Medicare Program; CY 2019 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts, 52459-52462 [2018-22526]
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Federal Register / Vol. 83, No. 201 / Wednesday, October 17, 2018 / Notices
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findings concerning review and
approval of a national accrediting
organization’s requirements consider,
among other factors, the applying
accrediting organization’s requirements
for accreditation; survey procedures;
resources for conducting required
surveys; capacity to furnish information
for use in enforcement activities;
monitoring procedures for provider
entities found not in compliance with
the conditions or requirements; and
ability to provide us with the necessary
data for validation.
Section 1865(a)(3)(A) of the Act
further requires that we publish, within
60 days of receipt of an organization’s
complete application, a notice
identifying the national accrediting
body making the request, describing the
nature of the request, and providing at
least a 30-day public comment period.
We have 210 days from the receipt of a
complete application to publish notice
of approval or denial of the application.
The purpose of this proposed notice
is to inform the public of AAHHS–
HFAP’s request for approval of its
hospital accreditation program. This
notice also solicits public comment on
whether AAHHS–HFAP’s requirements
meet or exceed the Medicare conditions
of participation (CoPs) for hospitals.
B. Evaluation of Deeming Authority
Request
AAHHS–HFAP submitted all the
necessary materials to enable us to make
a determination concerning its request
for continued approval of its hospital
accreditation program. This application
was determined to be complete on
August 17, 2018. Under section
1865(a)(2) of the Act and our regulations
at § 488.5 (Application and reapplication procedures for national
accrediting organizations), our review
and evaluation of AAHHS–HFAP will
be conducted in accordance with, but
not necessarily limited to, the following
factors:
• The equivalency of AAHHS–
HFAP’s standards for hospitals as
compared with CMS’ hospital CoPs.
• AAHHS–HFAP’s survey process to
determine the following:
++ The composition of the survey
team, surveyor qualifications, and the
ability of the organization to provide
continuing surveyor training.
++ The comparability of AAHHS–
HFAP’s processes to those of state
agencies, including survey frequency,
and the ability to investigate and
respond appropriately to complaints
against accredited facilities.
++ AAHHS–HFAP’s processes and
procedures for monitoring a hospital
found out of compliance with the
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AAHHS–HFAP’s program requirements.
These monitoring procedures are used
only when the AAHHS–HFAP identifies
noncompliance. If noncompliance is
identified through validation reviews or
complaint surveys, the state survey
agency monitors corrections as specified
at § 488.9(c).
++ AAHHS–HFAP’s capacity to
report deficiencies to the surveyed
facilities and respond to the facility’s
plan of correction in a timely manner.
++ AAHHS–HFAP’s capacity to
provide CMS with electronic data and
reports necessary for effective validation
and assessment of the organization’s
survey process.
++ The adequacy of AAHHS–HFAP’s
staff and other resources, and its
financial viability.
++ AAHHS–HFAP’s capacity to
adequately fund required surveys.
++ AAHHS–HFAP’s policies with
respect to whether surveys are
announced or unannounced, to assure
that surveys are unannounced.
++ AAHHS–HFAP’s agreement to
provide CMS with a copy of the most
current accreditation survey together
with any other information related to
the survey as we may require (including
corrective action plans).
C. Notice Upon Completion of
Evaluation
Upon completion of our evaluation,
including evaluation of public
comments received as a result of this
notice, we will publish a final notice in
the Federal Register announcing the
result of our evaluation.
III. Collection of Information
Requirements
This document does not impose
information collection requirements,
that is, reporting, recordkeeping or
third-party disclosure requirements.
Consequently, there is no need for
review by the Office of Management and
Budget under the authority of the
Paperwork Reduction Act of 1995 (44
U.S.C. Chapter 35).
IV. Response to Comments
Because of the large number of public
comments we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
time specified in the DATES section of
this preamble, and, when we proceed
with a subsequent document, we will
respond to the comments in the
preamble to that document.
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52459
Dated: October 10, 2018.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
[FR Doc. 2018–22546 Filed 10–16–18; 8:45 am]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
[CMS–8068–N]
RIN 0938–AT33
Medicare Program; CY 2019 Inpatient
Hospital Deductible and Hospital and
Extended Care Services Coinsurance
Amounts
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Notice.
AGENCY:
This notice announces the
inpatient hospital deductible and the
hospital and extended care services
coinsurance amounts for services
furnished in calendar year (CY) 2019
under Medicare’s Hospital Insurance
Program (Medicare Part A). The
Medicare statute specifies the formulae
used to determine these amounts. For
CY 2019, the inpatient hospital
deductible will be $1,364. The daily
coinsurance amounts for CY 2019 will
be: $341 for the 61st through 90th day
of hospitalization in a benefit period;
$682 for lifetime reserve days; and
$170.50 for the 21st through 100th day
of extended care services in a skilled
nursing facility in a benefit period.
DATES: Effective Date: This notice is
effective on January 1, 2019.
FOR FURTHER INFORMATION CONTACT:
Yaminee Thaker, (410) 786–7921 for
general information. Gregory J. Savord,
(410) 786–1521 for case-mix analysis.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
Section 1813 of the Social Security
Act (the Act) provides for an inpatient
hospital deductible to be subtracted
from the amount payable by Medicare
for inpatient hospital services furnished
to a beneficiary. It also provides for
certain coinsurance amounts to be
subtracted from the amounts payable by
Medicare for inpatient hospital and
extended care services. Section
1813(b)(2) of the Act requires the
Secretary of the Department of Health
and Human Services (the Secretary) to
determine and publish each year the
amount of the inpatient hospital
deductible and the hospital and
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extended care services coinsurance
amounts applicable for services
furnished in the following calendar year
(CY).
II. Computing the Inpatient Hospital
Deductible for CY 2019
Section 1813(b) of the Act prescribes
the method for computing the amount of
the inpatient hospital deductible. The
inpatient hospital deductible is an
amount equal to the inpatient hospital
deductible for the preceding CY,
adjusted by our best estimate of the
payment-weighted average of the
applicable percentage increases (as
defined in section 1886(b)(3)(B) of the
Act) used for updating the payment
rates to hospitals for discharges in the
fiscal year (FY) that begins on October
1 of the same preceding CY, and
adjusted to reflect changes in real casemix. The adjustment to reflect real casemix is determined on the basis of the
most recent case-mix data available. The
amount determined under this formula
is rounded to the nearest multiple of $4
(or, if midway between two multiples of
$4, to the next higher multiple of $4).
Under section 1886(b)(3)(B)(i)(XX) of
the Act, the percentage increase used to
update the payment rates for FY 2019
for hospitals paid under the inpatient
prospective payment system is the
market basket percentage increase,
otherwise known as the market basket
update, reduced by 0.75 percentage
points (see section 1886(b)(3)(B)(xii)(V)
of the Act), and an adjustment based on
changes in the economy-wide
productivity (the multifactor
productivity (MFP) adjustment) (see
section 1886(b)(3)(B)(xi)(II) of the Act).
Under section 1886(b)(3)(B)(viii) of the
Act, for FY 2019, the applicable
percentage increase for hospitals that do
not submit quality data as specified by
the Secretary is reduced by one quarter
of the market basket update. We are
estimating that after accounting for
those hospitals receiving the lower
market basket update in the paymentweighted average update, the calculated
deductible will not be affected, since the
majority of hospitals submit quality data
and receive the full market basket
update. Section 1886(b)(3)(B)(ix) of the
Act requires that any hospital that is not
a meaningful electronic health record
(EHR) user (as defined in section
1886(n)(3) of the Act) will have threequarters of the market basket update
reduced by 100 percent for FY 2017 and
each subsequent fiscal year. We are
estimating that after accounting for
these hospitals receiving the lower
market basket update, the calculated
deductible will not be affected, since the
majority of hospitals are meaningful
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EHR users and are expected to receive
the full market basket update.
Under section 1886 of the Act, the
percentage increase used to update the
payment rates for FY 2019 for hospitals
excluded from the inpatient prospective
payment system is as follows:
• The percentage increase for long
term care hospitals is the market basket
percentage increase reduced by 0.75
percentage points and the MFP
adjustment (see sections 1886(m)(3)(A)
and 1886(m)(4)(F) of the Act). In
addition, these hospitals may also be
impacted by the quality reporting
adjustments and the site-neutral
payment rates (see sections 1886(m)(5)
and 1886(m)(6) of the Act).
• The percentage increase for
inpatient rehabilitation facilities is the
market basket percentage increase
reduced by a productivity adjustment in
accordance with section
1886(j)(3)(C)(ii)(I) of the Act, and further
reduced by 0.75 percentage points in
accordance with sections
1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v)
of the Act. In addition, these hospitals
may also be impacted by the quality
reporting adjustments (see section
1886(j)(7)of the Act).
• The percentage increase used to
update the payment rate for inpatient
psychiatric facilities is the market
basket percentage increase reduced by
0.75 percentage points and the MFP
adjustment (see sections
1886(s)(2)(A)(i), 1886(s)(2)(A)(ii), and
1886(s)(3)(E) of the Act). In addition,
these hospitals may also be impacted by
the quality reporting adjustments (see
section 1886(s)(4) of the Act).
• The percentage increase for other
types of hospitals excluded from the
inpatient prospective payment system
(for example, cancer hospitals,
children’s hospitals, and hospitals
located outside the 50 States, the
District of Columbia, and Puerto Rico) is
the market basket percentage increase
(see section 1886(b)(3)(B)(ii)(VIII) of the
Act).
The Inpatient Prospective Payment
System market basket percentage
increase for FY 2019 is 2.9 percent and
the MFP adjustment is 0.8 percentage
point, as announced in the final rule
that appeared in the Federal Register on
August 17, 2018 entitled, ‘‘Hospital
Inpatient Prospective Payment System
for Acute Care Hospitals and the LongTerm Care Hospital Prospective
Payment System and Fiscal Year 2019
Rates’’ (83 FR 41144). Therefore, the
percentage increase for hospitals paid
under the inpatient prospective
payment system that submit quality data
and are meaningful EHR users is 1.35
percent (that is, the FY 2019 market
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basket update of 2.9 percent less the
MFP adjustment of 0.8 percentage point
and less 0.75 percentage point). The
average payment percentage increase for
hospitals excluded from the inpatient
prospective payment system is 1.62
percent. This average includes long term
care hospitals, inpatient rehabilitation
facilities, and other hospitals excluded
from the inpatient prospective payment
system. Weighting these percentages in
accordance with payment volume, our
best estimate of the payment-weighted
average of the increases in the payment
rates for FY 2019 is 1.39 percent.
To develop the adjustment to reflect
changes in real case-mix, we first
calculated an average case-mix for each
hospital that reflects the relative
costliness of that hospital’s mix of cases
compared to those of other hospitals.
We then computed the change in
average case-mix for hospitals paid
under the Medicare inpatient
prospective payment system in FY 2018
compared to FY 2017. (We excluded
from this calculation hospitals whose
payments are not based on the inpatient
prospective payment system because
their payments are based on alternate
prospective payment systems or
reasonable costs.) We used Medicare
bills from prospective payment
hospitals that we received as of July
2018. These bills represent a total of
about 7.3 million Medicare discharges
for FY 2018 and provide the most recent
case-mix data available at this time.
Based on these bills, the change in
average case-mix in FY 2018 is 1.33
percent. Based on these bills and past
experience, we expect the overall case
mix change to be 1.8 percent as the year
progresses and more FY 2018 data
become available.
Section 1813 of the Act requires that
the inpatient hospital deductible be
adjusted only by that portion of the
case-mix change that is determined to
be real. Real case-mix is that portion of
case-mix that is due to changes in the
mix of cases in the hospital and not due
to coding optimization. Over the past
several years, we have observed total
case mix increases of about 0.5 percent
per year and have assumed that they are
real. Thus, since we do not have further
information at this time, we expect that
0.5 percent of the 1.8 percent change in
average case-mix for FY 2018 will be
real.
Thus as stated above, the estimate of
the payment-weighted average of the
applicable percentage increases used for
updating the payment rates is 1.39
percent, and the real case-mix
adjustment factor for the deductible is
0.5 percent. Therefore, using the
statutory formula as stated in section
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1813(b) of the Act, we calculate the
inpatient hospital deductible for
services furnished in CY 2019 to be
$1,364. This deductible amount is
determined by multiplying $1,340 (the
inpatient hospital deductible for CY
2018 (82 FR 55367)) by the paymentweighted average increase in the
payment rates of 1.0139 multiplied by
the increase in real case-mix of 1.005,
which equals $1,365.42 and is rounded
to $1,364.
III. Computing the Inpatient Hospital
and Extended Care Services
Coinsurance Amounts for CY 2019
The coinsurance amounts provided
for in section 1813 of the Act are
defined as fixed percentages of the
inpatient hospital deductible for
services furnished in the same CY. The
increase in the deductible generates
increases in the coinsurance amounts.
For inpatient hospital and extended care
services furnished in CY 2019, in
accordance with the fixed percentages
defined in the law, the daily
coinsurance for the 61st through 90th
day of hospitalization in a benefit
period will be $341 (one-fourth of the
inpatient hospital deductible as stated
in section 1813(a)(1)(A) of the Act); the
daily coinsurance for lifetime reserve
days will be $682 (one-half of the
inpatient hospital deductible as stated
in section 1813(a)(1)(B) of the Act); and
the daily coinsurance for the 21st
through 100th day of extended care
services in a skilled nursing facility
(SNF) in a benefit period will be
$170.50 (one-eighth of the inpatient
hospital deductible as stated in section
1813(a)(3) of the Act).
IV. Cost to Medicare Beneficiaries
The Table below summarizes the
deductible and coinsurance amounts for
CYs 2018 and 2019, as well as the
number of each that is estimated to be
paid.
PART A DEDUCTIBLE AND COINSURANCE AMOUNTS FOR CALENDAR YEARS 2018 AND 2019
Value
Number paid
(in millions)
Type of cost sharing
2018
Inpatient hospital deductible ............................................................................
Daily coinsurance for 61st–90th Day ...............................................................
Daily coinsurance for lifetime reserve days .....................................................
SNF coinsurance .............................................................................................
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The estimated total increase in costs
to beneficiaries is about $390 million
(rounded to the nearest $10 million) due
to: (1) The increase in the deductible
and coinsurance amounts; and (2) the
increase in the number of deductibles
and daily coinsurance amounts paid.
We determine the increase in cost to
beneficiaries by calculating the
difference between the 2018 and 2019
deductible and coinsurance amounts
multiplied by the estimated increase in
the number of deductible and
coinsurance amounts paid.
V. Waiver of Proposed Notice and
Comment Period
Section 1813(b)(2) of the Act requires
publication of the inpatient hospital
deductible and all coinsurance
amounts—the hospital and extended
care services coinsurance amounts—
between September 1 and September 15
of the year preceding the year to which
they will apply. We ordinarily publish
a notice of proposed rulemaking in the
Federal Register and invite public
comment prior to a rule taking effect in
accordance with section 553(b) of the
Administrative Procedure Act (APA)
and section 1871 of the Act. However,
we believe that the policies being
publicized in this document do not
constitute agency rulemaking. Rather,
the statute requires that the agency
determine and publish the inpatient
hospital deductible and hospital and
extended care services coinsurance
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$1,340
335
670
167.50
amounts for each calendar year in
accordance with the statutory formulae,
and we are simply notifying the public
of the changes to the Medicare Part A
deductible and coinsurance amounts for
CY 2019. To the extent any of the
policies articulated in this document
constitute interpretations of the statute’s
requirements or procedures that will be
used to implement the statute’s
directive, they are interpretive rules,
general statements of policy, and rules
of agency organization, procedure, or
practice, which are not subject to notice
and comment rulemaking under the
APA.
To the extent that notice and
comment rulemaking would otherwise
apply, we find good cause to waive this
requirement. Under the APA, we may
waive notice and public procedure if we
find good cause that prior notice and
comment are impracticable,
unnecessary, or contrary to the public
interest. We find that the procedure for
notice and comment is unnecessary
here, because this document does not
propose to make any substantive
changes to the policies or
methodologies, but simply applies the
formulae used to calculate the inpatient
hospital deductible and hospital and
extended care services coinsurance
amounts as statutorily directed and we
can exercise no discretion in following
the formulae. Moreover, the statute
establishes the time period for which
the deductible and coinsurance amounts
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2019
2018
$1,364
341
682
170.50
2019
7.19
1.72
0.84
33.15
7.23
1.72
0.85
33.34
will apply, so we also do not have any
discretion in that regard. Therefore, we
find good cause to waive notice and
comment procedures, if such
procedures are required at all.
VI. Collection of Information
Requirements
This document does not impose
information collection requirements,
that is, reporting, recordkeeping or
third-party disclosure requirements.
Consequently, there is no need for
review by the Office of Management and
Budget under the authority of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.).
VII. Regulatory Impact Analysis
A. Statement of Need
Section 1813(b)(2) of the Act requires
the Secretary to publish, between
September 1 and September 15 of each
year, the amounts of the inpatient
hospital deductible and hospital and
extended care services coinsurance
applicable for services furnished in the
following CY.
B. Overall Impact
We have examined the impacts of this
notice in accordance with 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,
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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), the Congressional
Review Act (5 U.S.C. 804(2)), and
Executive Order 13771 on Reducing
Regulation and Controlling Regulatory
Costs (January 30, 2017).
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). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule: (1) Having an annual
effect on the economy of $100 million
or more in any 1 year, or adversely and
materially affecting a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or state, local or tribal
governments or communities (also
referred to as ‘‘economically
significant’’); (2) creating a serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
economically significant effects ($100
million or more in any 1 year). Although
we do not consider this notice to
constitute a substantive rule, this notice
is economically significant under
section 3(f)(1) of Executive Order 12866.
As stated in section IV of this notice, we
estimate that the total increase in costs
to beneficiaries associated with this
notice is about $390 million due to: (1)
The increase in the deductible and
coinsurance amounts; and (2) the
increase in the number of deductibles
and daily coinsurance amounts paid.
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
hospitals and most other providers and
suppliers are small entities, either by
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nonprofit status or by having revenues
of less than $7.5 million to $38.5
million in any 1 year (for details, see the
Small Business Administration’s
website at https://www.sba.gov/content/
small-business-size-standards).
Individuals and states are not included
in the definition of a small entity. This
annual notice announces the Medicare
Part A deductible and coinsurance
amounts for CY 2019 and will have an
impact on the Medicare beneficiaries.
As a result, we are not preparing an
analysis for the RFA because the
Secretary has determined that this
notice will not have a significant
economic impact on a substantial
number of small entities.
In addition, section 1102(b) of the
Social Security Act requires us to
prepare a RIA if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 604 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a metropolitan statistical area and has
fewer than 100 beds. This annual notice
announces the Medicare Part A
deductible and coinsurance amounts for
CY 2019 and will have an impact on the
Medicare beneficiaries. As a result, we
are not preparing an analysis for section
1102(b) of the Act because the Secretary
has determined that this notice will 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 2018, that
threshold is approximately $150
million. This notice does not impose
mandates that will have a consequential
effect of $150 million or more on state,
local, or tribal governments or on the
private sector.
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.
This notice will not have a substantial
direct effect on state or local
governments, preempt state law, or
otherwise have Federalism implications.
Executive Order 13771, titled
‘‘Reducing Regulation and Controlling
Regulatory Costs,’’ was issued on
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January 30, 2017 (82 FR 9339, February
3, 2017). It has been determined that
this notice is a transfer notice that does
not impose more than de minimis costs
and thus is not a regulatory action for
the purposes of E.O. 13771.
Consistent with the Congressional
Review Act provisions of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (5 U.S.C. 801 et
seq.), this notice has been transmitted to
the Congress and the Comptroller
General for review.
In accordance with the provisions of
Executive Order 12866, this notice was
reviewed by the Office of Management
and Budget.
Although this notice does not
constitute a substantive rule, we
nevertheless prepared this Impact
Analysis in the interest of ensuring that
the impacts of this notice are fully
understood.
Dated: October 3, 2018.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: October 11, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2018–22526 Filed 10–12–18; 11:15 am]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
[CMS–8070–N]
RIN 0938–AT35
Medicare Program; Medicare Part B
Monthly Actuarial Rates, Premium
Rates, and Annual Deductible
Beginning January 1, 2019
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Notice.
AGENCY:
This notice announces the
monthly actuarial rates for aged (age 65
and over) and disabled (under age 65)
beneficiaries enrolled in Part B of the
Medicare Supplementary Medical
Insurance (SMI) program beginning
January 1, 2019. In addition, this notice
announces the monthly premium for
aged and disabled beneficiaries, the
deductible for 2019, and the incomerelated monthly adjustment amounts to
be paid by beneficiaries with modified
adjusted gross income above certain
threshold amounts. The monthly
actuarial rates for 2019 are $264.90 for
aged enrollees and $315.40 for disabled
SUMMARY:
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]]>Agencies
[Federal Register Volume 83, Number 201 (Wednesday, October 17, 2018)]
[Notices]
[Pages 52459-52462]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22526]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8068-N]
RIN 0938-AT33
Medicare Program; CY 2019 Inpatient Hospital Deductible and
Hospital and Extended Care Services Coinsurance Amounts
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice announces the inpatient hospital deductible and
the hospital and extended care services coinsurance amounts for
services furnished in calendar year (CY) 2019 under Medicare's Hospital
Insurance Program (Medicare Part A). The Medicare statute specifies the
formulae used to determine these amounts. For CY 2019, the inpatient
hospital deductible will be $1,364. The daily coinsurance amounts for
CY 2019 will be: $341 for the 61st through 90th day of hospitalization
in a benefit period; $682 for lifetime reserve days; and $170.50 for
the 21st through 100th day of extended care services in a skilled
nursing facility in a benefit period.
DATES: Effective Date: This notice is effective on January 1, 2019.
FOR FURTHER INFORMATION CONTACT: Yaminee Thaker, (410) 786-7921 for
general information. Gregory J. Savord, (410) 786-1521 for case-mix
analysis.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1813 of the Social Security Act (the Act) provides for an
inpatient hospital deductible to be subtracted from the amount payable
by Medicare for inpatient hospital services furnished to a beneficiary.
It also provides for certain coinsurance amounts to be subtracted from
the amounts payable by Medicare for inpatient hospital and extended
care services. Section 1813(b)(2) of the Act requires the Secretary of
the Department of Health and Human Services (the Secretary) to
determine and publish each year the amount of the inpatient hospital
deductible and the hospital and
[[Page 52460]]
extended care services coinsurance amounts applicable for services
furnished in the following calendar year (CY).
II. Computing the Inpatient Hospital Deductible for CY 2019
Section 1813(b) of the Act prescribes the method for computing the
amount of the inpatient hospital deductible. The inpatient hospital
deductible is an amount equal to the inpatient hospital deductible for
the preceding CY, adjusted by our best estimate of the payment-weighted
average of the applicable percentage increases (as defined in section
1886(b)(3)(B) of the Act) used for updating the payment rates to
hospitals for discharges in the fiscal year (FY) that begins on October
1 of the same preceding CY, and adjusted to reflect changes in real
case-mix. The adjustment to reflect real case-mix is determined on the
basis of the most recent case-mix data available. The amount determined
under this formula is rounded to the nearest multiple of $4 (or, if
midway between two multiples of $4, to the next higher multiple of $4).
Under section 1886(b)(3)(B)(i)(XX) of the Act, the percentage
increase used to update the payment rates for FY 2019 for hospitals
paid under the inpatient prospective payment system is the market
basket percentage increase, otherwise known as the market basket
update, reduced by 0.75 percentage points (see section
1886(b)(3)(B)(xii)(V) of the Act), and an adjustment based on changes
in the economy-wide productivity (the multifactor productivity (MFP)
adjustment) (see section 1886(b)(3)(B)(xi)(II) of the Act). Under
section 1886(b)(3)(B)(viii) of the Act, for FY 2019, the applicable
percentage increase for hospitals that do not submit quality data as
specified by the Secretary is reduced by one quarter of the market
basket update. We are estimating that after accounting for those
hospitals receiving the lower market basket update in the payment-
weighted average update, the calculated deductible will not be
affected, since the majority of hospitals submit quality data and
receive the full market basket update. Section 1886(b)(3)(B)(ix) of the
Act requires that any hospital that is not a meaningful electronic
health record (EHR) user (as defined in section 1886(n)(3) of the Act)
will have three-quarters of the market basket update reduced by 100
percent for FY 2017 and each subsequent fiscal year. We are estimating
that after accounting for these hospitals receiving the lower market
basket update, the calculated deductible will not be affected, since
the majority of hospitals are meaningful EHR users and are expected to
receive the full market basket update.
Under section 1886 of the Act, the percentage increase used to
update the payment rates for FY 2019 for hospitals excluded from the
inpatient prospective payment system is as follows:
The percentage increase for long term care hospitals is
the market basket percentage increase reduced by 0.75 percentage points
and the MFP adjustment (see sections 1886(m)(3)(A) and 1886(m)(4)(F) of
the Act). In addition, these hospitals may also be impacted by the
quality reporting adjustments and the site-neutral payment rates (see
sections 1886(m)(5) and 1886(m)(6) of the Act).
The percentage increase for inpatient rehabilitation
facilities is the market basket percentage increase reduced by a
productivity adjustment in accordance with section 1886(j)(3)(C)(ii)(I)
of the Act, and further reduced by 0.75 percentage points in accordance
with sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act. In
addition, these hospitals may also be impacted by the quality reporting
adjustments (see section 1886(j)(7)of the Act).
The percentage increase used to update the payment rate
for inpatient psychiatric facilities is the market basket percentage
increase reduced by 0.75 percentage points and the MFP adjustment (see
sections 1886(s)(2)(A)(i), 1886(s)(2)(A)(ii), and 1886(s)(3)(E) of the
Act). In addition, these hospitals may also be impacted by the quality
reporting adjustments (see section 1886(s)(4) of the Act).
The percentage increase for other types of hospitals
excluded from the inpatient prospective payment system (for example,
cancer hospitals, children's hospitals, and hospitals located outside
the 50 States, the District of Columbia, and Puerto Rico) is the market
basket percentage increase (see section 1886(b)(3)(B)(ii)(VIII) of the
Act).
The Inpatient Prospective Payment System market basket percentage
increase for FY 2019 is 2.9 percent and the MFP adjustment is 0.8
percentage point, as announced in the final rule that appeared in the
Federal Register on August 17, 2018 entitled, ``Hospital Inpatient
Prospective Payment System for Acute Care Hospitals and the Long-Term
Care Hospital Prospective Payment System and Fiscal Year 2019 Rates''
(83 FR 41144). Therefore, the percentage increase for hospitals paid
under the inpatient prospective payment system that submit quality data
and are meaningful EHR users is 1.35 percent (that is, the FY 2019
market basket update of 2.9 percent less the MFP adjustment of 0.8
percentage point and less 0.75 percentage point). The average payment
percentage increase for hospitals excluded from the inpatient
prospective payment system is 1.62 percent. This average includes long
term care hospitals, inpatient rehabilitation facilities, and other
hospitals excluded from the inpatient prospective payment system.
Weighting these percentages in accordance with payment volume, our best
estimate of the payment-weighted average of the increases in the
payment rates for FY 2019 is 1.39 percent.
To develop the adjustment to reflect changes in real case-mix, we
first calculated an average case-mix for each hospital that reflects
the relative costliness of that hospital's mix of cases compared to
those of other hospitals. We then computed the change in average case-
mix for hospitals paid under the Medicare inpatient prospective payment
system in FY 2018 compared to FY 2017. (We excluded from this
calculation hospitals whose payments are not based on the inpatient
prospective payment system because their payments are based on
alternate prospective payment systems or reasonable costs.) We used
Medicare bills from prospective payment hospitals that we received as
of July 2018. These bills represent a total of about 7.3 million
Medicare discharges for FY 2018 and provide the most recent case-mix
data available at this time. Based on these bills, the change in
average case-mix in FY 2018 is 1.33 percent. Based on these bills and
past experience, we expect the overall case mix change to be 1.8
percent as the year progresses and more FY 2018 data become available.
Section 1813 of the Act requires that the inpatient hospital
deductible be adjusted only by that portion of the case-mix change that
is determined to be real. Real case-mix is that portion of case-mix
that is due to changes in the mix of cases in the hospital and not due
to coding optimization. Over the past several years, we have observed
total case mix increases of about 0.5 percent per year and have assumed
that they are real. Thus, since we do not have further information at
this time, we expect that 0.5 percent of the 1.8 percent change in
average case-mix for FY 2018 will be real.
Thus as stated above, the estimate of the payment-weighted average
of the applicable percentage increases used for updating the payment
rates is 1.39 percent, and the real case-mix adjustment factor for the
deductible is 0.5 percent. Therefore, using the statutory formula as
stated in section
[[Page 52461]]
1813(b) of the Act, we calculate the inpatient hospital deductible for
services furnished in CY 2019 to be $1,364. This deductible amount is
determined by multiplying $1,340 (the inpatient hospital deductible for
CY 2018 (82 FR 55367)) by the payment-weighted average increase in the
payment rates of 1.0139 multiplied by the increase in real case-mix of
1.005, which equals $1,365.42 and is rounded to $1,364.
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for CY 2019
The coinsurance amounts provided for in section 1813 of the Act are
defined as fixed percentages of the inpatient hospital deductible for
services furnished in the same CY. The increase in the deductible
generates increases in the coinsurance amounts. For inpatient hospital
and extended care services furnished in CY 2019, in accordance with the
fixed percentages defined in the law, the daily coinsurance for the
61st through 90th day of hospitalization in a benefit period will be
$341 (one-fourth of the inpatient hospital deductible as stated in
section 1813(a)(1)(A) of the Act); the daily coinsurance for lifetime
reserve days will be $682 (one-half of the inpatient hospital
deductible as stated in section 1813(a)(1)(B) of the Act); and the
daily coinsurance for the 21st through 100th day of extended care
services in a skilled nursing facility (SNF) in a benefit period will
be $170.50 (one-eighth of the inpatient hospital deductible as stated
in section 1813(a)(3) of the Act).
IV. Cost to Medicare Beneficiaries
The Table below summarizes the deductible and coinsurance amounts
for CYs 2018 and 2019, as well as the number of each that is estimated
to be paid.
Part A Deductible and Coinsurance Amounts for Calendar Years 2018 and 2019
----------------------------------------------------------------------------------------------------------------
Value Number paid (in millions)
Type of cost sharing ---------------------------------------------------------------
2018 2019 2018 2019
----------------------------------------------------------------------------------------------------------------
Inpatient hospital deductible................... $1,340 $1,364 7.19 7.23
Daily coinsurance for 61st-90th Day............. 335 341 1.72 1.72
Daily coinsurance for lifetime reserve days..... 670 682 0.84 0.85
SNF coinsurance................................. 167.50 170.50 33.15 33.34
----------------------------------------------------------------------------------------------------------------
The estimated total increase in costs to beneficiaries is about
$390 million (rounded to the nearest $10 million) due to: (1) The
increase in the deductible and coinsurance amounts; and (2) the
increase in the number of deductibles and daily coinsurance amounts
paid. We determine the increase in cost to beneficiaries by calculating
the difference between the 2018 and 2019 deductible and coinsurance
amounts multiplied by the estimated increase in the number of
deductible and coinsurance amounts paid.
V. Waiver of Proposed Notice and Comment Period
Section 1813(b)(2) of the Act requires publication of the inpatient
hospital deductible and all coinsurance amounts--the hospital and
extended care services coinsurance amounts--between September 1 and
September 15 of the year preceding the year to which they will apply.
We ordinarily publish a notice of proposed rulemaking in the Federal
Register and invite public comment prior to a rule taking effect in
accordance with section 553(b) of the Administrative Procedure Act
(APA) and section 1871 of the Act. However, we believe that the
policies being publicized in this document do not constitute agency
rulemaking. Rather, the statute requires that the agency determine and
publish the inpatient hospital deductible and hospital and extended
care services coinsurance amounts for each calendar year in accordance
with the statutory formulae, and we are simply notifying the public of
the changes to the Medicare Part A deductible and coinsurance amounts
for CY 2019. To the extent any of the policies articulated in this
document constitute interpretations of the statute's requirements or
procedures that will be used to implement the statute's directive, they
are interpretive rules, general statements of policy, and rules of
agency organization, procedure, or practice, which are not subject to
notice and comment rulemaking under the APA.
To the extent that notice and comment rulemaking would otherwise
apply, we find good cause to waive this requirement. Under the APA, we
may waive notice and public procedure if we find good cause that prior
notice and comment are impracticable, unnecessary, or contrary to the
public interest. We find that the procedure for notice and comment is
unnecessary here, because this document does not propose to make any
substantive changes to the policies or methodologies, but simply
applies the formulae used to calculate the inpatient hospital
deductible and hospital and extended care services coinsurance amounts
as statutorily directed and we can exercise no discretion in following
the formulae. Moreover, the statute establishes the time period for
which the deductible and coinsurance amounts will apply, so we also do
not have any discretion in that regard. Therefore, we find good cause
to waive notice and comment procedures, if such procedures are required
at all.
VI. Collection of Information Requirements
This document does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.).
VII. Regulatory Impact Analysis
A. Statement of Need
Section 1813(b)(2) of the Act requires the Secretary to publish,
between September 1 and September 15 of each year, the amounts of the
inpatient hospital deductible and hospital and extended care services
coinsurance applicable for services furnished in the following CY.
B. Overall Impact
We have examined the impacts of this notice in accordance with
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,
[[Page 52462]]
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), the Congressional Review Act (5 U.S.C. 804(2)), and Executive
Order 13771 on Reducing Regulation and Controlling Regulatory Costs
(January 30, 2017).
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). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). Although we do not consider this notice to constitute a
substantive rule, this notice is economically significant under section
3(f)(1) of Executive Order 12866. As stated in section IV of this
notice, we estimate that the total increase in costs to beneficiaries
associated with this notice is about $390 million due to: (1) The
increase in the deductible and coinsurance amounts; and (2) the
increase in the number of deductibles and daily coinsurance amounts
paid.
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 hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of less than $7.5 million to $38.5 million in any 1 year (for
details, see the Small Business Administration's website at https://www.sba.gov/content/small-business-size-standards). Individuals and
states are not included in the definition of a small entity. This
annual notice announces the Medicare Part A deductible and coinsurance
amounts for CY 2019 and will have an impact on the Medicare
beneficiaries. As a result, we are not preparing an analysis for the
RFA because the Secretary has determined that this notice will not have
a significant economic impact on a substantial number of small
entities.
In addition, section 1102(b) of the Social Security Act requires us
to prepare a RIA if a rule may have a significant impact on the
operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. This annual notice
announces the Medicare Part A deductible and coinsurance amounts for CY
2019 and will have an impact on the Medicare beneficiaries. As a
result, we are not preparing an analysis for section 1102(b) of the Act
because the Secretary has determined that this notice will 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 2018, that
threshold is approximately $150 million. This notice does not impose
mandates that will have a consequential effect of $150 million or more
on state, local, or tribal governments or on the private sector.
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. This notice will not have a substantial direct effect on
state or local governments, preempt state law, or otherwise have
Federalism implications.
Executive Order 13771, titled ``Reducing Regulation and Controlling
Regulatory Costs,'' was issued on January 30, 2017 (82 FR 9339,
February 3, 2017). It has been determined that this notice is a
transfer notice that does not impose more than de minimis costs and
thus is not a regulatory action for the purposes of E.O. 13771.
Consistent with the Congressional Review Act provisions of the
Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C.
801 et seq.), this notice has been transmitted to the Congress and the
Comptroller General for review.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Although this notice does not constitute a substantive rule, we
nevertheless prepared this Impact Analysis in the interest of ensuring
that the impacts of this notice are fully understood.
Dated: October 3, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: October 11, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2018-22526 Filed 10-12-18; 11:15 am]
BILLING CODE 4120-01-P
