Department of Health and Human Services September 18, 2006 – Federal Register Recent Federal Regulation Documents

This notice is to inform interested parties of an opportunity to apply to participate in the Medicare Hospital Gainsharing Demonstration being implemented by CMS. The Medicare Hospital Gainsharing Demonstration authorized under Section 5007 of the Deficit Reduction Act (DRA) of 2005 was established to test and evaluate methodologies and arrangements between hospitals and physicians designed to govern the utilization of inpatient hospital resources and physician work. The purpose of this demonstration is to improve the quality and efficiency of care provided to Medicare beneficiaries and to develop improved operational and financial hospital performance with the sharing of remuneration payments between hospitals and physicians in six projects, each project consisting of one hospital. Two projects must be rural. This demonstration will be limited in scope: we intend to focus on the short-term impacts of gainsharing programs.

This notice announces the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in calendar year (CY) 2007 under Medicare's Hospital Insurance program (Medicare Part A). The Medicare statute specifies the formulae used to determine these amounts. For CY 2007, the inpatient hospital deductible will be $992. The daily coinsurance amounts for CY 2007 will be: (a) $248 for the 61st through 90th day of hospitalization in a benefit period; (b) $496 for lifetime reserve days; and (c) $124 for the 21st through 100th day of extended care services in a skilled nursing facility in a benefit period.

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, 2007. In addition, this notice announces the standard monthly premium for aged and disabled beneficiaries, as well as the income-related monthly adjustment amounts to be paid by beneficiaries with modified adjusted gross income above certain threshold amounts, as required by section 811 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, as modified by the Deficit Reduction Act of 2005. It also announces the annual deductible to be paid by all beneficiaries during 2007. The standard monthly Part B premium is equal to 50 percent of the monthly actuarial rate for aged enrollees or approximately 25 percent of the expected average total cost of Part B coverage for aged enrollees, plus any applicable income-related monthly adjustment amount. If a beneficiary has to pay an income-related monthly adjustment amount, they may have to pay a total monthly premium equal to 35, 50, 65, or 80 percent of the total cost of Part B coverage, by the end of the 3-year transition period. However, for 2007, the beneficiary is only responsible for one-third of any applicable income- related monthly adjustment amount. The monthly actuarial rates for 2007 are $187.00 for aged enrollees and $197.30 for disabled enrollees. The monthly Part B premium rates to be paid in 2007, including the income-related monthly adjustment amounts, are $93.50 (the standard premium), $106.00, $124.70, $143.40, and $162.10. The specific amount payable by beneficiaries depends on their income level and income tax filing status. (The 2006 premium rate paid by all beneficiaries was $88.50.) The Part B deductible for 2007 is $131.00 for all beneficiaries.