ Pre-reclass Hospital Wage
Index (FY2015)
Cost of Living Adjustments (COLAs):
------------------------------------------------------------------------
Cost of living
Area adjustment factor
------------------------------------------------------------------------
Alaska:
City of Anchorage and 80-kilometer (50-mile) 1.23
radius by road..................................
City of Fairbanks and 80-kilometer (50-mile) 1.23
radius by road..................................
City of Juneau and 80-kilometer (50-mile) radius 1.23
by road.........................................
Rest of Alaska................................... 1.25
Hawaii:
City and County of Honolulu...................... 1.25
County of Hawaii................................. 1.19
County of Kauai.................................. 1.25
County of Maui and County of Kalawao............. 1.25
------------------------------------------------------------------------
Patient Adjustments:
ECT--Per Treatment................................... $320.82
ECT--Per Treatment Applying the 2 Percentage Point 314.52
Reduction...........................................
[[Page 25064]]
Variable Per Diem Adjustments:
------------------------------------------------------------------------
Adjustment factor
------------------------------------------------------------------------
Day 1--Facility Without a Qualifying Emergency 1.19
Department..........................................
Day 1--Facility With a Qualifying Emergency 1.31
Department..........................................
Day 2................................................ 1.12
Day 3................................................ 1.08
Day 4................................................ 1.05
Day 5................................................ 1.04
Day 6................................................ 1.02
Day 7................................................ 1.01
Day 8................................................ 1.01
Day 9................................................ 1.00
Day 10............................................... 1.00
Day 11............................................... 0.99
Day 12............................................... 0.99
Day 13............................................... 0.99
Day 14............................................... 0.99
Day 15............................................... 0.98
Day 16............................................... 0.97
Day 17............................................... 0.97
Day 18............................................... 0.96
Day 19............................................... 0.95
Day 20............................................... 0.95
Day 21............................................... 0.95
After Day 21......................................... 0.92
------------------------------------------------------------------------
Age Adjustments:
------------------------------------------------------------------------
Age (in years) Adjustment factor
------------------------------------------------------------------------
Under 45............................................. 1.00
45 and under 50...................................... 1.01
50 and under 55...................................... 1.02
55 and under 60...................................... 1.04
60 and under 65...................................... 1.07
65 and under 70...................................... 1.10
70 and under 75...................................... 1.13
75 and under 80...................................... 1.15
80 and over.......................................... 1.17
------------------------------------------------------------------------
DRG Adjustments:
------------------------------------------------------------------------
MS-DRG MS-DRG descriptions Adjustment factor
------------------------------------------------------------------------
056........................... Degenerative nervous 1.05
057........................... system disorders w
MCC.
Degenerative nervous
system disorders w/o
MCC.
080........................... Nontraumatic stupor & 1.07
081........................... coma w MCC.
Nontraumatic stupor &
coma w/o MCC.
876........................... O.R. procedure w 1.22
principal diagnoses
of mental illness.
880........................... Acute adjustment 1.05
reaction &
psychosocial
dysfunction.
881........................... Depressive neuroses.. 0.99
882........................... Neuroses except 1.02
depressive.
883........................... Disorders of 1.02
personality &
impulse control.
884........................... Organic disturbances 1.03
& mental retardation.
885........................... Psychoses............ 1.00
886........................... Behavioral & 0.99
developmental
disorders.
887........................... Other mental disorder 0.92
diagnoses.
894........................... Alcohol/drug abuse or 0.97
dependence, left AMA.
895........................... Alcohol/drug abuse or 1.02
dependence w
rehabilitation
therapy.
896........................... Alcohol/drug abuse or 0.88
897........................... dependence w/o
rehabilitation
therapy w MCC.
Alcohol/drug abuse or
dependence w/o
rehabilitation
therapy w/o MCC.
------------------------------------------------------------------------
Comorbidity Adjustments:
------------------------------------------------------------------------
Comorbidity Adjustment factor
------------------------------------------------------------------------
Developmental Disabilities........................... 1.04
Coagulation Factor Deficit........................... 1.13
[[Page 25065]]
Tracheostomy......................................... 1.06
Eating and Conduct Disorders......................... 1.12
Infectious Diseases.................................. 1.07
Renal Failure, Acute................................. 1.11
Renal Failure, Chronic............................... 1.11
Oncology Treatment................................... 1.07
Uncontrolled Diabetes Mellitus....................... 1.05
Severe Protein Malnutrition.......................... 1.13
Drug/Alcohol Induced Mental Disorders................ 1.03
Cardiac Conditions................................... 1.11
Gangrene............................................. 1.10
Chronic Obstructive Pulmonary Disease................ 1.12
Artificial Openings--Digestive & Urinary............. 1.08
Severe Musculoskeletal & Connective Tissue Diseases.. 1.09
Poisoning............................................ 1.11
------------------------------------------------------------------------
[FR Doc. 2015-09880 Filed 4-24-15; 4:15 pm]
BILLING CODE 4120-01-P
