Professional Documents
Culture Documents
Part II
Department of
Health and Human
Services
Centers for Medicare & Medicaid
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23528 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
DEPARTMENT OF HEALTH AND DRGs); applications for new medical your written comments (one original
HUMAN SERVICES services and technologies add-on and two copies) before the close of the
payments; wage index reform changes comment period to either of the
Centers for Medicare & Medicaid and the wage data, including the following addresses:
Services occupational mix data, used to compute a. Room 445–G, Hubert H. Humphrey
the proposed FY 2009 wage indices; Building, 200 Independence Avenue,
42 CFR Parts 411, 412, 413, 422, and submission of hospital quality data; SW., Washington, DC 20201.
489 proposed changes to the postacute care (Because access to the interior of the
transfer policy relating to transfers to HHH Building is not readily available to
[CMS–1390–P]
home for the furnishing of home health persons without Federal Government
RIN 0938–AP15 services; and proposed policy changes identification, commenters are
relating to the requirements for encouraged to leave their comments in
Medicare Program; Proposed Changes furnishing hospital emergency services the CMS drop slots located in the main
to the Hospital Inpatient Prospective under the Emergency Medical lobby of the building. A stamp-in clock
Payment Systems and Fiscal Year 2009 Treatment and Labor Act of 1986 is available for persons wishing to retain
Rates; Proposed Changes to (EMTALA). a proof of filing by stamping in and
Disclosure of Physician Ownership in In addition, we are proposing policy retaining an extra copy of the comments
Hospitals and Physician Self-Referral changes relating to disclosure to being filed.)
Rules; Proposed Collection of patients of physician ownership or b. 7500 Security Boulevard,
Information Regarding Financial investment interests in hospitals and Baltimore, MD 21244–1850.
Relationships Between Hospitals and soliciting public comments on a If you intend to deliver your
Physicians proposed collection of information comments to the Baltimore address,
regarding financial relationships please call telephone number (410) 786-
AGENCY: Centers for Medicare and between hospitals and physicians. We
Medicaid Services (CMS), HHS. 7195 in advance to schedule your
are also proposing changes or soliciting arrival with one of our staff members.
ACTION: Proposed rule. comments on issues relating to policies Comments mailed to the addresses
on physician self-referrals. indicated as appropriate for hand or
SUMMARY: We are proposing to revise the
DATES: To be assured consideration, courier delivery may be delayed and
Medicare hospital inpatient prospective
payment systems (IPPS) for operating comments must be received at one of received after the comment period.
and capital-related costs to implement the addresses provide below, no later Submission of comments on
changes arising from our continuing than 5 p.m. E.S.T. on June 13, 2008. paperwork requirements. You may
experience with these systems, and to ADDRESSES: When commenting on submit comments on this document’s
implement certain provisions made by issues presented in this proposed rule, paperwork requirements by following
the Deficit Reduction Act of 2005, the please refer to filecode CMS–1390–P. the instructions at the end of the
Medicare Improvements and Extension Because of staff and resource ‘‘Collection of Information
Act, Division B, Title I of the Tax Relief limitations, we cannot accept comments Requirements’’ section in this
and Health Care Act of 2006, and the by facsimile (FAX) transmission. document.
TMA, Abstinence Education, and QI You may submit comments in one of For information on viewing public
four ways (please choose only one of the comments, see the beginning of the
Programs Extension Act of 2007. In
ways listed): SUPPLEMENTARY INFORMATION section.
addition, in the Addendum to this
1. Electronically. You may submit
proposed rule, we describe the proposed electronic comments on this regulation FOR FURTHER INFORMATION, CONTACT:
changes to the amounts and factors used to http://www.regulations.gov. Follow Michele Hudson, (410) 786–4487,
to determine the rates for Medicare the instructions for ‘‘Comment or Operating Prospective Payment, MS–
hospital inpatient services for operating Submission’’ and enter the file code DRGs, Wage Index, New Medical
costs and capital-related costs. These CMS–1390–P to submit comments on Service and Technology Add-On
proposed changes would be applicable this proposed rule. Payments, Hospital Geographic
to discharges occurring on or after 2. By regular mail. You may mail Reclassifications, and Postacute Care
October 1, 2008. We also are setting written comments (one original and two Transfer Issues.
forth the proposed update to the rate-of- copies) to the following address ONLY: Tzvi Hefter, (410) 786–4487, Capital
increase limits for certain hospitals and Centers for Medicare & Medicaid Prospective Payment, Excluded
hospital units excluded from the IPPS Services, Department of Health and Hospitals, Direct and Indirect Graduate
that are paid on a reasonable cost basis Human Services, Attention: CMS–1390– Medical Education, MS–LTC–DRGs,
subject to these limits. The proposed P, P.O. Box 8011, Baltimore, MD 21244– EMTALA, Hospital Emergency Services,
updated rate-of-increase limits would be 1850. and Hospital-within-Hospital Issues.
effective for cost reporting periods Please allow sufficient time for mailed Siddhartha Mazumdar, (410) 786–
beginning on or after October 1, 2008. comments to be received before the 6673, Rural Community Hospital
Among the other policy decisions and close of the comment period. Demonstration Program Issues.
changes that we are proposing to make 3. By express or overnight mail. You Sheila Blackstock, (410) 786–3502,
are changes related to: Limited proposed may send written comments (one Quality Data for Annual Payment
revisions of the classification of cases to original and two copies) to the following Update Issues.
Medicare severity diagnosis-related address ONLY: Centers for Medicare & Thomas Valuck, (410) 786–7479,
groups (MS–DRGs), proposals to address Medicaid Services, Department of Hospital Value-Based Purchasing and
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charge compression issues in the Health and Human Services, Attention: Readmissions to Hospital Issues.
calculation of MS–DRG relative weights, CMS–1390–P, Mail Stop C4–26–05, Anne Hornsby, (410) 786–1181,
the proposed revisions to the 7500 Security Boulevard, Baltimore, MD Collection of Managed Care Encounter
classifications and relative weights for 21244–1850. Data Issues.
the Medicare severity long-term care 4. By hand or courier. If you prefer, Jacqueline Proctor, (410) 786–8852,
diagnosis-related groups (MS–LTC– you may deliver (by hand or courier) Disclosure of Physician Ownership in
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23529
Hospitals and Financial Relationships AHIC American Health Information HHA Home health agency
between Hospitals and Physicians Community HHS Department of Health and Human
Issues. AHRQ Agency for Healthcare Research and Services
Quality HIC Health insurance card
Lisa Ohrin, (410) 786–4565, and Don
AMA American Medical Association HIPAA Health Insurance Portability and
Romano, (410) 786–1404, Physician AMGA American Medical Group Accountability Act of 1996, Pub. L. 104–
Self-Referral Issues. Association 191
SUPPLEMENTARY INFORMATION: AMI Acute myocardial infarction HIPC Health Information Policy Council
Inspection of Public Comments: All AOA American Osteopathic Association HIS Health information system
comments received before the close of APR DRG All Patient Refined Diagnosis HIT Health information technology
the comment period are available for Related Group System HMO Health maintenance organization
ASC Ambulatory surgical center HPMP Hospital Payment Monitoring
viewing by the public, including any ASITN American Society of Interventional Program
personally identifiable or confidential and Therapeutic Neuroradiology HSA Health savings account
business information that is included in BBA Balanced Budget Act of 1997, Pub. L. HSCRC [Maryland] Health Services Cost
a comment. We post all comments 105–33 Review Commission
received before the close of the BBRA Medicare, Medicaid, and SCHIP HSRV Hospital-specific relative value
comment period on the following Web [State Children’s Health Insurance HSRVcc Hospital-specific relative value
site as soon as possible after they have Program] Balanced Budget Refinement Act cost center
of 1999, Pub. L. 106–113 HQA Hospital Quality Alliance
been received: http:// BIPA Medicare, Medicaid, and SCHIP [State
www.regulations.gov. Follow the search HQI Hospital Quality Initiative
Children’s Health Insurance Program] HWH Hospital-within-a hospital
instructions on that Web site to view Benefits Improvement and Protection Act ICD–9–CM International Classification of
public comments. of 2000, Pub. L. 106–554 Diseases, Ninth Revision, Clinical
Comments received timely will also BLS Bureau of Labor Statistics Modification
be available for public inspection, CAH Critical access hospital ICD–10–PCS International Classification of
generally beginning approximately 3 CARE [Medicare] Continuity Assessment Diseases, Tenth Edition, Procedure Coding
weeks after publication of a document, Record & Evaluation [Instrument] System
CART CMS Abstraction & Reporting Tool ICR Information collection requirement
at the headquarters of the Centers for CBSAs Core-based statistical areas
Medicare & Medicaid Services, 7500 IHS Indian Health Service
CC Complication or comorbidity IME Indirect medical education
Security Boulevard, Baltimore, CCR Cost-to-charge ratio
IOM Institute of Medicine
Maryland 21244, Monday through CDAC [Medicare] Clinical Data Abstraction
IPF Inpatient psychiatric facility
Friday of each week from 8:30 a.m. to Center
IPPS [Acute care hospital] inpatient
4 p.m. To schedule an appointment to CDAD Clostridium difficile-associated
prospective payment system
view public comments, phone 1–800– disease
IRF Inpatient rehabilitation facility
CIPI Capital input price index
743–3951. LAMCs Large area metropolitan counties
CMI Case-mix index
CMS Centers for Medicare & Medicaid LTC–DRG Long-term care diagnosis-related
Electronic Access group
Services
This Federal Register document is CMSA Consolidated Metropolitan LTCH Long-term care hospital
also available from the Federal Register Statistical Area MA Medicare Advantage
online database through GPO Access, a COBRA Consolidated Omnibus MAC Medicare Administrative Contractor
service of the U.S. Government Printing Reconciliation Act of 1985, Pub. L. 99–272 MCC Major complication or comorbidity
CoP [Hospital] condition of participation MCE Medicare Code Editor
Office. Free public access is available on MCO Managed care organization
a Wide Area Information Server (WAIS) CPI Consumer price index
CY Calendar year MCV Major cardiovascular condition
through the Internet and via MDC Major diagnostic category
DFRR Disclosure of financial relationship
asynchronous dial-in. Internet users can report MDH Medicare-dependent, small rural
access the database by using the World DRA Deficit Reduction Act of 2005, Pub. L. hospital
Wide Web (the Superintendent of 109–171 MedPAC Medicare Payment Advisory
Documents’ home page address is DRG Diagnosis-related group Commission
http://www.gpoaccess.gov/), by using DSH Disproportionate share hospital MedPAR Medicare Provider Analysis and
local WAIS client software, or by telnet DVT Deep vein thrombosis Review File
ECI Employment cost index MEI Medicare Economic Index
to swais.access.gpo.gov, then login as MGCRB Medicare Geographic Classification
guest (no password required). Dial-in EMR Electronic medical record
EMTALA Emergency Medical Treatment Review Board
users should use communications and Labor Act of 1986, Pub. L. 99–272 MIEA–TRHCA Medicare Improvements and
software and modem to call (202) 512– FAH Federation of Hospitals Extension Act, Division B of the Tax Relief
1661; type swais, then login as guest (no FDA Food and Drug Administration and Health Care Act of 2006, Pub. L. 109–
password required). FHA Federal Health Architecture 432
FIPS Federal information processing MMA Medicare Prescription Drug,
Acronyms Improvement, and Modernization Act of
standards
AARP American Association of Retired FQHC Federally qualified health center 2003, Pub. L. 108–173
Persons FTE Full-time equivalent MPN Medicare provider number
AAHKS American Association of Hip and FY Fiscal year MRHFP Medicare Rural Hospital Flexibility
Knee Surgeons GAAP Generally Accepted Accounting Program
AAMC Association of American Medical Principles MRSA Methicillin-resistant Staphylococcus
Colleges GAF Geographic Adjustment Factor aureus
ACGME Accreditation Council for Graduate GME Graduate medical education MSA Metropolitan Statistical Area
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23530 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
NCHS National Center for Health Statistics C. Provisions of the Medicare 2. Refining the Medicare Cost Report
NCQA National Committee for Quality Improvements and Extension Act under 3. Timeline for Revising the Medicare Cost
Assurance Division B, Title I of the Tax Relief and Report
NCVHS National Committee on Vital and Health Care Act of 2006 (MIEA–TRHCA) 4. Revenue Codes used in the MedPAR File
Health Statistics D. Provision of the TMA, Abstinence F. Preventable Hospital-Acquired
NECMA New England County Metropolitan Education, and QI Programs Extension Conditions (HACs), Including Infections
Areas Act of 2007 1. General
NQF National Quality Forum E. Major Contents of this Proposed Rule 2. Statutory Authority
NTIS National Technical Information 1. Proposed Changes to MS–DRG 3. Public Input
Service Classifications and Recalibrations of 4. Collaborative Process
NVHRI National Voluntary Hospital Relative Weights 5. Selection Criteria for HACs
Reporting Initiative 2. Proposed Changes to the Hospital Wage 6. HACs Selected in FY 2008 and Proposed
OES Occupational employment statistics Index Changes to Certain Codes
OIG Office of the Inspector General 3. Other Decisions and Proposed Changes a. Foreign Object Retained After Surgery:
OMB Executive Office of Management and to the IPPS for Operating Costs and GME Proposed Inclusion of ICD–9–CM Code
Budget Costs 998.7 (CC)
O.R. Operating room 4. Proposed Changes to the IPPS for b. Pressure Ulcers: Proposed Changes in
OSCAR Online Survey Certification and Capital-Related Costs Code Assignments
Reporting [System] 5. Proposed Changes to the Payment Rates 7. HACs Under Consideration as
PE Pulmonary embolism for Excluded Hospitals and Hospital Additional Candidates
PMSAs Primary metropolitan statistical Units: Rate-of-Increase Percentages a. Surgical Site Infections Following
areas 6. Proposed Changes Relating to Disclosure Elective Surgeries
POA Present on admission of Physician Ownership in Hospitals b. Legionnaires’ Disease
PPI Producer price index 7. Proposed Changes and Solicitation of c. Glycemic Control
PPS Prospective payment system Comments on Physician Self-Referral d. Iatrogenic Pneumothorax
PRM Provider Reimbursement Manual Provisions e. Delirium
ProPAC Prospective Payment Assessment 8. Proposed Collection of Information f. Ventilator-Associated Pneumonia (VAP)
Commission Regarding Financial Relationships g. Deep Vein Thrombosis (DVT)/
PRRB Provider Reimbursement Review between Hospitals and Physicians Pulmonary Embolism (PE)
Board 9. Determining Proposed Prospective h. Staphylococcus aureus Septicemia
PSF Provider-Specific File Payment Operating and Capital Rates i. Clostridium Difficile-Associated Disease
PS&R Provider Statistical and (CDAD)
and Rate-of-Increase Limits
Reimbursement (System) j. Methicillin-Resistant Staphylococcus
10. Impact Analysis
QIG Quality Improvement Group, CMS aureus (MRSA)
11. Recommendation of Update Factors for
QIO Quality Improvement Organization 8. Present on Admission (POA) Indicator
Operating Cost Rates of Payment for
RCE Reasonable compensation equivalent Reporting
Inpatient Hospital Services
RHC Rural health clinic 9. Enhancement and Future Issues
12. Disclosure of Financial Relationships a. Risk Adjustment
RHQDAPU Reporting hospital quality data
Report (DFRR) Form b. Rates of HACs
for annual payment update
13. Discussion of Medicare Payment c. Use of POA Information
RNHCI Religious nonmedical health care
Advisory Commission Recommendations d. Transition to ICD–10–PCS
institution
F. Public Comments Received on Issues in e. Application of Nonpayment for HACs to
RRC Rural referral center
Related Rules Other Settings
RUCAs Rural-urban commuting area codes
1. Comments on Phase-Out of the Capital f. Relationship to NQF’s Serious Reportable
RY Rate year
Teaching Adjustment under the IPPS Adverse Events
SAF Standard Analytic File
SCH Sole community hospital Included in the FY 2008 IPPS Final Rule G. Proposed Changes to Specific MS–DRG
SFY State fiscal year with Comment Period Classifications
SIC Standard Industrial Classification 2. Policy Revisions Related to Medicare 1. Pre-MDCs: Artificial Heart Devices
SNF Skilled nursing facility GME Group Affiliations for Hospitals in 2. MDC 1 (Diseases and Disorders of the
SOCs Standard occupational classifications Certain Declared Emergency Areas Nervous System)
SOM State Operations Manual II. Proposed Changes to Medicare Severity a. Transferred Stroke Patients Receiving
TEFRA Tax Equity and Fiscal DRG (MS–DRG) Classifications and Tissue Plasminogen Activator (tPA)
Responsibility Act of 1982, Pub. L. 97–248 Relative Weights b. Intractable Epilepsy with Video
TMA TMA [Transitional Medical A. Background Electroencephalogram (EEG)
Assistance], Abstinence Education, and QI B. MS–DRG Reclassifications 3. MDC 5 (Diseases and Disorders of the
[Qualifying Individuals] Programs 1. General Circulatory System)
Extension Act of 2007, Pub. L. 110–09 2. Yearly Review for Making MS–DRG a. Automatic Implantable Cardioverter-
TJA Total joint arthroplasty Changes Defibrillators (AICD) Lead and Generator
UHDDS Uniform hospital discharge data set C. Adoption of the MS–DRGs in FY 2008 Procedures
VAP Ventilator-associated pneumonia D. MS–DRG Documentation and Coding b. Left Atrial Appendage Device
VBP Value-based purchasing Adjustment, Including the Applicability 4. MDC 8 (Diseases and Disorders of the
to the Hospital-Specific Rates and the Musculoskeletal System and Connective
Table of Contents Puerto Rico-Specific Standardized Tissue): Hip and Knee Replacements and
I. Background Amount Revisions
A. Summary 1. MS–DRG Documentation and Coding a. Brief History of Development of Hip and
1. Acute Care Hospital Inpatient Adjustment Knee Replacement Codes
Prospective Payment System (IPPS) 2. Application of the Documentation and b. Prior Recommendations of the AAHKS
2. Hospitals and Hospital Units Excluded Coding Adjustment to the Hospital- c. Adoption of MS–DRGs for Hip and Knee
From the IPPS Specific Rates Replacements for FY 2008 and AAHKS’
a. Inpatient Rehabilitation Facilities (IRFs) 3. Application of the Documentation and Recommendations
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b. Long-Term Care Hospitals (LTCHs) Coding Adjustment to Puerto Rico- d. AAHKS’ Recommendations for FY 2009
c. Inpatient Psychiatric Facilities (IPFs) Specific Standardized Amount e. CMS’ Response to AAHKS’
3. Critical Access Hospitals (CAHs) 4. Potential Additional Payment Recommendations
4. Payments for Graduate Medical Adjustments in FYs 2010 through 2012 f. Conclusion
Education (GME) E. Refinement of the MS–DRG Relative 5. MDC 18 (Infections and Parasitic
B. Provisions of the Deficit Reduction Act Weight Calculation Diseases Systemic or Unspecified Sites):
of 2005 (DRA) 1. Background Severe Sepsis
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23531
6. MDC 21 (Injuries, Poisonings and Toxic a. Proposed Revision of the Reclassification 2. Proposed Quality Measures for FY 2010
Effects of Drugs): Traumatic Average Hourly Wage Comparison and Subsequent Years
Compartment Syndrome Criteria a. Proposed Quality Measures for FY 2010
7. Medicare Code Editor (MCE) Changes b. Within-State Budget Neutrality b. Possible New Quality Measures,
a. List of Unacceptable Principal Diagnoses Adjustment for the Rural and Imputed Measure Sets, and Program
in MCE Floors Requirements for FY 2011 and
b. Diagnoses Allowed for Male Only Edit c. Within-State Budget Neutrality Subsequent Years
c. Limited Coverage Edit Adjustment for Geographic c. Considerations in Expanding and
8. Surgical Hierarchies Reclassification Updating Quality Measures Under the
9. CC Exclusions List C. Core-Based Statistical Areas for the RHQDAPU Program
a. Background Hospital Wage Index 3. Form and Manner and Timing of Quality
b. CC Exclusions List for FY 2009 D. Proposed Occupational Mix Adjustment Data Submission
10. Review of Procedure Codes in MS– to the Proposed FY 2009 Wage Index 4. Current and Proposed RHQDAPU
DRGs 981, 982, and 983; 984, 985, and 1. Development of Data for the Proposed Program Procedures
FY 2009 Occupational Mix Adjustment a. RHQDAPU Program Procedures for FY
986; and 987, 988, and 989
2. Calculation of the Proposed 2009
a. Moving Procedure Codes from MS–DRG
Occupational Mix Adjustment for FY b. Proposed RHQDAPU Program
981 through 983 or MS–DRG 987 2009 Procedures for FY 2010
through 989 to MDCs 3. 2007–2008 Occupational Mix Survey for 5. Current and Proposed HCAHPS
b. Reassignment of Procedures among MS– the FY 2010 Wage Index Requirements
DRGs 981 through 983, 984 through 986, E. Worksheet S–3 Wage Data for the a. FY 2009 HCAHPS Requirements
and 987 through 989 Proposed FY 2009 Wage Index b. Proposed FY 2010 HCAHPS
c. Adding Diagnosis or Procedure Codes to 1. Included Categories of Costs Requirements
MDCs 2. Excluded Categories of Costs 6. Current and Proposed Chart Validation
11. Changes to the ICD–9–CM Coding 3. Use of Wage Index Data by Providers Requirements
System Other Than Acute Care Hospitals Under a. Chart Validation Requirements for FY
H. Recalibration of MS–DRG Weights the IPPS 2009
I. Proposed Medicare Severity Long-Term F. Verification of Worksheet S–3 Wage b. Proposed Chart Validation Requirements
Care Diagnosis-Related Group (MS–LTC– Data for FY 2010
DRG) Reclassifications and Relative 1. Wage Data for Multicampus Hospitals c. Chart Validation Methods and
Weights for LTCHs for FY 2009 2. New Orleans’ Post-Katrina Wage Index Requirements Under Consideration for
1. Background G. Method for Computing the Proposed FY FY 2011 and Subsequent Years
2. Proposed Changes in the MS–LTC–DRG 2009 Unadjusted Wage Index 7. Data Attestation Requirements
Classifications H. Analysis and Implementation of the a. Proposed Change to Requirements for FY
a. Background Proposed Occupational Mix Adjustment 2009
b. Patient Classifications into MS–LTC– and the Proposed FY 2009 Occupational b. Proposed Requirements for FY 2010
DRGs Mix Adjustment Wage Index 8. Public Display Requirements
3. Development of the Proposed FY 2009 I. Proposed Revisions to the Wage Index 9. Proposed Reconsideration and Appeal
MS–LTC–DRG Relative Weights Based on Hospital Redesignations Procedures
a. General Overview of Development of the 1. General 10. Proposed RHQDAPU Program
MS–LTC–DRG Relative Weights 2. Effects of Reclassification/Redesignation Withdrawal Deadline for FYs 2009 and
b. Data 3. FY 2009 MGCRB Reclassifications 2010
c. Hospital-Specific Relative Value (HSRV) 4. FY 2008 Policy Clarifications and 11. Requirements for New Hospitals
Methodology Revisions 12. Electronic Medical Records
d. Treatment of Severity Levels in 5. Redesignations of Hospitals under C. Medicare Hospital Value-Based
Developing Proposed Relative Weights Section 1886(d)(8)(B) of the Act Purchasing (VBP)
e. Proposed Low-Volume MS–LTC–DRGs 6. Reclassifications under Section 1. Medicare Hospital VBP Plan Report to
4. Steps for Determining the Proposed FY 1886(d)(8)(B) of the Act Congress
2009 MS–LTC–DRG Relative Weights J. Proposed FY 2009 Wage Index 2. Testing and Further Development of the
Adjustment Based on Commuting Medicare Hospital VBP Plan
J. Proposed Add-On Payments for New
Patterns of Hospital Employees D. Sole Community Hospitals (SCHs) and
Services and Technologies
K. Process for Requests for Wage Index Medicare-Dependent, Small Rural
1. Background
Data Corrections Hospitals (MDHs): Volume Decrease
2. Public Input Before Publication of a
L. Labor-Related Share for the Proposed Adjustment
Notice of Proposed Rulemaking on Add– Wage Index for FY 2009 1. Background
On Payments IV. Other Decisions and Proposed Changes to 2. Volume Decrease Adjustment for SCHs
3. FY 2009 Status of Technologies the IPPS for Operating Costs and GME and MDHs: Data Sources for Determining
Approved for FY 2008 Add-On Payments Costs Core Staff Values
4. FY 2009 Applications for New A. Proposed Changes to the Postacute Care a. Occupational Mix Survey
Technology Add-On Payments Transfer Policy b. AHA Annual Survey
a. CardioWestTM Temporary Total Artificial 1. Background E. Rural Referral Centers (RRCs)
Heart System (CardioWestTM TAH–t) 2. Proposed Policy Change Relating to 1. Case-Mix Index
b. Emphasys Medical Zephyr Transfers to Home with a Written Plan 2. Discharges
Endobronchial Valve (Zephyr EBV) for the Provision of Home Health F. Indirect Medical Education (IME)
c. Oxiplex Services Adjustment
d. TherOx Downstream System 3. Evaluation of MS–DRGs under Postacute 1. Background
5. Proposed Regulatory Change Care Transfer Policy for FY 2009 2. IME Adjustment Factor for FY 2009
III. Proposed Changes to the Hospital Wage B. Reporting of Hospital Quality Data for G. Medicare GME Affiliation Provisions for
Index Annual Hospital Payment Update Teaching Hospitals in Certain Emergency
A. Background 1. Background Situations; Technical Correction
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23532 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
3. Application of the Physician ‘‘Stand in Payment Rates Table 6F.—Revised Procedure Code Titles
the Shoes’’ and the Entity ‘‘Stand in the III. Proposed Changes of Payment Rates for Table 6G.—Additions to the CC Exclusions
Shoes’’ Provisions Acute Care Hospital Inpatient Capital- List (Available through the Internet on
4. Definitions: ‘‘Physician’’ and ‘‘Physician Related Costs for FY 2009 the CMS Web site at: http://
Organization’’ A. Determination of Proposed Federal www.cms.hhs.gov/AcuteInpatientPPS/)
B. Period of Disallowance Hospital Inpatient Capital-Related Table 6H.—Deletions From the CC
C. Gainsharing Arrangements Prospective Payment Rate Update Exclusions List (Available Through the
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Internet on the CMS Web site at: G. Effects of the Proposed Rural Floor and Appendix C—Disclosure of Financial
http://www.cms.hhs.gov/ Imputed Rural Floor, Including the Relationships Report (DFRR) Form
AcuteInpatientPPS/) Proposed Application of Budget
Table 6I.—Complete List of Complication Neutrality at the State Level (Column 6)
I. Background
and Comorbidity (CC) Exclusions H. Effects of the Proposed Wage Index A. Summary
(Available Only Through the Internet on Adjustment for Out-Migration (Column
the CMS Web site at: http:/ 7) 1. Acute Care Hospital Inpatient
www.cms.hhs.gov/AcuteInpatientPPS/) Prospective Payment System (IPPS)
I. Effects of All Proposed Changes with
Table 6J.—Major Complication and
CMI Adjustment Prior to Estimated Section 1886(d) of the Social Security
Comorbidity (MCC) List (Available
Through the Internet on the CMS Web Growth (Column 8) Act (the Act) sets forth a system of
Site at: http://www.cms.hhs.gov/ J. Effects of All Proposed Changes with payment for the operating costs of acute
AcuteInpatientPPS/) CMI Adjustment and Estimated Growth care hospital inpatient stays under
Table 6K.—Complication and Comorbidity (Column 9) Medicare Part A (Hospital Insurance)
(CC) List (Available Through the Internet K. Effects of Policy on Payment based on prospectively set rates. Section
on the CMS Web site at: http:// Adjustment for Low-Volume Hospitals
1886(g) of the Act requires the Secretary
www.cms.hhs.gov/AcuteInpatientPPS/) L. Impact Analysis of Table II
Table 7A.—Medicare Prospective Payment VII. Effects of Other Proposed Policy Changes
to pay for the capital-related costs of
System Selected Percentile Lengths of A. Effects of Proposed Policy on HACs, hospital inpatient stays under a
Stay: FY 2007 MedPAR Update— Including Infections prospective payment system (PPS).
December 2007 GROUPER V25.0 MS– B. Effects of Proposed MS–LTC–DRG Under these PPSs, Medicare payment
DRGs Reclassifications and Relative Weights for hospital inpatient operating and
Table 7B.—Medicare Prospective Payment for LTCHs capital-related costs is made at
System Selected Percentile Lengths of predetermined, specific rates for each
C. Effects of Proposed Policy Change
Stay: FY 2007 MedPAR Update—
December 2007 GROUPER V26.0 MS– Relating to New Medical Service and hospital discharge. Discharges are
DRGs Technology Add-On Payments classified according to a list of
Table 8A.—Proposed Statewide Average D. Effects of Proposed Policy Change diagnosis-related groups (DRGs).
Operating Cost-to-Charge Ratios—March Regarding Postacute Care Transfers to The base payment rate is comprised of
2008 Home Health Services a standardized amount that is divided
Table 8B.—Proposed Statewide Average E. Effects of Proposed Requirements for into a labor-related share and a
Capital Cost-to-Charge Ratios—March Hospital Reporting of Quality Data for nonlabor-related share. The labor-
2008 Annual Hospital Payment Update related share is adjusted by the wage
Table 8C.—Proposed Statewide Average F. Effects of Proposed Policy Change to index applicable to the area where the
Total Cost-to-Charge Ratios for LTCHs— Methodology for Computing Core
March 2008 hospital is located. If the hospital is
Staffing Factors for Volume Decrease
Table 9A.—Hospital Reclassifications and Adjustment for SCHs and MDHs
located in Alaska or Hawaii, the
Redesignations—FY 2009 G. Effects of Proposed Clarification of nonlabor-related share is adjusted by a
Table 9B.—Hospitals Redesignated as Policy for Collection of Risk Adjustment cost-of-living adjustment factor. This
Rural under Section 1886(d)(8)(E) of the Data From MA Organizations base payment rate is multiplied by the
Act—FY 2009 H. Effects of Proposed Policy Changes DRG relative weight.
Table 10.—Geometric Mean Plus the Lesser If the hospital treats a high percentage
Relating to Hospital Emergency Services
of .75 of the National Adjusted Operating of low-income patients, it receives a
under EMTALA
Standardized Payment Amount
I. Effects of Implementation of Rural percentage add-on payment applied to
(Increased to Reflect the Difference
Between Costs and Charges) or .75 of Community Hospital Demonstration the DRG-adjusted base payment rate.
One Standard Deviation of Mean Charges Program This add-on payment, known as the
by Medicare Severity Diagnosis-Related J. Effects of Proposed Policy Changes disproportionate share hospital (DSH)
Groups (MS–DRGs)—March 2008 Relating to Payments to Hospitals- adjustment, provides for a percentage
Table 11.—Proposed FY 2009 MS–LTC– Within-Hospitals increase in Medicare payments to
DRGs, Proposed Relative Weights, K. Effects of Proposed Policy Changes hospitals that qualify under either of
Proposed Geometric Average Length of Relating to Requirements for Disclosure two statutory formulas designed to
Stay, and Proposed Short-Stay Outlier of Physician Ownership in Hospitals identify hospitals that serve a
Threshold L. Effects of Proposed Changes Relating to
disproportionate share of low-income
Appendix A—Regulatory Impact Analysis Physician Self-Referral Provisions
M. Effects of Proposed Changes Relating to
patients. For qualifying hospitals, the
I. Overall Impact Reporting of Financial Relationships amount of this adjustment may vary
II. Objectives Between Hospitals and Physicians based on the outcome of the statutory
III. Limitations on Our Analysis VIII. Effects of Proposed Changes in the calculations.
IV. Hospitals Included in and Excluded From If the hospital is an approved teaching
Capital IPPS
the IPPS hospital, it receives a percentage add-on
A. General Considerations
V. Effects on Excluded Hospitals and
B. Results payment for each case paid under the
Hospital Units
VI. Quantitative Effects of the Proposed IX. Alternatives Considered IPPS, known as the indirect medical
Policy Changes Under the IPPS for X. Overall Conclusion education (IME) adjustment. This
Operating Costs XI. Accounting Statement percentage varies, depending on the
A. Basis and Methodology of Estimates XII. Executive Order 12866 ratio of residents to beds.
B. Analysis of Table I Appendix B—Recommendation of Update Additional payments may be made for
C. Effects of the Proposed Changes to the Factors for Operating Cost Rates of Payment cases that involve new technologies or
MS–DRG Reclassifications and Relative for Inpatient Hospital Services medical services that have been
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23534 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
payment, it would be inadequately paid The existing regulations governing reporting period beginning on or after
under the regular DRG payment. payments to hospitals under the IPPS October 1, 2002. LTCHs that do not
The costs incurred by the hospital for are located in 42 CFR Part 412, Subparts meet the definition of ‘‘new’’ under
a case are evaluated to determine A through M. § 412.23(e)(4) are paid, during a 5-year
whether the hospital is eligible for an transition period, a LTCH prospective
additional payment as an outlier case. 2. Hospitals and Hospital Units
payment that is comprised of an
This additional payment is designed to Excluded From the IPPS
increasing proportion of the LTCH
protect the hospital from large financial Under section 1886(d)(1)(B) of the Federal rate and a decreasing proportion
losses due to unusually expensive cases. Act, as amended, certain specialty based on reasonable cost principles.
Any outlier payment due is added to the hospitals and hospital units are Those LTCHs that did not meet the
DRG-adjusted base payment rate, plus excluded from the IPPS. These hospitals definition of ‘‘new’’ under § 412.23(e)(4)
any DSH, IME, and new technology or and units are: Rehabilitation hospitals could elect to be paid based on 100
medical service add-on adjustments. and units; long-term care hospitals percent of the Federal prospective
Although payments to most hospitals (LTCHs); psychiatric hospitals and payment rate instead of a blended
under the IPPS are made on the basis of units; children’s hospitals; and cancer payment in any year during the 5-year
the standardized amounts, some hospitals. Religious nonmedical health transition. For cost reporting periods
categories of hospitals are paid in whole care institutions (RNHCIs) are also beginning on or after October 1, 2006,
or in part based on their hospital- excluded from the IPPS. Various all LTCHs are paid 100 percent of the
specific rate based on their costs in a sections of the Balanced Budget Act of Federal rate. The existing regulations
base year. For example, sole community 1997 (Pub. L. 105–33), the Medicare, governing payment under the LTCH PPS
hospitals (SCHs) receive the higher of a Medicaid and SCHIP [State Children’s are located in 42 CFR Part 412, Subpart
hospital-specific rate based on their Health Insurance Program] Balanced O.
costs in a base year (the higher of FY Budget Refinement Act of 1999 (Pub. L.
1982, FY 1987, or FY 1996) or the IPPS 106–113), and the Medicare, Medicaid, c. Inpatient Psychiatric Facilities (IPFs)
rate based on the standardized amount. and SCHIP Benefits Improvement and Under the authority of sections 124(a)
Until FY 2007, a Medicare-dependent, Protection Act of 2000 (Pub. L. 106–554) and (c) of Pub. L. 106–113, inpatient
small rural hospital (MDH) has received provide for the implementation of PPSs psychiatric facilities (IPFs) (formerly
the IPPS rate plus 50 percent of the for rehabilitation hospitals and units psychiatric hospitals and psychiatric
difference between the IPPS rate and its (referred to as inpatient rehabilitation units of acute care hospitals) are paid
hospital-specific rate if the hospital- facilities (IRFs)), LTCHs, and psychiatric under the IPF PPS. For cost reporting
specific rate based on their costs in a hospitals and units (referred to as periods beginning on or after January 1,
base year (the higher of FY 1982, FY inpatient psychiatric facilities (IPFs)), as 2008, all IPFs are paid 100 percent of
1987, or FY 2002) is higher than the discussed below. Children’s hospitals, the Federal per diem payment amount
IPPS rate. As discussed below, for cancer hospitals, and RNHCIs continue established under the IPF PPS. (For cost
discharges occurring on or after October to be paid solely under a reasonable reporting periods beginning on or after
1, 2007, but before October 1, 2011, an cost-based system. January 1, 2005, and ending on or before
MDH will receive the IPPS rate plus 75 The existing regulations governing December 31, 2007, some IPFs received
percent of the difference between the payments to excluded hospitals and transitioned payments for inpatient
IPPS rate and its hospital-specific rate, hospital units are located in 42 CFR hospital services based on a blend of
if the hospital-specific rate is higher Parts 412 and 413. reasonable cost-based payment and a
than the IPPS rate. SCHs are the sole Federal per diem payment rate.) The
source of care in their areas, and MDHs a. Inpatient Rehabilitation Facilities
existing regulations governing payment
are a major source of care for Medicare (IRFs)
under the IPF PPS are located in 42 CFR
beneficiaries in their areas. Both of these Under section 1886(j) of the Act, as part 412, Subpart N.
categories of hospitals are afforded this amended, rehabilitation hospitals and
special payment protection in order to units (IRFs) have been transitioned from 3. Critical Access Hospitals (CAHs)
maintain access to services for payment based on a blend of reasonable Under sections 1814, 1820, and
beneficiaries. cost reimbursement subject to a 1834(g) of the Act, payments are made
Section 1886(g) of the Act requires the hospital-specific annual limit under to critical access hospitals (CAHs) (that
Secretary to pay for the capital-related section 1886(b) of the Act and the is, rural hospitals or facilities that meet
costs of inpatient hospital services ‘‘in adjusted facility Federal prospective certain statutory requirements) for
accordance with a prospective payment payment rate for cost reporting periods inpatient and outpatient services are
system established by the Secretary.’’ beginning on or after January 1, 2002 based on 101 percent of reasonable cost.
The basic methodology for determining through September 30, 2002, to payment Reasonable cost is determined under the
capital prospective payments is set forth at 100 percent of the Federal rate provisions of section 1861(v)(1)(A) of
in our regulations at 42 CFR 412.308 effective for cost reporting periods the Act and existing regulations under
and 412.312. Under the capital IPPS, beginning on or after October 1, 2002. 42 CFR Parts 413 and 415.
payments are adjusted by the same DRG IRFs subject to the blend were also
for the case as they are under the 4. Payments for Graduate Medical
permitted to elect payment based on 100
operating IPPS. Capital IPPS payments Education (GME)
percent of the Federal rate. The existing
are also adjusted for IME and DSH, regulations governing payments under Under section 1886(a)(4) of the Act,
similar to the adjustments made under the IRF PPS are located in 42 CFR Part costs of approved educational activities
the operating IPPS. However, as 412, Subpart P. are excluded from the operating costs of
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23535
for a cost reporting period is based on the Addendum and in Appendix A to We are proposing the annual update
the hospital’s number of residents in this proposed rule. of the MS–LTC–DRG classifications and
that period and the hospital’s costs per relative weights for use under the LTCH
E. Major Contents of This Proposed Rule
resident in a base year. The existing PPS for FY 2009.
regulations governing payments to the In this proposed rule, we are setting
2. Proposed Changes to the Hospital
various types of hospitals are located in forth proposed changes to the Medicare
Wage Index
42 CFR Part 413. IPPS for operating costs and for capital-
related costs in FY 2009. We also are In section III. of the preamble to this
B. Provisions of the Deficit Reduction proposed rule, we are proposing
setting forth proposed changes relating
Act of 2005 (DRA) revisions to the wage index and the
to payments for IME costs and payments
Section 5001(b) of the Deficit to certain hospitals and units that annual update of the wage data. Specific
Reduction Act of 2005 (DRA), Pub. L. continue to be excluded from the IPPS issues addressed include the following:
109–171, requires the Secretary to and paid on a reasonable cost basis. In • Proposed wage index reform
develop a plan to implement, beginning addition, we are presenting proposed changes in response to
with FY 2009, a value-based purchasing changes relating to disclosure to recommendations made to Congress as a
plan for section 1886(d) hospitals patients of physician ownership and result of the wage index study required
defined in the Act. In section IV.C. of investment interests in hospitals, under Pub. L. 109–432. We discuss
the preamble of this proposed rule, we proposed changes to our physician self- changes related to reclassifications
discuss the report to Congress on the referral regulations, and a solicitation of criteria, application of budget neutrality
Medicare value-based purchasing plan public comments on a proposed in reclassifications, and the rural floor
and the current testing of the plan. collection of information regarding and imputed floor budget neutrality at
financial relationships between the State level.
C. Provisions of the Medicare • Changes to the CBSA designations.
Improvements and Extension Act Under hospitals and physicians.
• The methodology for computing the
Division B, Title I of the Tax Relief and The following is a summary of the proposed FY 2009 wage index.
Health Care Act of 2006 (MIEA–TRHCA) major changes that we are proposing to • The proposed FY 2009 wage index
Section 106(b)(2) of the MIEA– make: update, using wage data from cost
TRHCA instructs the Secretary of Health 1. Proposed Changes to MS–DRG reporting periods that began during FY
and Human Services to include in the Classifications and Recalibrations of 2006.
FY 2009 IPPS proposed rule one or Relative Weights • Analysis and implementation of the
more proposals to revise the wage index proposed FY 2009 occupational mix
In section II. of the preamble to this adjustment to the wage index.
adjustment applied under section
1886(d)(3)(E) of the Act for purposes of
proposed rule, we are including— • Proposed revisions to the wage
the IPPS. The Secretary was also • Proposed changes to MS–DRG index based on hospital redesignations
instructed to consider MedPAC’s reclassifications based on our yearly and reclassifications.
recommendations on the Medicare wage review. • The proposed adjustment to the
index classification system in • Proposed application of the wage index for FY 2009 based on
developing these proposals. In section documentation and coding adjustment commuting patterns of hospital
III. of the preamble of this proposed to hospital-specific rates resulting from employees who reside in a county and
implementation of the MS–DRG system. work in a different area with a higher
rule, we discuss MedPAC’s
recommendations in a report to • Proposed changes to address the wage index.
RTI reporting recommendations on • The timetable for reviewing and
Congress and present our proposed verifying the wage data used to compute
changes to the FY 2009 wage index in charge compression.
• Proposed recalibrations of the MS– the proposed FY 2009 wage index.
response to those recommendations. • The proposed labor-related share
DRG relative weights.
D. Provision of the TMA, Abstinence We also are proposing to refine the for the FY 2009 wage index, including
Education, and QI Programs Extension hospital cost reports so that charges for the labor-related share for Puerto Rico.
Act of 2007 relatively inexpensive medical supplies 3. Other Decisions and Proposed
Section 7 of the TMA [Transitional are reported separately from the costs Changes to the IPPS for Operating Costs
Medical Assistance], Abstinence and charges for more expensive medical and GME Costs
Education, and QI [Qualifying devices. This proposal would be applied In section IV. of the preamble to this
Individuals] Programs Extension Act of to the determination of both the IPPS proposed rule, we discuss a number of
2007 (Pub. L. 110–90) provides for a 0.9 and the OPPS relative weights as well the provisions of the regulations in 42
percent prospective documentation and as the calculation of the ambulatory CFR Parts 412, 413, and 489, including
coding adjustment in the determination surgical center payment rates. the following:
of standardized amounts under the IPPS We are presenting a listing and • Proposed changes to the postacute
(except for MDHs and SCHs) for discussion of additional hospital- care transfer policy as it relates to
discharges occurring during FY 2009. acquired conditions (HACs), including transfers to home with the provision of
The prospective documentation and infections, that are being proposed to be home health services.
coding adjustment was established in subject to the statutorily required • The reporting of hospital quality
FY 2008 in response to the quality adjustment in MS–DRG data as a condition for receiving the full
implementation of an MS–DRG system payments for FY 2009. annual payment update increase.
under the IPPS that resulted in changes We are presenting our evaluation and • Proposed changes in the collection
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in coding and classification that did not analysis of the FY 2009 applicants for of Medicare Advantage (MA) encounter
reflect real changes in case-mix under add-on payments for high-cost new data that are used for computing the risk
section 1886(d) of the Act. We discuss medical services and technologies payment adjustment made to MA
our proposed implementation of this (including public input, as directed by organizations.
provision in section II.D. of the Pub. L. 108–173, obtained in a town hall • Discussion of the report to Congress
preamble of this proposed rule and in meeting). on the Medicare value-based purchasing
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23536 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
plan and current testing and further 7. Proposed Changes and Solicitation of are proposing to use for the proposed
development of the plan. Comments on Physician Self-Referrals collection of information on financial
• Proposed changes to the Provisions relationships between hospitals and
methodology for determining core staff In section VIII. of the preamble of this physicians discussed in section IX, of
values for the volume decrease payment proposed rule, we present proposed the preamble of this proposed rule.
adjustment for SCHs and MDHs. changes to the policies on physician 13. Discussion of Medicare Payment
• The proposed updated national and self-referrals relating to the ‘‘Stand in Advisory Commission
regional case-mix values and discharges Shoes’’ provision, In addition, we solicit Recommendations
for purposes of determining RRC status. public comments regarding physician-
owned implant companies and Under section 1805(b) of the Act,
• The statutorily-required IME gainsharing arrangements. MedPAC is required to submit a report
adjustment factor for FY 2009 and to Congress, no later than March 1 of
technical changes to the GME payment 8. Proposed Collection of Information each year, in which MedPAC reviews
policies. Regarding Financial Relationships and makes recommendations on
Between Hospitals and Physicians Medicare payment policies. MedPAC’s
• Proposed changes to policies on
In section IX. of the preamble of this March 2008 recommendations
hospital emergency services under
proposed rule, we solicit public concerning hospital inpatient payment
EMTALA to address EMTALA
comments on our proposed collection of policies address the update factor for
Technical Advisory Group (TAG)
information regarding financial inpatient hospital operating costs and
recommendations.
relationships between hospitals and capital-related costs under the IPPS and
• Solicitation of public comments on physicians. for hospitals and distinct part hospital
Medicare policies relating to incentives units excluded from the IPPS. We
for avoidable readmissions to hospitals. 9. Determining Proposed Prospective address these recommendations in
Payment Operating and Capital Rates
• Discussion of the fifth year of Appendix B of this proposed rule. For
and Rate-of-Increase Limits further information relating specifically
implementation of the Rural
Community Hospital Demonstration In the Addendum to this proposed to the MedPAC March 2008 reports or
Program. rule, we set forth proposed changes to to obtain a copy of the reports, contact
the amounts and factors for determining MedPAC at (202) 220–3700 or visit
4. Proposed Changes to the IPPS for the FY 2009 prospective payment rates MedPAC’s Web site at:
Capital-Related Costs for operating costs and capital-related www.medpac.gov.
costs. We also establish the proposed
In section V. of the preamble to this F. Public Comments Received on Issues
threshold amounts for outlier cases. In
proposed rule, we discuss the payment in Related Rules
addition, we address the proposed
policy requirements for capital-related
update factors for determining the rate- 1. Comments on Phase-Out of the
costs and capital payments to hospitals.
of-increase limits for cost reporting Capital Teaching Adjustment Under the
We acknowledge the public comments IPPS Included in the FY 2008 IPPS
periods beginning in FY 2009 for
that we received on the phase-out of the Final Rule With Comment Period
hospitals and hospital units excluded
capital teaching adjustment included in
from the PPS. In the FY 2008 IPPS final rule with
the FY 2008 IPPS final rule with
comment period, and again are 10. Impact Analysis comment period, we solicited public
soliciting public comments on this In Appendix A of this proposed rule, comments on our policy changes related
phase-out in this proposed rule. we set forth an analysis of the impact to phase-out of the capital teaching
that the proposed changes would have adjustment to the capital payment
5. Proposed Changes to the Payment update under the IPPS (72 FR 47401).
Rates for Excluded Hospitals and on affected hospitals.
We received approximately 90 timely
Hospital Units: Rate-of-Increase 11. Recommendation of Update Factors pieces of correspondence in response to
Percentages for Operating Cost Rates of Payment for our solicitation. (These public
Inpatient Hospital Services comments may be viewed on the
In section VI. of the preamble to this
In Appendix B of this proposed rule, following Web site: http://
proposed rule, we discuss proposed www.cms.hhs.gov/eRulemaking/
changes to payments to excluded as required by sections 1886(e)(4) and
(e)(5) of the Act, we provided our ECCMSR/list.asp under file code CMS–
hospitals and hospital units, proposed 1533–FC.) In section V. of the preamble
changes for determining LTCH CCRs recommendations of the appropriate
percentage changes for FY 2009 for the of this proposed rule, we acknowledge
under the LTCH PPS, including a receipt of these public comments and
discussion regarding changing the following:
annual payment rate update schedule • A single average standardized again solicit public comments on the
amount for all areas for hospital phase-out in this proposed rule. We will
for the LTCH PPS, and proposed respond to the public comments
changes to the regulations on hospitals- inpatient services paid under the IPPS
for operating costs (and hospital-specific received in response to both the FY
within-hospitals. 2008 IPPS final rule with comment
rates applicable to SCHs and MDHs).
6. Proposed Changes Relating to • Target rate-of-increase limits to the period and this proposed rule in the FY
Disclosure of Physician Ownership in allowable operating costs of hospital 2009 IPPS final rule, which is scheduled
Hospitals inpatient services furnished by hospitals to be published in August 2008.
and hospital units excluded from the
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23537
regulations as they apply to Medicare Owned Specialty Hospitals’’ in March constructed on this basis because they
GME affiliated groups to provide for 2005. MedPAC recommended that the involve multiple organ systems (for
greater flexibility in training residents in Secretary refine the entire DRG system example, MDC 22 (Burns)). For FY 2008,
approved residency programs during by taking into account severity of illness cases are assigned to one of 745 MS–
times of disasters: on April 12, 2006 (71 and applying hospital-specific relative DRGs in 25 MDCs. The table below lists
FR 18654) and on November 27, 2007 value (HSRV) weights to DRGs.1 We the 25 MDCs.
(72 FR 66892). We received a number of began this reform process by adopting
timely pieces of correspondence in cost-based weights over a 3-year MAJOR DIAGNOSTIC CATEGORIES
response to these interim final rules transition period beginning in FY 2007 (MDCS)
with comment period. (The public and making interim changes to the DRG
comments that we received may be system for FY 2007 by creating 20 new 1 ............. Diseases and Disorders of the
viewed on the Web site at: http:// CMS DRGs and modifying 32 others Nervous System.
www.cms.hhs.gov/eRulemaking/ across 13 different clinical areas 2 ............. Diseases and Disorders of the
ECCMSR/list.asp under the file codes involving nearly 1.7 million cases. As Eye.
CMS–1531–IFC1 and CMS–1531–IFC2, described below in more detail, these 3 ............. Diseases and Disorders of the
respectively.) We will summarize and refinements were intermediate steps Ear, Nose, Mouth, and Throat.
4 ............. Diseases and Disorders of the
address these public comments in the towards comprehensive reform of both
Respiratory System.
FY 2009 IPPS final rule, which is the relative weights and the DRG system 5 ............. Diseases and Disorders of the
scheduled to be published in August that is occurring as we undertook Circulatory System.
2008. further study. For FY 2008, we adopted 6 ............. Diseases and Disorders of the Di-
745 new Medicare Severity DRGs (MS– gestive System.
II. Proposed Changes to Medicare
DRGs) to replace the CMS DRGs. We 7 ............. Diseases and Disorders of the
Severity DRG (MS–DRG) Classifications Hepatobiliary System and Pan-
refer readers to section II.D. of the FY
and Relative Weights creas.
2008 IPPS final rule with comment
A. Background period for a full detailed discussion of 8 ............. Diseases and Disorders of the
Musculoskeletal System and
Section 1886(d) of the Act specifies how the MS–DRG system was
Connective Tissue.
that the Secretary shall establish a established based on severity levels of 9 ............. Diseases and Disorders of the
classification system (referred to as illness (72 FR 47141). Skin, Subcutaneous Tissue and
DRGs) for inpatient discharges and Currently, cases are classified into Breast.
adjust payments under the IPPS based MS–DRGs for payment under the IPPS 10 ........... Endocrine, Nutritional and Meta-
on appropriate weighting factors based on the principal diagnosis, up to bolic Diseases and Disorders.
assigned to each DRG. Therefore, under eight additional diagnoses, and up to six 11 ........... Diseases and Disorders of the
procedures performed during the stay. Kidney and Urinary Tract.
the IPPS, we pay for inpatient hospital
In a small number of MS–DRGs, 12 ........... Diseases and Disorders of the
services on a rate per discharge basis Male Reproductive System.
that varies according to the DRG to classification is also based on the age,
13 ........... Diseases and Disorders of the
which a beneficiary’s stay is assigned. sex, and discharge status of the patient. Female Reproductive System.
The formula used to calculate payment The diagnosis and procedure 14 ........... Pregnancy, Childbirth, and the
for a specific case multiplies an information is reported by the hospital Puerperium.
individual hospital’s payment rate per using codes from the International 15 ........... Newborns and Other Neonates
case by the weight of the DRG to which Classification of Diseases, Ninth with Conditions Originating in
the case is assigned. Each DRG weight Revision, Clinical Modification (ICD–9– the Perinatal Period.
CM). 16 ........... Diseases and Disorders of the
represents the average resources Blood and Blood Forming Or-
required to care for cases in that The process of forming the MS–DRGs
was begun by dividing all possible gans and Immunological Dis-
particular DRG, relative to the average orders.
resources used to treat cases in all principal diagnoses into mutually
17 ........... Myeloproliferative Diseases and
DRGs. exclusive principal diagnosis areas, Disorders and Poorly Differen-
Congress recognized that it would be referred to as Major Diagnostic tiated Neoplasms.
necessary to recalculate the DRG Categories (MDCs). The MDCs were 18 ........... Infectious and Parasitic Diseases
relative weights periodically to account formed by physician panels to ensure (Systemic or Unspecified
for changes in resource consumption. that the DRGs would be clinically Sites).
coherent. The diagnoses in each MDC 19 ........... Mental Diseases and Disorders.
Accordingly, section 1886(d)(4)(C) of
correspond to a single organ system or 20 ........... Alcohol/Drug Use and Alcohol/
the Act requires that the Secretary Drug Induced Organic Mental
adjust the DRG classifications and etiology and, in general, are associated
Disorders.
relative weights at least annually. These with a particular medical specialty. 21 ........... Injuries, Poisonings, and Toxic
adjustments are made to reflect changes Thus, in order to maintain the Effects of Drugs.
in treatment patterns, technology, and requirement of clinical coherence, no 22 ........... Burns.
any other factors that may change the final MS–DRG could contain patients in 23 ........... Factors Influencing Health Status
relative use of hospital resources. different MDCs. Most MDCs are based and Other Contacts with Health
on a particular organ system of the Services.
B. MS–DRG Reclassifications body. For example, MDC 6 is Diseases 24 ........... Multiple Significant Trauma.
and Disorders of the Digestive System. 25 ........... Human Immunodeficiency Virus
1. General Infections.
This approach is used because clinical
As discussed in the preamble to the
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23538 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
which cases are directly assigned on the assignment for certain principal increase the payment amount to
basis of ICD–9–CM procedure codes. diagnoses. An example is extracorporeal hospitals above the base MS–DRG
These MS–DRGs are for heart transplant shock wave lithotripsy for patients with payment.
or implant of heart assist systems, liver a principal diagnosis of urinary stones. The records for all Medicare hospital
and/or intestinal transplants, bone Lithotripsy procedures are not routinely inpatient discharges are maintained in
marrow transplants, lung transplants, performed in an operating room. the Medicare Provider Analysis and
simultaneous pancreas/kidney Therefore, lithotripsy codes are not Review (MedPAR) file. The data in this
transplants, pancreas transplants, and classified as O.R. procedures. However, file are used to evaluate possible MS–
for tracheostomies. Cases are assigned to our clinical advisors believe that DRG classification changes and to
these MS–DRGs before they are patients with urinary stones who recalibrate the MS–DRG weights.
classified to an MDC. The table below undergo extracorporeal shock wave However, in the FY 2000 IPPS final rule
lists the nine current pre-MDCs. lithotripsy should be considered similar (64 FR 41500), we discussed a process
to other patients who undergo O.R. for considering non-MedPAR data in the
PRE-MAJOR DIAGNOSTIC CATEGORIES procedures. Therefore, we treat this recalibration process. In order for us to
(PRE-MDCS) group of patients similar to patients consider using particular non-MedPAR
undergoing O.R. procedures. data, we must have sufficient time to
MS–DRG 103 Heart Transplant or Implant Once the medical and surgical classes evaluate and test the data. The time
of Heart Assist System. for an MDC were formed, each diagnosis necessary to do so depends upon the
MS–DRG 480 Liver Transplant and/or In- class was evaluated to determine if nature and quality of the non-MedPAR
testinal Transplant. complications or comorbidities would data submitted. Generally, however, a
MS–DRG 481 Bone Marrow Transplant. consistently affect the consumption of significant sample of the non-MedPAR
MS–DRG 482 Tracheostomy for Face, hospital resources. Each diagnosis was data should be submitted by mid-
Mouth, and Neck Diag-
categorized into one of three severity October for consideration in
noses.
MS–DRG 495 Lung Transplant. levels. These three levels include a conjunction with the next year’s
MS–DRG 512 Simultaneous Pancreas/Kid- major complication or comorbidity proposed rule. This date allows us time
ney Transplant. (MCC), a complication or comorbidity to test the data and make a preliminary
MS–DRG 513 Pancreas Transplant. (CC), or a non-CC. Physician panels assessment as to the feasibility of using
MS–DRG 541 ECMO or Tracheostomy with classified each diagnosis code based on the data. Subsequently, a complete
Mechanical Ventilation a highly iterative process involving a database should be submitted by early
96+ Hours or Principal Di- combination of statistical results from December for consideration in
agnosis Except for Face, test data as well as clinical judgment. As conjunction with the next year’s
Mouth, and Neck Diag-
stated earlier, we refer readers to section proposed rule.
nosis with Major O.R.
MS–DRG 542 Tracheostomy with Mechan- II.D. of the FY 2008 IPPS final rule with As we indicated above, for FY 2008,
ical Ventilation 96+ Hours comment period for a full detailed we made significant improvement in the
or Principal Diagnosis Ex- discussion of how the MS–DRG system DRG system to recognize severity of
cept for Face, Mouth, and was established based on severity levels illness and resource usage by adopting
Neck Diagnosis without of illness (72 FR 47141). MS–DRGs. The changes we adopted
Major O.R. A patient’s diagnosis, procedure, were reflected in the FY 2008
discharge status, and demographic GROUPER, Version 25.0, and were
Once the MDCs were defined, each information is entered into the Medicare effective for discharges occurring on or
MDC was evaluated to identify those claims processing systems and subjected after October 1, 2007. Our DRG analysis
additional patient characteristics that to a series of automated screens called for the FY 2008 final rule with comment
would have a consistent effect on the the Medicare Code Editor (MCE). The period was based on data from the
consumption of hospital resources. MCE screens are designed to identify March 2007 update of the FY 2006
Because the presence of a surgical cases that require further review before MedPAR file, which contained hospital
procedure that required the use of the classification into an MS–DRG. bills received through March 31, 2007,
operating room would have a significant After patient information is screened for discharges occurring through
effect on the type of hospital resources through the MCE and any further September 30, 2006. For this proposed
used by a patient, most MDCs were development of the claim is conducted, rule, for FY 2009, our DRG analysis is
initially divided into surgical DRGs and the cases are classified into the based on data from the September 2007
medical DRGs. Surgical DRGs are based appropriate MS–DRG by the Medicare update of the FY 2007 MedPAR file,
on a hierarchy that orders operating GROUPER software program. The which contains hospital bills received
room (O.R.) procedures or groups of GROUPER program was developed as a through September 30, 2007, for
O.R. procedures by resource intensity. means of classifying each case into an discharges through September 30, 2007.
Medical DRGs generally are MS–DRG on the basis of the diagnosis
differentiated on the basis of diagnosis and procedure codes and, for a limited 2. Yearly Review for Making MS–DRG
and age (0 to 17 years of age or greater number of MS–DRGs, demographic Changes
than 17 years of age). Some surgical and information (that is, sex, age, and Many of the changes to the MS–DRG
medical DRGs are further differentiated discharge status). classifications we make annually are the
based on the presence or absence of a After cases are screened through the result of specific issues brought to our
complication or comorbidity (CC) or a MCE and assigned to an MS–DRG by the attention by interested parties. We
major complication or comorbidity GROUPER, the PRICER software encourage individuals with concerns
(MCC). calculates a base MS–DRG payment. about MS–DRG classifications to bring
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Generally, nonsurgical procedures The PRICER calculates the payment for those concerns to our attention in a
and minor surgical procedures that are each case covered by the IPPS based on timely manner so they can be carefully
not usually performed in an operating the MS–DRG relative weight and considered for possible inclusion in the
room are not treated as O.R. procedures. additional factors associated with each annual proposed rule and, if included,
However, there are a few non-O.R. hospital, such as IME and DSH payment may be subjected to public review and
procedures that do affect MS–DRG adjustments. These additional factors comment. Therefore, similar to the
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23539
timetable for interested parties to submit planned to further consider all of 2007 IPPS proposed rule for
non-MedPAR data for consideration in MedPAC’s recommendations and determining the DRG relative weights.
the MS–DRG recalibration process, thoroughly analyze options and their Although we proposed to adopt the
concerns about MS–DRG classification impacts on the various types of HSRV weighting methodology for FY
issues should be brought to our hospitals in the FY 2007 IPPS proposed 2007, we decided not to adopt the
attention no later than early December rule. proposed methodology in the final rule
in order to be considered and possibly For FY 2007, we began this process. after considering the public comments
included in the next annual proposed In the FY 2007 IPPS proposed rule, we we received on the proposal. Instead, in
rule updating the IPPS. proposed to adopt Consolidated the FY 2007 IPPS final rule, we adopted
The actual process of forming the Severity DRGs (CS DRGs) for FY 2008 (if a cost-based weighting methodology
MS–DRGs was, and will likely continue not earlier). However, based on public without the HSRV portion of the
to be, highly iterative, involving a comments received on the FY 2007 IPPS proposed methodology. The cost-based
combination of statistical results from proposed rule, we decided not to adopt weights are being adopted over a 3-year
test data combined with clinical the CS DRGs. Rather, we decided to transition period in 1⁄3 increments
judgment. In the FY 2008 IPPS final rule make interim changes to the existing between FY 2007 and FY 2009. In
(72 FR 47140 through 47189), we DRGs for FY 2007 by creating 20 new addition, in the FY 2007 IPPS final rule,
described in detail the process we used DRGs involving 13 different clinical we indicated our intent to further study
to develop the MS–DRGs that we areas that would significantly improve the HSRV-based methodology as well as
adopted for FY 2008. In addition, in the CMS DRG system’s recognition of other issues brought to our attention
deciding whether to make further severity of illness. We also modified 32 related to the cost-based weighting
modification to the MS–DRGs for DRGs to better capture differences in methodology adopted in the FY 2007
particular circumstances brought to our severity. The new and revised DRGs final rule. There was significant concern
attention, we considered whether the were selected from 40 existing CMS in the public comments that our cost-
resource consumption and clinical DRGs that contained 1,666,476 cases based weighting methodology does not
characteristics of the patients with a and represent a number of body adequately account for charge
given set of conditions are significantly systems. In creating these 20 new DRGs, compression—the practice of applying a
different than the remaining patients in we deleted 8 and modified 32 existing higher percentage charge markup over
the MS–DRG. We evaluated patient care DRGs. We indicated that these interim costs to lower cost items and services
costs using average charges and lengths steps for FY 2007 were being taken as and a lower percentage charge markup
of stay as proxies for costs and relied on a prelude to more comprehensive over costs to higher cost items and
the judgment of our medical advisors to changes to better account for severity in services. Further, public commenters
decide whether patients are clinically the DRG system by FY 2008. expressed concern about potential
distinct or similar to other patients in In the FY 2007 IPPS final rule, we
inconsistencies between how costs and
the MS–DRG. In evaluating resource indicated our intent to pursue further
charges are reported on the Medicare
costs, we considered both the absolute DRG reform through two initiatives.
cost reports and charges on the
and percentage differences in average First, we announced that we were in the
Medicare claims. In the FY 2007 IPPS
charges between the cases we selected process of engaging a contractor to assist
final rule, we used costs and charges
for review and the remainder of cases in us with evaluating alternative DRG
from the cost report to determine
the MS–DRG. We also considered systems that were raised as potential
departmental level cost-to-charge ratios
variation in charges within these alternatives to the CMS DRGs in the
(CCRs) which we then applied to
groups; that is, whether observed public comments. Second, we indicated
charges on the Medicare claims to
average differences were consistent our intent to review over 13,000 ICD–9–
CM diagnosis codes as part of making determine the cost-based weights. The
across patients or attributable to cases
further refinements to the current CMS commenters were concerned about
that were extreme in terms of charges or
DRGs to better recognize severity of potential distortions to the cost-based
length of stay, or both. Further, we
illness based on the work that CMS weights that would result from
considered the number of patients who
(then HCFA) did in the mid-1990’s in inconsistent reporting between the cost
will have a given set of characteristics
connection with adopting severity reports and the Medicare claims. After
and generally preferred not to create a
DRGs. We describe below the progress publication of the FY 2007 IPPS final
new MS–DRG unless it would include
a substantial number of cases. we have made on these two initiatives, rule, we entered into a contract with RTI
our actions for FY 2008, and our International (RTI) to study both charge
C. Adoption of the MS–DRGs in FY 2008 proposals for FY 2009 based on our compression and to what extent our
In the FY 2006, FY 2007, and FY 2008 continued analysis of reform of the DRG methodology for calculating DRG
IPPS final rules, we discussed a number system. We note that the adoption of the relative weights is affected by
of recommendations made by MedPAC MS–DRGs to better recognize severity of inconsistencies between how hospitals
regarding revisions to the DRG system illness has implications for the outlier report costs and charges on the cost
used under the IPPS (70 FR 47473 threshold, the application of the reports and how hospitals report
through 47482; 71 FR 47881 through postacute care transfer policy, the charges on individual claims. Further,
47939; and 72 FR 47140 through 47189). measurement of real case-mix versus as part of its study of alternative DRG
As we noted in the FY 2006 IPPS final apparent case-mix, and the IME and systems, the RAND Corporation
rule, we had insufficient time to DSH payment adjustments. We discuss analyzed the HSRV cost-weighting
complete a thorough evaluation of these these implications for FY 2009 in other methodology. We refer readers to
recommendations for full sections of this preamble and in the section II.E. of the preamble of this
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implementation in FY 2006. However, Addendum to this proposed rule. proposed rule for our proposals for
we did adopt severity-weighted cardiac In the FY 2007 IPPS proposed rule, addressing the issue of charge
DRGs in FY 2006 to address public we discussed MedPAC’s compression and the HSRV cost-
comments on this issue and the specific recommendations to move to a cost- weighting methodology for FY 2009.
concerns of MedPAC regarding cardiac based HSRV weighting methodology We believe that revisions to the DRG
surgery DRGs. We also indicated that we using HSRVs beginning with the FY system to better recognize severity of
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23540 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
illness and changes to the relative On September 29, 2007, the TMA, applying for adoption of the MS–DRGs
weights based on costs rather than Abstinence Education, and QI Programs to all other hospitals. In establishing
charges are improving the accuracy of Extension Act of 2007, Pub. L. 110–90, this policy, we cited our authority under
the payment rates in the IPPS. We agree was enacted. Section 7 of Pub. L. 110– section 1886(d)(3)(A)(vi) of the Act,
with MedPAC that these refinements 90 included a provision that reduces the which provides the authority to adjust
should be pursued. Although we documentation and coding adjustment ‘‘the standardized amount’’ to eliminate
continue to caution that any prospective for the MS–DRG system that we adopted the effect of changes in coding or
payment system based on grouping in the FY 2008 IPPS final rule with classification that do not reflect real
cases will always present some comment period to ¥0.6 percent for FY change in case-mix. However, in a final
opportunities for providers to specialize 2008 and ¥0.9 percent for FY 2009. To rule that appeared in the Federal
in cases they believe have higher comply with the provision of section 7 Register on November 27, 2007 (72 FR
margins, we believe that the changes we of Pub. L. 110–90, in a final rule that 66886), we rescinded the application of
have adopted and the continuing appeared in the Federal Register on the documentation and coding
reforms we are proposing in this November 27, 2007 (72 FR 66886), we adjustment to the hospital-specific rates
proposed rule for FY 2009 will improve changed the IPPS documentation and retroactive to October 1, 2007. In that
payment accuracy and reduce financial coding adjustment for FY 2008 to ¥0.6 final rule, we indicated that, while we
incentives to create specialty hospitals. percent, and revised the FY 2008 still believe it would be appropriate to
payment rates, factors, and thresholds apply the documentation and coding
We refer readers to section II.D. of the
accordingly, with these revisions adjustment to the hospital-specific rates,
FY 2008 IPPS final rule with comment
effective October 1, 2007. upon further review we decided that
period for a full discussion of how the For FY 2009, Pub. L. 110–90 requires
MS–DRG system was established based application of the documentation and
a documentation and coding adjustment coding adjustment to the hospital-
on severity levels of illness (72 FR of ¥0.9 percent instead of the ¥1.8
47141). specific rates is not consistent with the
percent adjustment specified in the FY plain meaning of section
D. MS–DRG Documentation and Coding 2008 IPPS final rule with comment 1886(d)(3)(A)(vi) of the Act, which only
Adjustment, Including the Applicability period. As required by statute, we are mentions adjusting ‘‘the standardized
to the Hospital-Specific Rates and the applying a documentation and coding amount’’ and does not mention
Puerto Rico-Specific Standardized adjustment of ¥0.9 percent to the FY adjusting the hospital-specific rates.
Amount 2009 IPPS national standardized
amounts. The documentation and We continue to have concerns about
1. MS–DRG Documentation and Coding coding adjustments established in the this issue. Because hospitals paid based
Adjustment FY 2008 IPPS final rule with comment on the hospital-specific rate use the
period are cumulative. As a result, the same MS–DRG system as other
As stated above, we adopted the new ¥0.9 percent documentation and hospitals, we believe they have the
MS–DRG patient classification system coding adjustment in FY 2009 is in potential to realize increased payments
for the IPPS, effective October 1, 2007, addition to the ¥0.6 percent adjustment from coding improvements that do not
to better recognize severity of illness in in FY 2008, yielding a combined effect reflect real increases in patients’
Medicare payment rates. Adoption of of ¥1.5 percent. severity of illness. In section
the MS–DRGs resulted in the expansion 1886(d)(3)(A)(vi) of the Act, Congress
of the number of DRGs from 538 in FY 2. Application of the Documentation stipulated that hospitals paid based on
2007 to 745 in FY 2008. By increasing and Coding Adjustment to the Hospital- the standardized amount should not
the number of DRGs and more fully Specific Rates receive additional payments based on
taking into account severity of illness in Under section 1886(d)(5)(D)(i) of the the effect of documentation and coding
Medicare payment rates, the MS–DRGs Act, SCHs are paid based on whichever changes that do not reflect real changes
encourage hospitals to improve their of the following rates yields the greatest in case-mix. Similarly, we believe that
documentation and coding of patient aggregate payment: The Federal national hospitals paid based on the hospital-
diagnoses. In the FY 2008 IPPS final rate; the updated hospital-specific rate specific rate should not have the
rule with comment period (72 FR 47175 based on FY 1982 costs per discharge; potential to realize increased payments
through 47186), which appeared in the the updated hospital-specific rate based due to documentation and coding
Federal Register on August 22, 2007, we on FY 1987 costs per discharge; or the improvements that do not reflect real
indicated that we believe the adoption updated hospital-specific rate based on increases in patients’ severity of illness.
of the MS–DRGs had the potential to FY 1996 costs per discharge. Under While we continue to believe that
lead to increases in aggregate payments section 1886(d)(5)(G) of the Act, MDHs section 1886(d)(3)(A)(vi) of the Act does
without a corresponding increase in are paid based on the Federal national not provide explicit authority for
actual patient severity of illness due to rate or, if higher, the Federal national application of the documentation and
the incentives for improved rate plus 75 percent of the difference coding adjustment to the hospital-
documentation and coding. In that final between the Federal national rate and specific rates, we believe that we have
rule with comment period, using the the updated hospital-specific rate based the authority to apply the
Secretary’s authority under section on the greater of either the FY 1982, documentation and coding adjustment
1886(d)(3)(A)(vi) of the Act to maintain 1987, or 2002 costs per discharge. In the to the hospital-specific rates using our
budget neutrality by adjusting the FY 2008 IPPS final rule with comment special exceptions and adjustment
standardized amount to eliminate the period, we established a policy of authority under section 1886(d)(5)(I)(i)
effect of changes in coding or applying the documentation and coding of the Act. The special exceptions and
jlentini on PROD1PC65 with PROPOSALS2
classification that do not reflect real adjustment to the hospital-specific rates. adjustment authority authorizes us to
change in case-mix, we established In that rule, we indicated that because provide ‘‘for such other exceptions and
prospective documentation and coding SCHs and MDHs use the same DRG adjustments to [IPPS] payment amounts
adjustments of ¥1.2 percent for FY system as all other hospitals, we believe * * * as the Secretary deems
2008, ¥1.8 percent for FY 2009, and they should be equally subject to the appropriate.’’ In light of this authority,
¥1.8 percent for FY 2010. budget neutrality adjustment that we are for the FY 2010 rulemaking, we plan to
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23541
examine our FY 2008 claims data for standardized amount for FY 2008 and coding adjustments implemented in
hospitals paid based on the hospital- retroactive to October 1, 2007. those years, the law requires the
specific rate. If we find evidence of While section 1886(d)(3)(A)(vi) of the Secretary to adjust payments for
significant increases in case-mix for Act is not applicable to the Puerto Rico- discharges occurring in FYs 2010
patients treated in these hospitals, we specific standardized amount, we through 2012 to offset the estimated
would consider proposing application believe that we have the authority to amount of increase or decrease in
of the documentation and coding apply the documentation and coding aggregate payments that occurred in FY
adjustments to the FY 2010 hospital- adjustment to the Puerto Rico-specific 2008 and FY 2009 as a result of that
specific rates under our authority in standardized amount using our special difference, in addition to making an
section 1886(d)(5)(I)(i) of the Act. As exceptions and adjustment authority appropriate adjustment to the
noted previously, the documentation under section 1886(d)(5)(I)(i) of the Act. standardized amount under section
and coding adjustments established in Similar to SCHs and MDHs that are paid 1886(d)(3)(A)(vi) of the Act.
the FY 2008 IPPS final rule with based on the hospital-specific rate, In order to implement these
comment period are cumulative. For discussed in section II.D.2. of this requirements of section 7 of Pub. L.
example, the ¥0.9 percent preamble, we believe that Puerto Rico 110–90, we are planning a thorough
documentation and coding adjustment hospitals that are paid based on the retrospective evaluation of our claims
to the national standardized amount in Puerto Rico-specific standardized data. Results of this evaluation would be
FY 2009 is in addition to the ¥0.6 amount should not have the potential to used by our actuaries to determine any
percent adjustment made in FY 2008, realize increased payments due to necessary payment adjustments in FYs
yielding a combined effect of ¥1.5 documentation and coding 2010 through 2012 to ensure the budget
percent in FY 2009. Given the improvements that do not reflect real neutrality of the MS–DRG
cumulative nature of the documentation increases in patients’ severity of illness. implementation for FY 2008 and FY
and coding adjustments, if we were to Consistent with the approach described 2009, as required by law. We are
propose to apply the documentation and for SCHs and MDHs in section II.D.2. of currently developing our analysis plans
coding adjustment to the FY 2010 the preamble of this proposed rule, for for this effort.
hospital-specific rates, it may involve the FY 2010 rulemaking, we plan to We intend to measure and corroborate
applying the FY 2008 and FY 2009 examine our FY 2008 claims data for the extent of the overall national average
documentation and coding adjustments hospitals in Puerto Rico. If we find changes in case-mix for FY 2008 and FY
(¥1.5 percent combined) plus the FY evidence of significant increases in case- 2009. We expect part of this overall
2010 documentation and coding mix for patients treated in these national average change would be
adjustment, discussed in the FY 2008 hospitals, we would consider proposing attributable to underlying changes in
IPPS final rule with comment period, to application of the documentation and actual patient severity and part would
the FY 2010 hospital-specific rates. coding adjustments to the FY 2010 be attributable to documentation and
Puerto Rico-specific standardized coding improvements under the MS–
3. Application of the Documentation amount under our authority in section DRG system. In order to separate the
and Coding Adjustment to the Puerto 1886(d)(5)(I)(i) of the Act. As noted two effects, we plan to isolate the effect
Rico-Specific Standardized Amount previously, the documentation and of shifts in cases among base DRGs from
Puerto Rico hospitals are paid based coding adjustments established in the the effect of shifts in the types of cases
on 75 percent of the national FY 2008 IPPS final rule with comment within base DRGs. The shifts among
standardized amount and 25 percent of period are cumulative. Given the base DRGs are the result of changes in
the Puerto Rico-specific standardized cumulative nature of the documentation principal diagnoses while the shifts
amount. As noted previously, the and coding adjustments, if we were to within base DRGs are the result of
documentation and coding adjustment propose to apply the documentation and changes in secondary diagnoses.
we adopted in the FY 2008 IPPS final coding adjustment to the FY 2010 Because we expect most of the
rule with comment period relied upon Puerto Rico-specific standardized documentation and coding
our authority under section amount, it may involve applying the FY improvements under the MS–DRG
1886(d)(3)(A)(vi) of the Act, which 2008 and FY 2009 documentation and system will occur in the secondary
provides the authority to adjust ‘‘the coding adjustments (¥1.5 percent diagnoses, the shifts among base DRGs
standardized amounts computed under combined) plus the FY 2010 are less likely to be the result of the MS–
this paragraph’’ to eliminate the effect of documentation and coding adjustment, DRG system and the shifts within base
changes in coding or classification that discussed in the FY 2008 IPPS final rule DRGs are more likely to be the result of
do not reflect real change in case-mix. with comment period, to the FY 2010 the MS–DRG system. We also anticipate
Section 1886(d)(3)(A)(vi) of the Act Puerto Rico-specific standardized evaluating data to identify the specific
applies to the national standardized amount. MS–DRGs and diagnoses that
amounts computed under section contributed significantly to the
1886(d)(3) of the Act, but does not apply 4. Potential Additional Payment improved documentation and coding
to the Puerto Rico-specific standardized Adjustments in FYs 2010 Through 2012 payment effect and to quantify their
amount computed under section Section 7 of Pub. L.110–90 also impact. This step would entail analysis
1886(d)(9)(C) of the Act. In calculating provides for payment adjustments in of the secondary diagnoses driving the
the FY 2008 payment rates, we made an FYs 2010 through 2012 based upon a shifts in severity within specific base
inadvertent error and applied the FY retrospective evaluation of claims data DRGs.
2008 ¥0.6 percent documentation and from the implementation of the MS– While we believe that the data
coding adjustment to the Puerto Rico- DRG system. If, based on this analysis plan described previously will
jlentini on PROD1PC65 with PROPOSALS2
specific standardized amount, relying retrospective evaluation, the Secretary produce an appropriate estimate of the
on our authority under section finds that in FY 2008 and FY 2009, the extent of case-mix changes resulting
1886(d)(3)(A)(vi) of the Act. We are actual amount of change in case-mix from documentation and coding
currently in the process of developing a that does not reflect real change in improvements, we may also decide, if
Federal Register notice to correct that underlying patient severity differs from feasible, to use historical data from our
error in the Puerto Rico-specific the statutorily mandated documentation Hospital Payment Monitoring Program
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23542 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
(HPMP) to corroborate the within base blending the relative weights with one- Operating Room or Radiology. RTI also
DRG shift analysis. The HPMP is third charge-based weights and two- found evidence that certain revenue
supported by the Medicare Clinical Data thirds cost-based weights. codes within the same cost center had
Abstraction Center (CDAC). From 1999 Also, in FY 2008, we adopted significantly different markup rates. For
to 2007, the CDAC obtained medical severity-based MS–DRGs, which example, within the Medicare Supplies
records for a sample of discharges as increased the number of DRGs from 538 Charged to Patients cost center, revenue
part of our hospital monitoring to 745. Many commenters raised codes for devices, implantables, and
activities. These data were collected on concerns as to how the transition from prosthetics had different markup rates
a random sample of between 30,000 to charge-based weights to cost-based than the other medical supplies in that
50,000 hospital discharges per year. The weights would continue with the cost center. RTI’s findings demonstrated
historical CDAC data could be used to introduction of new MS–DRGs. We that charge compression exists in
develop an upper bound estimate of the decided to implement a 2-year several CCRs, most notably in the
trend in real case-mix growth (that is, transition for the MS–DRGs to coincide Medical Supplies and Equipment CCR.
real change in underlying patient with the remainder of the transition to RTI offered short-term, medium-term,
severity) prior to implementation of the cost-based relative weights. In FY 2008, and long-term recommendations to
MS–DRGs. 50 percent of the relative weight for mitigate the effects of charge
We welcome public comments on our each DRG was based on the CMS DRG compression. RTI’s short-term
analysis plans, as well as suggestions on relative weight and 50 percent was recommendations included expanding
other possible approaches for based on the MS–DRG relative weight. the distinct hospital CCRs to 19 by
conducting a retrospective analysis to We refer readers to the FY 2007 IPPS disaggregating the ‘‘Emergency Room’’
identify the amount of case-mix changes final rule (71 FR 47882) for more detail and ‘‘Blood and Blood Products’’ from
that occurred in FY 2008 and FY 2009 on our final policy for calculating the the Other Services cost center and by
that did not reflect real increases in cost-based DRG relative weights and to estimating regression-based CCRs to
patients’ severity of illness. Our the FY 2008 IPPS final rule with disaggregate Medical Supplies, Drugs,
analysis, findings, and any resulting comment period (72 FR 47199) for and Radiology cost centers. RTI
proposals to adjust payments for information on how we blended relative recommended, for the medium-term, to
discharges occurring in FYs 2010 weights based on the CMS DRGs and expand the MedPAR file to include
through 2012 to offset the estimated MS–DRGs. separate fields that disaggregate several
amount of increase or decrease in As we transitioned to cost-based existing charge departments. In
aggregate payments that occurred in FY relative weights, some commenters addition, RTI recommended improving
2008 and FY 2009 will be discussed in raised concerns about potential bias in hospital cost reporting instructions so
future years’ rulemakings. the weights due to ‘‘charge that hospitals can properly report costs
compression,’’ which is the practice of in the appropriate cost centers. RTI’s
E. Refinement of the MS–DRG Relative applying a higher percentage charge long-term recommendations included
Weight Calculation markup over costs to lower cost items adding new cost centers to the Medicare
1. Background and services, and a lower percentage cost report, such as adding a ‘‘Devices,
charge markup over costs to higher cost Implants and Prosthetics’’ line under
In the FY 2008 IPPS final rule with items and services. As a result, the cost- ‘‘Medical Supplies Charged to Patients’’
comment period (72 FR 47188), we based weights would undervalue high and a ‘‘CT Scanning and MRI’’
continued to implement significant cost items and overvalue low cost items subscripted line under ‘‘Radiology-
revisions to Medicare’s inpatient if a single CCR is applied to items of Diagnostics’’.
hospital rates by basing relative weights widely varying costs in the same cost Among RTI’s short-term
on hospitals’ estimated costs rather than center. To address this concern, in recommendations, for FY 2008, we
on charges. We continued our 3-year August 2006, we awarded a contract to expanded the number of distinct
transition from charge-based relative RTI to study the effects of charge hospital department CCRs from 13 to 15
weights to cost-based relative weights. compression in calculating the relative by disaggregating ‘‘Emergency Room’’
Beginning in FY 2007, we implemented weights and to consider methods to and ‘‘Blood and Blood Products’’ from
relative weights based on cost report reduce the variation in the CCRs across the Other Services cost center as these
data instead of based on charge services within cost centers. RTI issued lines already exist on the hospital cost
information. We had initially proposed an interim draft report in March 2007 report. Furthermore, in an effort to
to develop cost-based relative weights which was posted on the CMS Web site improve consistency between costs and
using the hospital-specific relative value with its findings on charge compression. their corresponding charges in the
cost center (HSRVcc) methodology as In that report, RTI found that a number MedPAR file, we moved the costs for
recommended by MedPAC. However, of factors contribute to charge cases involving electroencephalography
after considering concerns raised in the compression and affect the accuracy of (EEG) from the Cardiology cost center to
public comments, we modified the relative weights. RTI found the Laboratory cost center group which
MedPAC’s methodology to exclude the inconsistent matching of charges in the corresponds with the EEG MedPAR
hospital-specific relative weight feature. Medicare cost report and their claims categorized under the Laboratory
Instead, we developed national CCRs corresponding charges in the MedPAR charges. We also agreed with RTI’s
based on distinct hospital departments claims for certain cost centers. In recommendations to revise the Medicare
and engaged a contractor to evaluate the addition, there was inconsistent cost report and the MedPAR file as a
HSRVcc methodology for future reporting of costs and charges among long-term solution for charge
consideration. To mitigate payment hospitals. For example, some hospitals compression. We stated that, in the
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instability due to the adoption of cost- would report costs and charges for upcoming year, we would consider
based relative weights, we decided to devices and medical supplies in the additional lines to the cost report and
transition cost-based weights over 3 Medical Supplies Charged to Patients additional revenue codes for the
years by blending them with charge- cost center, while other hospitals would MedPAR file.
based weights beginning in FY 2007. In report those costs and charges in their We did not adopt RTI’s short-term
FY 2008, we continued our transition by related ancillary departments such as recommendation to create four
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23543
additional regression-based CCRs for methodology at this time or in the Furthermore, longstanding Medicare
several reasons, even though we had future. The RAND report on regression- cost reporting policy has been that
received comments in support of the based CCRs and the HSRV methodology hospitals must include the cost and
regression-based CCRs as a means to was finalized at the conclusion of our charges of separately ‘‘chargeable
immediately resolve the problem of proposed rule development process and medical supplies’’ in the Medical
charge compression, particularly within is expected to be posted on the CMS Supplies Charged to Patients cost center
the Medical Supplies and Equipment Web site in the near future. Although (line 55 of Worksheet A), rather than in
CCR. We were concerned that RTI’s we are unable to include a discussion of the Operating Room, Emergency Room,
analysis was limited to charges on the results of the RAND study in this or other ancillary cost centers. Routine
hospital inpatient claims while typically proposed rule, we welcome public services, which can include ‘‘minor
hospital cost report CCRs combine both comment on the report. medical and surgical supplies’’ (Section
inpatient and outpatient services. Finally, we received public comments 2202.6 of the PRM, Part 1), and items for
Further, because both the IPPS and on the FY 2008 IPPS proposed rule which a separate charge is not
OPPS rely on cost-based weights, we raising concerns on the accuracy of customarily made, may be directly
preferred to introduce any using regression-based CCR estimates to assigned through the hospital’s
methodological adjustments to both determine the relative weights rather accounting system to the department in
payment systems at the same time. We than the Medicare cost report. which they were used, or they may be
have since expanded RTI’s analysis of Commenters noted that regression-based included in the Central Services and
charge compression to incorporate CCRs would not fix the underlying Supply cost center (line 15 of Worksheet
outpatient services. RTI has been mismatch of hospital reporting of costs A). Conversely, the separately
evaluating the cost estimation process and charges. Instead, the commenters chargeable medical supplies should be
for the OPPS cost-based weights, suggested that the impact of charge assigned to the Medical Supplies
including a reassessment of the compression might be mitigated through Charged to Patients cost center on line
regression-based CCR models using both an educational initiative that would 55.
outpatient and inpatient charge data. We note that not only is accurate cost
encourage hospitals to improve their
The RTI report was finalized at the reporting important for IPPS hospitals to
cost reporting. Commenters
conclusion of our proposed rule ensure that accurate relative weights are
recommended that hospitals be
development process and is expected to computed, but hospitals that are still
educated to report costs and charges in paid on the basis of cost, such as CAHs
be posted on the CMS Web site in the a way that is consistent with how
near future. We welcome comments on and cancer hospitals, and SCHs and
charges are grouped in the MedPAR file. MDHs must adhere to Medicare cost
this report. In an effort to achieve this goal, hospital reporting principles as well.
A second reason that we did not associations have launched an The CY 2008 OPPS/ASC final rule
implement regression-based CCRs at the educational campaign to encourage with comment period (72 FR 66601)
time of the FY 2008 IPPS final rule with consistent reporting, which would also discussed the issue of charge
comment period was our inability to result in consistent groupings of the cost compression and regression-based
investigate how regression-based CCRs centers used to establish the cost-based CCRs, and noted that RTI is currently
would interact with the implementation relative weights. The commenters evaluating the cost estimation process
of MS–DRGs. We stated that we would requested that CMS communicate to the underpinning the OPPS cost-based
consider the results of the second phase fiscal intermediaries/MACs that such weights, including a reassessment of the
of the RAND study as we prepared for action is appropriate. In the FY 2008 regression models using both outpatient
the FY 2009 IPPS rulemaking process. IPPS final rule with comment period, and inpatient charges, rather than
The purpose of the RAND study was to we stated that we were supportive of the inpatient charges only. In responding to
analyze how the relative weights would educational initiative of the industry, comments in the CY 2008 OPPS/ASC
change if we were to adopt regression- and we encouraged hospitals to report final rule with comment period, we
based CCRs to address charge costs and charges consistently with how emphasized that we ‘‘fully support’’ the
compression while simultaneously the data are used to determine relative educational initiatives of the industry
adopting an HSRV methodology using weights (72 FR 47196). We would also and that we would ‘‘examine whether
fully phased-in MS–DRGs. We had like to affirm that the longstanding the educational activities being
intended to include a detailed Medicare principles of cost undertaken by the hospital community
discussion of RAND’s study in this FY apportionment at 42 CFR 413.53 convey to improve cost reporting accuracy
2009 IPPS proposed rule. However, due that, under the departmental method of under the IPPS would help to mitigate
to some delays in releasing identifiable apportionment, the cost of each charge compression under the OPPS,
data to the contractor under revised data ancillary department is to be either as an adjunct to the application
security rules, the report on this second apportioned separately rather than being of regression-based CCRs or in lieu of
stage of RAND’s analysis was not combined with another ancillary such an adjustment’’ (72 FR 66601).
completed in time for the development department (for example, combining the However, as we stated in the FY 2008
of this proposed rule. Therefore, we cost of Medical Supplies Charged to IPPS final rule with comment period
continue to have the same concerns Patients with the costs of Operating that we would consider the results of
with respect to uncertainty about how Room or any other ancillary cost center. the RAND study before considering
regression-based CCRs would interact (We note that, effective for cost whether to adopt regression-based
with the MS–DRGs or an HSRV reporting periods starting on or after CCRs, in the CY 2008 OPPS/ASC final
methodology. Therefore, we are not January 1, 1979, the departmental rule with comment period, we stated
jlentini on PROD1PC65 with PROPOSALS2
proposing to adopt the regression-based method of apportionment replaced the that we would determine whether
CCRs or an HSRV methodology in this combination method of apportionment refinements should be proposed, after
FY 2009 IPPS proposed rule. where all the ancillary departments reviewing the results of the RTI study.
Nevertheless, we welcome public were apportioned in the aggregate On February 29, 2008, we issued
comments on our proposals not to adopt (Section 2200.3 of the Provider Transmittal 321, Change Request 5928,
regression-based CCRs or an HSRV Reimbursement Manual (PRM), Part I).) to inform the fiscal intermediaries/
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23544 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
MACs of the hospital associations’ CAHs and, to some extent, SCHs and patients and multiply each of these 15
initiative to encourage hospitals to MDHs), and to consider the CCRs by the Medicare charges on
modify their cost reporting practices administrative burden associated with Worksheet D–4 for those same cost
with respect to costs and charges in a adapting to new cost reporting forms centers to impute the Medicare cost for
manner that is consistent with how and instructions. Accordingly, we are each of the 15 cost groups. Under this
charges are grouped in the MedPAR file. proposing to focus at this time on the proposal, the goal would be to split the
We noted that the hospital cost reports CCR for Medical Supplies and current CCR for Medical Supplies and
submitted for FY 2008 may have costs Equipment because RTI found that the Equipment into one CCR for medical
and charges grouped differently than in largest impact on the relative weights supplies, and another CCR for devices
prior years, which is allowable as long could result from correcting charge and DME Rented and DME Sold.
as the costs and charges are properly compression for devices and implants. In considering how to instruct
matched and the Medicare cost When examining markup differences hospitals on what to report in the cost
reporting instructions are followed. within the Medical Supplies Charged to center for supplies and the cost center
Furthermore, we recommended that Patients cost center, RTI found that its for devices, we looked at the existing
fiscal intermediaries/MACs remain ‘‘regression results provide solid criteria for what type of device qualifies
vigilant to ensure that the costs of items evidence that if there were distinct cost for payment as a transitional pass-
and services are not moved from one centers for items, cost ratios for devices through device category in the OPPS.
cost center to another without moving and implants would average about 17 (There are no such existing criteria for
their corresponding charges. Due to a points higher than the ratios for other devices under the IPPS.) The provisions
time lag in submittal of cost reporting medical supplies’’ (January 2007 RTI of the regulations under § 419.66(b) state
data, the impact of changes in providers’ report, page 59). This suggests that that for a medical device to be eligible
cost reporting practices occurring much of the charge compression within for pass-through payment under the
during FY 2008 would be reflected in the Medical Supplies CCR results from OPPS, the medical device must meet the
the FY 2011 IPPS relative weights. inclusion of medical devices that have following criteria:
significantly different markups than the a. If required by the FDA, the device
2. Refining the Medicare Cost Report
other supplies in that CCR. must have received FDA approval or
In developing this FY 2009 proposed Furthermore, in the FY 2007 final rule clearance (except for a device that has
rule, we considered whether there were and FY 2008 IPPS final rule with received an FDA investigational device
concrete steps we could take to mitigate comment period, the Medical Supplies exemption (IDE) and has been classified
the bias introduced by charge and Equipment CCR received significant as a Category B device by the FDA in
compression in both the IPPS and OPPS attention by the public commenters. accordance with §§ 405.203 through
relative weights in a way that balance Although we are proposing to make 405.207 and 405.211 through 405.215 of
hospitals’ desire to focus on improving improvements to lessen the effects of the regulations) or another appropriate
the cost reporting process through charge compression only on the Medical FDA exemption.
educational initiatives with device Supplies and Equipment CCR as a first b. The device is determined to be
industry interest in adopting regression- step, we are inviting public comments reasonable and necessary for the
adjusted CCRs. Although RTI as to whether to make other changes to diagnosis or treatment of an illness or
recommended adopting regression- the Medicare cost report to refine other injury or to improve the functioning of
based CCRs, particularly for medical CCRs. In addition, we are open to a malformed body part (as required by
supplies and devices, as a short-term making further refinements to other section 1862(a)(1)(A) of the Act).
solution to address charge compression, CCRs in the future. Therefore, we are c. The device is an integral and
RTI also recommended refinements to proposing at this time to add only one subordinate part of the service
the cost report as a long-term solution. cost center to the cost report, such that, furnished, is used for one patient only,
RTI’s draft interim March 2007 report in general, the costs and charges for comes in contact with human tissues,
discussed a number of options that relatively inexpensive medical supplies and is surgically implanted or inserted
could improve the accuracy and would be reported separately from the whether or not it remains with the
precision of the CCRs currently being costs and charges of more expensive patient when the patient is released
derived from the Medicare cost report devices (such as pacemakers and other from the hospital.
and also reduce the need for implantable devices). We will consider d. The device is not any of the
statistically-based adjustments. As public comments submitted on this following:
mentioned in the FY 2008 IPPS final proposed rule for purposes of both the • Equipment, an instrument,
rule with comment period (72 FR IPPS and the OPPS relative weights and, apparatus, implement, or item of this
47193), we believe that RTI and many by extension, the calculation of the type for which depreciation and
of the public commenters on the FY ambulatory surgical center (ASC) financing expenses are recovered as
2008 IPPS proposed rule concluded payment rates. depreciable assets as defined in Chapter
that, ultimately, improved and more Under the IPPS for FY 2007 and FY 1 of the Medicare Provider
precise cost reporting is the best way to 2008, the aggregate CCR for supplies Reimbursement Manual (CMS Pub. 15–
minimize charge compression and and equipment was computed based on 1).
improve the accuracy of cost weights. line 55 for Medical Supplies Charged to • A material or supply furnished
Therefore, in this proposed rule, we are Patients and lines 66 and 67 for DME incident to a service (for example, a
proposing to begin making cost report Rented and DME Sold, respectively. To suture, customized surgical kit, or clip,
changes geared to improving the compute the 15 national CCRs used in other than a radiological site marker).
accuracy of the IPPS and OPPS relative developing the cost-based weights • Material that may be used to replace
jlentini on PROD1PC65 with PROPOSALS2
weights. However, we also received under the IPPS (explained in more human skin (for example, a biological or
comments last year asking that we detail under section II.H. of the synthetic material).
proceed cautiously with changing the preamble of this proposed rule), we take These requirements are the OPPS
Medicare cost report to avoid the costs and charges for the 15 cost criteria used to define a device for pass-
unintended consequences for hospitals groups from Worksheet C, Part I of the through payment purposes and do not
that are paid on a cost basis (such as Medicare cost report for all hospital include additional criteria that are used
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23545
under the OPPS to determine if a surgical kit, or clip, other than a some charge compression could
candidate device is new and represents radiological site marker). continue for these technologies. We
a substantial clinical improvement, two • Material that may be used to replace believe this limited presence of charge
other requirements for qualifying for human skin (for example, a biological or compression is acceptable, given that
pass-through payment. synthetic material). the proposed definition of device for
For purposes of applying the • A medical device that is used cost reporting purposes would isolate
eligibility criteria, we interpret ‘‘surgical during a procedure or service and does virtually all of the expensive items,
insertion or implantation’’ to include not remain in the patient when the allowing them to be separately reported
devices that are surgically inserted or patient is released from the hospital. from most inexpensive supplies.
implanted via a natural or surgically We are proposing to select the
The criteria we are proposing above
created orifice as well as those devices existing criteria for what type of device
for instructing hospitals as to what to
that are inserted or implanted via a qualifies for payment as a transitional
report in the device cost center specify
surgically created incision (70 FR pass-through device under the OPPS as
that a device is not a material or supply
68630). a basis for instructing hospitals on what
furnished incident to a service (for
In proposing to modify the cost report to report in the cost center for Medical
Supplies Charged to Patients or the cost example, a surgical staple, a suture,
to have one cost center for medical customized surgical kit, or clip, other
supplies and one cost center for devices, center for Medical Devices Charged to
Patients because these criteria are than a radiological site marker)
we are proposing that hospitals would (emphasis added). We understand that
concrete and already familiar to the
determine what should be reported in hospitals may sometimes receive
hospital community. However, the key
the Medical Supplies cost center and surgical kits from device manufacturers
difference between the existing criteria
what should be reported in the Medical that consist of a high-cost primary
for devices that are eligible for pass-
Devices cost center using criteria implantable device, external supplies
through payment under the OPPS at
consistent with those listed above that required for operation of the device, and
§ 419.66(b) and our proposed criteria
are included under § 419.66(b), with other disposable surgical supplies
stated above to be used for cost
some modification. Specifically, for required for successful device
reporting purposes is that the device
purposes of the cost reporting implantation. Often the device and the
that is implanted remains in the patient
instructions, we are proposing that an attending supplies are included on a
when the patient is discharged from the
item would be reported in the device hospital. Essentially, we are proposing single invoice from the manufacturer,
cost center if it meets the following to instruct hospitals to report only making it difficult for the hospital to
criteria: implantable devices that remain in the determine the cost of each item in the
a. If required by the FDA, the device patient at discharge in the cost center kit. In addition, manufacturers
must have received FDA approval or for devices. All other devices and non- sometimes include with the primary
clearance (except for a device that has routine supplies which are separately device other free or ‘‘bonus’’ items or
received an FDA investigational device chargeable would be reported in the supplies that are not an integral and
exemption (IDE) and has been classified medical supplies cost center. We believe necessary part of the device (that is, not
as a Category B device by the FDA in that defining a device for cost reporting actually required for the safe surgical
accordance with §§ 405.203 through purposes based on criteria that specify implantation and subsequent operation
405.207 and 405.211 through 405.215 of implantation and adding that the device of that device). (We note that
the regulations) or another appropriate must remain in the patient upon arrangements involving free or bonus
FDA exemption. discharge would have the benefit of items or supplies may implicate the
b. The device is reasonable and capturing virtually all costly Federal anti-kickback statue, depending
necessary for the diagnosis or treatment implantable devices (for example, on the circumstances.) One option is for
of an illness or injury or to improve the implantable cardioverter defibrillators the hospital to split the total combined
functioning of a malformed body part (ICDs), pacemakers, and cochlear charge on the invoice in a manner that
(as required by section 1862(a)(1)(A) of implants) for which charge compression the hospital believes best identifies the
the Act). is a significant concern. cost of the device alone. However,
c. The device is an integral and However, we acknowledge that a because it may be difficult for hospitals
subordinate part of the service definition of device based on whether to determine the respective costs of the
furnished, is used for one patient only, an item is implantable and remains in actual device and the attending supplies
comes in contact with human tissue, is the patient could, in some cases, (whether they are required for the safe
surgically implanted or inserted through include items that are relatively surgical implantation and subsequent
a natural or surgically created orifice or inexpensive (for example, urinary operation of that device or not), we are
surgical incision in the body, and catheters, fiducial markers, vascular soliciting comments with respect to how
remains in the patient when the patient catheters, and drainage tubes), and supplies, disposable or otherwise, that
is discharged from the hospital. which many would consider to be are part of surgical kits should be
d. The device is not any of the supplies. Thus, some modest amount of reported. We are distinguishing between
following: charge compression could still be such supplies that are an integral and
• Equipment, an instrument, present in the cost center for devices if necessary part of the primary device
apparatus, implement, or item of this the hospital does not have a uniform (that is, required for the safe surgical
type for which depreciation and markup policy. In addition, requiring as implantation and subsequent operation
financing expenses are recovered as a cost reporting criterion that the device of that device) from other supplies that
depreciable assets as defined in Chapter is to remain in the patient at discharge are not directly related to the
jlentini on PROD1PC65 with PROPOSALS2
1 of the Medicare Provider could exclude certain technologies that implantation of that device, but may be
Reimbursement Manual (CMS Pub. 15– are moderately expensive (for example, included by the device manufacturer
1). cryoablation probes, angioplasty with or without charge as ‘‘perks’’ along
• A material or supply furnished catheters, and cardiac echocardiography with the kit. If it is difficult to break out
incident to a service (for example, a catheters, which do not remain in the the costs and charges of these lower cost
surgical staple, a suture, customized patient upon discharge). Therefore, items that are an integral and necessary
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23546 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
part of the primary device, we would threshold would be reported in the cost to divide the Medical Supplies cost
consider allowing hospitals to report the center for Medical Supplies. center based on markup policies by
costs and charges of these lower cost Establishing a cost threshold for cost placing items with lower than average
supplies along with the costs and reporting purposes would directly markups in a separate cost center. This
charges of the more expensive primary address the problem of charge approach would center on
device in the cost report cost center for compression and would enable documentation requirements for
implantable devices. However, to the hospitals to easily determine whether an differential charging practices that
extent that device manufacturers could item should be reported in the supply would lead hospitals to distinguish
be encouraged to refine their invoicing or the device cost center. A cost between the reporting of supplies and
practices to break out the charges and threshold would also potentially allow devices on different cost report lines.
costs for the lower cost supplies and the a broader variety of expensive, single That is, because charge compression
higher cost primary device separately, use devices that do not remain in the results from the different markup
so that hospitals need not ‘‘guesstimate’’ patient at discharge to be reported in the policies that hospitals apply to the
the cost of the device, this would device cost center (such as specialized supplies and devices they use based on
facilitate more accurate cost reporting catheters or ablation probes). While we the estimated costs of those supplies
and, therefore, the calculation of more have a number of concerns with the cost and devices, isolating supplies and
accurate cost-based weights. Under threshold approach, we are nevertheless devices with different markup policies
either scenario, even for an aggregated soliciting public comments on whether mitigates aggregation in markup policies
invoice that contains an expensive such an approach would be worthwhile that cause charge compression and is
device, we believe that RTI’s findings of to pursue. Specifically, we are specific to a hospital’s internal
significant differences in supply CCRs concerned that establishing a single cost accounting and pricing practices. If
for hospitals with a greater percentage of threshold for pricing devices could requested by the fiscal intermediaries/
charges in device revenue codes possibly be inaccurate across hospitals. MACs at audit, hospitals could be
demonstrate that breaking the Medical Establishing a threshold would require required to submit documentation of
Supplies Charged to Patients cost center identifying a cost at which hospitals their markup policies to justify the way
into two cost centers and using would begin applying reduced markup they have reported relatively
appropriate revenue codes for devices, policies. Currently, we do not have data inexpensive supplies on one line and
and walking those costs to the new from which to derive a threshold. We more expensive devices on the other
Implantable Devices Charged to Patients have anecdotal reports that hospitals line. We believe that it should not be too
cost center, will result in an increase in change their markup thresholds difficult for hospitals to document their
estimated device costs. between $15,000 and $20,000 in markup practices because, as was
In summary, we are proposing to acquisition costs. Recent research on pointed out by many commenters since
modify the cost report to have one cost this issue indicated that hospitals with the implementation of cost-based
center for Medical Supplies Charged to average inpatient discharges in DRGs weights, the source of charge
Patients and one cost center for with supply charges greater than compression is varying markup
Implantable Devices Charged to $15,000, $20,000, and $30,000 have practices. Greater knowledge of the
Patients. We are proposing to instruct higher supply CCRs (Advamed March specifics of hospital markup practices
hospitals to report only devices that 2006). may allow ultimately for development
meet the four criteria listed above Furthermore, although a cost of standard cost reporting instructions
(specifically including that the device is threshold directly addresses charge that instruct hospitals to report an item
implantable and remains in the patient compression, it may not eliminate all as a device or a supply based on the
at discharge) in the cost center for charge compression from the device cost type of markup applied to that item.
Implantable Devices Charged to center because a fixed cost threshold This option related to markup practices,
Patients. All other devices and may not accurately capture differential the proposal to define devices based on
nonchargeable supplies would be markup policies for an individual four specific criteria, and the third
reported in the Medical Supplies cost hospital. At the same time, we are also alternative that would establish a cost
center. This would allow for two concerned that establishing a cost threshold for purposes of distinguishing
distinct CCRs, one for medical supplies threshold may interfere with the pricing between high-cost and low-cost items,
and one for implantable devices and practices of device manufacturers in could be utilized separately or in some
DME rented and DME sold. that the prices for certain devices or combination for purposes of cost report
However, we are also soliciting surgical kits could be inflated to ensure modification. Again, we are soliciting
comments on alternative approaches that the devices met the cost threshold. comments on these alternative
that could be used in conjunction with We believe our proposed approach of approaches. We are also interested in
or in lieu of the four proposed criteria identifying a group of items that are other recommendations for appropriate
for distinguishing between what should relatively expensive based on the cost reporting improvements that
be reported in the cost center for existing criteria for OPPS device pass- address charge compression.
Implantable Devices and Medical through payment status, rather than
Supplies, respectively. Another option adopting a cost threshold, would not 3. Timeline for Revising the Medicare
we are considering would distinguish influence pricing by the device Cost Report
between high-cost and low-cost items industry. In addition, if a cost threshold As mentioned in the FY 2008 IPPS
based on a cost threshold. Under this were adopted for distinguishing final rule with comment period (72 FR
methodology, we would also have one between high-cost devices and low-cost 47198), we have begun a comprehensive
cost center for Medical Supplies and supplies on the cost report, we would review of the Medicare hospital cost
jlentini on PROD1PC65 with PROPOSALS2
one cost center for Devices, but we need to periodically reassess the report, and the proposed splitting of the
would instruct hospitals to report items threshold for changes in markup current cost center for Medical Supplies
that are not movable equipment or a policies and price inflation over time. Charged to Patients into one line for
capital expense but are above a certain Another option for distinguishing Medical Supplies Charged to Patients
cost threshold in the cost center for between high-cost and low-cost items and another line for Implantable
Devices. Items costing below that for purposes of the cost report would be Devices Charged to Patients, is part of
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23547
our initiative to update and revise the Patients cost center, equal attention revenue code of 0623 for surgical
hospital cost report. Under an effort must be paid to the way in which dressings would similarly be associated
initiated by CMS to update the Medicare charges are grouped by hospitals in the with the costs and charges of items
hospital cost report to eliminate MedPAR file. Several commenters on reported in the proposed Medical
outdated requirements in conjunction the FY 2008 IPPS proposed rule Supplies Charged to Patients cost
with the Paperwork Reduction Act, we supported RTI’s recommendation of center, while a revenue code of 0624 for
plan to propose the actual changes to including additional fields in the FDA investigational device, if that
the cost reporting form, the attending MedPAR file to disaggregate certain cost device does not remain in the patient
cost reporting software, and the cost centers. One commenter stated that the upon discharge, could be associated
report instructions in Chapter 36 of the assignment of revenue codes and with items reported on the Medical
Medicare Provider Reimbursement charges to revenue centers in the Supplies Charged to Patients cost center
Manual (PRM), Part II. We expect the MedPAR file should be reviewed and as well.
proposed revision to the Medicare changed to better reflect hospital
hospital cost report to be issued after In general, if an item is reported as an
accounting practices as reflected on the
publication of this IPPS proposed rule. cost report (72 FR 47198). implantable device on the cost report,
If we were to adopt as final our proposal the associated charges should be
In an effort to improve the match recorded in the MedPAR file with either
to create one cost center for Medical between the costs and charges included
Supplies Charged to Patients and one revenue codes 0275 (Pacemaker), 0276
on the cost report and the charges in the (Intraocular Lens), or 0278 (Other
cost center for Implantable Devices MedPAR file, we are recommending that
Charged to Patients in the FY 2009 IPPS Implants). Likewise, items reported as
certain revenue codes be used for items
final rule, the cost report forms and Medical Supplies should receive an
reported in the proposed Medical
instructions would reflect those appropriate revenue code indicative of
Supplies Charged to Patients cost center
changes. We expect the revised cost supplies. We understand that many of
and the proposed Implantable Devices
report would be available for hospitals these revenue codes have been in
Charged to Patients cost center,
to use when submitting cost reports existence for many years and have been
respectively. Specifically, under the
during FY 2009 (that is, for cost added for purposes unrelated to the goal
proposal to create a cost center for
reporting periods beginning on or after of refining the calculation of cost-based
implantable devices that remain in the
October 1, 2008). Because there is weights. Accordingly, we acknowledge
patient upon discharge, revenue codes
approximately a 3-year lag between the that additional instructions relating to
0275 (Pacemaker), 0276 (Intraocular
availability of cost report data for IPPS the appropriate use of these revenue
Lens), and 0278 (Other Implants) would
and OPPS ratesetting purposes and a codes may need to be issued. In
correspond to implantable devices
given fiscal year, we may be able to addition, CMS or the hospital
reported in the proposed Implantable
derive two distinct CCRs, one for associations may need to request new
Devices Charged to Patients cost center.
medical supplies and one for devices, revenue codes from the National
Items for which a hospital may have
for use in calculating the FY 2012 IPPS Uniform Billing Committee (NUBC). In
previously used revenue code 0270
relative weights and the CY 2012 OPPS either case, we do not believe either
relative weights. (General Classification), but actually
meet the proposed definition of an should delay use of the new Medical
4. Revenue Codes Used in the MedPAR implantable device that remains in the Supplies and Implantable Devices CCRs
File patient upon discharge should instead in setting payment rates. However, in
be billed with the 0278 revenue code. light of our proposal to create two
An important first step in RTI’s study
Conversely, relatively inexpensive items separate cost centers for Medical
(as explained in its draft interim March
and supplies that are not implantable Supplies Charged to Patients and
2007 report) was determining how well
and do not remain in the patient at Implantable Devices Charged to
the cost report charges used to compute
discharge would be reported in the Patients, respectively, we are soliciting
CCRs matched to the charges in the
MedPAR file. This match (or lack proposed Medical Supplies Charged to comments on how the existing revenue
thereof) directly affects the accuracy of Patients cost center on the cost report, codes or additional revenue codes could
the DRG cost estimates because and should be billed with revenue codes best be used in conjunction with the
MedPAR charges are multiplied by 0271 (nonsterile supply), 0272 (sterile revised cost centers on the cost report.
CCRs to estimate cost. RTI found supply), and 0273 (take-home supplies), F. Preventable Hospital-Acquired
inconsistent reporting between the cost as appropriate. Revenue code 0274 Conditions (HACs), Including Infections
reports and the claims data for charges (Prosthetic/Orthotic devices) and
in several ancillary departments revenue code 0277 (Oxygen—Take 1. General
(Medical Supplies, Operating Room, Home) should be associated with the
Cardiology, and Radiology). For costs reported on lines 66 and 67 for In its landmark 1999 report ‘‘To Err is
example, the data suggested that some DME—Rented and DME—Sold on the Human: Building a Safer Health
hospitals often include costs and cost report. Charges associated with System,’’ the Institute of Medicine
charges for devices and other medical supplies used incident to radiology or to found that medical errors, particularly
supplies within the Medicare cost report other diagnostic services (revenue codes hospital-acquired conditions (HACs)
cost centers for Operating Room, 0621 and 0622 respectively) should caused by medical errors, are a leading
Radiology, or Cardiology, while other match those items used incident to cause of morbidity and mortality in the
hospitals include them in the Medical those services on the Medical Supplies United States. The report noted that the
Supplies Charged to Patients cost Charged to Patients cost center of the number of Americans who die each year
jlentini on PROD1PC65 with PROPOSALS2
center. While the educational initiative cost report, because, under this as a result of medical errors that occur
undertaken by the national hospital proposal, supplies furnished incident to in hospitals may be as high as 98,000.
associations is encouraging hospitals to a service would be reported in the The cost burden of HACs is also high.
consistently report costs and charges for Medical Supplies Charged to Patients Total national costs of these errors due
devices and other medical supplies only cost center (see item b. listed above, in to lost productivity, disability, and
in the Medical Supplies Charged to the proposed definition of a device). A health care costs were estimated at $17
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23548 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
billion to $29 billion.2 In 2000, the CDC and providing direct support for the hospital would otherwise receive for
estimated that hospital-acquired providers through Quality Improvement uncomplicated cases paid under the
infections added nearly $5 billion to Organization (QIO) activities. CMS’ same DRG. To this extent, the IPPS
U.S. health care costs every year.3 A application of VBP tools through encourages hospitals to avoid
2007 study found that, in 2002, 1.7 various initiatives, such as this HAC complications. However, complications,
million hospital-acquired infections provision, is transforming Medicare such as infections, acquired in the
were associated with 99,000 deaths4 from a passive payer to an active hospital can generate higher Medicare
Research has also shown that hospitals purchaser of higher value health care payments in two ways. First, the
are not following recommended services. We are applying these treatment of complications can increase
guidelines to avoid preventable strategies for inpatient hospital care and the cost of a hospital stay enough to
hospital-acquired infections. A 2007 across the continuum of care for generate an outlier payment. However,
Leapfrog Group survey of 1,256 Medicare beneficiaries. the outlier payment methodology
hospitals found that 87 percent of those The President’s FY 2009 Budget
requires that a hospital experience a
hospitals do not follow outlines another approach for
large loss on an outlier case, which
recommendations to prevent many of addressing serious preventable adverse
events (‘‘never events’’), including serves as an incentive for hospitals to
the most common hospital-acquired
HACs. The President’s Budget proposal prevent outliers. Second, under the MS–
infections.5
As one approach to combating HACs, would: (1) Prohibit hospitals from DRGs that took effect in FY 2008, there
including infections, in 2005 Congress billing the Medicare program for ‘‘never are currently 258 sets of MS–DRGs that
authorized CMS to adjust for Medicare events’’ and prohibit Medicare payment are split into 2 or 3 subgroups based on
IPPS hospital payments to encourage for these events; and (2) require the presence or absence of a CC or an
the prevention of these conditions. The hospitals to report occurrence of these MCC. If a condition acquired during a
preventable HAC provision at section events or receive a reduced annual hospital stay is one of the conditions on
1886(d)(4)(D) of the Act is part of an payment update. the CC or MCC list, the hospital
array of Medicare value-based Medicare’s IPPS encourages hospitals currently receives a higher payment
purchasing (VBP) tools that CMS is to treat patients efficiently. Hospitals under the MS–DRGs (prior to the
using to promote increased quality and receive the same DRG payment for stays October 1, 2008 effective date of the
efficiency of care. Those tools include that vary in length and in the services HAC payment provision). (We refer
measuring performance, using payment provided, which gives hospitals an readers to section II.D. of the FY 2008
incentives, publicly reporting incentive to avoid unnecessary costs in IPPS final rule with comment period for
performance results, applying national the delivery of care. In many cases, a discussion of DRG reforms (72 FR
and local coverage policy decisions, complications acquired in the hospital 47141).) The following is an example of
enforcing conditions of participation, do not generate higher payments than how an MS–DRG may be paid.
2. Statutory Authority are: (a) High cost, high volume, or both; prevented through the application of
(b) assigned to a higher paying DRG evidence-based guidelines. Beginning
Section 1886(d)(4)(D) of the Act when present as a secondary diagnosis; October 1, 2008, Medicare can no longer
required the Secretary to select at least and (c) could reasonably have been assign an inpatient hospital discharge to
two conditions by October 1, 2007, that
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2 Institute of Medicine: To Err Is Human: Building 3 Centers for Disease Control and Prevention: Public Health Reports. March–April 2007. Volume
a Safer Health System, November 1999. Available Press Release, March 2000. Available at: http:// 122.
at: http://www.iom.edu/Object.File/Master/4/117/ www.cdc.gov/od/oc/media/pressrel/r2k0306b.htm. 5 2007 Leapfrog Group Hospital Survey. The
ToErr–8pager.pdf. 4 Klevens et al. Estimating Health Care-Associated Leapfrog Group 2007. Available at: http://
Infections and Deaths in U.S. Hospitals, 2002. www.leapfroggroup.org/media/file/Leapfrog_
hospital_acquired_infections_release.pdf
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a higher paying MS–DRG if a selected initially apply, and noted that we would • Complicating Condition (CC) or
HAC was not present on admission. be seeking comments on additional Major Complicating Condition (MCC)—
That is, the case will be paid as though HAC candidates in this proposed rule. Selected conditions must be represented
the secondary diagnosis was not by ICD–9-CM diagnosis codes that
4. Collaborative Process
present. (Medicare will continue to clearly identify the condition, are
assign a discharge to a higher paying CMS experts worked with public designated as a CC or an MCC, and
MS–DRG if the selected condition was health and infectious disease result in the assignment of the case to
present on admission.) Section professionals from the CDC to identify an MS-DRG that has a higher payment
1886(d)(4)(D) of the Act provides that the candidate preventable HACs. CMS when the code is reported as a
the list of conditions can be revised and CDC staff also collaborated on the secondary diagnosis. That is, selected
from time to time, as long as the list process for hospitals to submit a POA conditions must be a CC or an MCC that
contains at least two conditions. indicator for each diagnosis listed on would, in the absence of this provision,
Beginning October 1, 2007, we required IPPS hospital Medicare claims. result in assignment to a higher paying
hospitals to begin submitting On December 17, 2007, CMS and CDC MS-DRG.
information on Medicare claims hosted a jointly sponsored HAC and
specifying whether diagnoses were POA Listening Session to receive input • Evidence-Based Guidelines—
present on admission (POA). from interested organizations and Selected conditions must be reasonably
The POA indicator reporting individuals. The agenda, presentations, preventable through the application of
requirement and the HACs payment audio file, and written transcript of the evidence-based guidelines. By
provision apply to IPPS hospitals only. listening session are available on the reviewing guidelines from professional
At this time, non-IPPS hospitals such as Web site at: http://www.cms.hhs.gov/ organizations, academic institutions,
CAHs, LTCHs, IRFs, and hospitals in HospitalAcqCond/ and entities such as the Healthcare
Maryland operating under waivers, 07_EducationalResources.asp. CMS and Infection Control Practices Advisory
among others, are exempt from POA CDC also received informal comments Committee (HICPAC), we evaluated
reporting and the HAC payment during the listening session and whether guidelines are available that
provision. Throughout this section, subsequently received numerous hospitals should follow to prevent the
‘‘hospital’’ refers to IPPS hospitals. written comments. condition from occurring in the
hospital.
3. Public Input 5. Selection Criteria for HACs
• Reasonably Preventable—Selected
In the FY 2007 IPPS proposed rule (71 CMS and CDC staff evaluated each conditions must be reasonably
FR 24100), we sought public input candidate condition against the criteria preventable through the application of
regarding conditions with evidence- established by section 1886(d)(4)(D)(iv) evidence-based guidelines.
based prevention guidelines that should of the Act.
be selected in implementing section • Cost or Volume—Medicare data 6 6. HACs Selected in FY 2008 and
1886(d)(4)(D) of the Act. The public must support that the selected Proposed Changes to Certain Codes
comments we received were conditions are high cost, high volume,
or both. At this point, there are no The HACs that were selected for the
summarized in the FY 2007 IPPS final
rule (71 FR 48051 through 48053). In the Medicare claims data indicating which HAC payment provision through the FY
FY 2008 IPPS proposed rule (72 FR secondary diagnoses were POA because 2008 IPPS final rule with comment
24716), we again sought formal public POA indicator reporting began only period are listed below. The payment
comment on conditions that we recently; therefore, the currently provision for these selected HACs will
proposed to select. In the FY 2008 IPPS available data for candidate conditions take effect on October 1, 2008. We refer
final rule with comment period (72 FR includes all secondary diagnoses. readers to section II.F.6. of the FY 2008
47200 through 47218), we summarized IPPS final rule with comment period (72
the public comments we received on the 6 For this FY 2009 IPPS proposed rule, the DRG FR 47202 through 47218) for a detailed
FY 2008 IPPS proposed rule, presented analysis is based on data from the September 2007 analysis supporting the selection of each
update of the FY 2007 MedPAR file, which contains of these HACs.
our responses, selected eight conditions hospital bills received through September 30, 2007,
to which the HAC provision will for discharges through September 30, 2007. BILLING CODE 4120–01–P
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We are seeking public comments on resource utilization. At its September codes 707.23 and 707.24 as MCCs. We
the following refinements to two of the 27–28, 2007 meeting, the ICD–9–CM are proposing to classify codes 707.20,
previously selected HACs: Coordination and Maintenance 707.21, and 707.22 as non-CCs.
Committee discussed the creation of Therefore, we are proposing that,
a. Foreign Object Retained After
pressure ulcer codes to capture this beginning October 1, 2008, the codes
Surgery: Proposed Inclusion of ICD–9–
information. The new codes, along with used to make MS–DRG adjustments for
CM Code 998.7 (CC)
their proposed CC/MCC classifications, pressure ulcers under the HAC
In the FY 2008 IPPS final rule with are shown in Table 6A of the provision would include the proposed
comment period (72 FR 47206), we Addendum to this proposed rule. The MCC codes 707.23 and 707.24.
indicated that a foreign body new codes are as follows:
accidentally left in the patient during a • 707.20 (Pressure ulcer, unspecified 7. HACs Under Consideration as
procedure (ICD–9–CM code 998.4) was stage). Additional Candidates
one of the conditions selected. It has • 707.21 (Pressure ulcer stage I). CMS and CDC have diligently worked
come to our attention that ICD–9–CM • 707.22 (Pressure ulcer stage II). together and with other stakeholders to
diagnosis code 998.7 (Acute reaction to • 707.23 (Pressure ulcer stage III). identify additional HACs that might
foreign substance accidentally left • 707.24 (Pressure ulcer stage IV). appropriately be subject to the HAC
during a procedure) should also be While the code titles are final, we are
payment provision. If the additional
included. ICD–9–CM code 998.7 soliciting comment on the proposed
candidate HACs are selected in the FY
describes instances in which a patient MS–DRG classifications of these codes,
2009 IPPS final rule, the payment
developed an acute reaction due to a as indicated in Table 6A of the
provision will take effect for these
retained foreign substance. Therefore, Addendum to this proposed rule. We
candidate HACS on October 1, 2008.
we are proposing to make this code are proposing to remove the CC/MCC
The statutory criteria for each HAC
subject to the HAC payment provision. classifications from the current pressure
candidate are presented in tabular
ulcer codes that show the site of the
b. Pressure Ulcers: Proposed Changes in format. Each table contains the
ulcer (ICD–9–CM codes 707.00 through
Code Assignments following:
707.09). Therefore, the following codes
would no longer be a CC: • HAC Candidate—We are seeking
As discussed in the FY 2008 IPPS public comment on all HAC candidates.
final rule with comment period (72 FR • 707.00 (Decubitus ulcer,
unspecified site). • Medicare Data—We are seeking
47205–47206), we referred the need for
• 707.01 (Decubitus ulcer, elbow). public comment on the statutory
more detailed ICD–9–CM pressure ulcer
• 707.09 (Decubitus ulcer, other site). criterion of high cost, high volume, or
codes to the CDC. The topic of both as it applies to the HAC candidate.
The following codes would no longer be
expanding pressure ulcer codes to
an MCC: • CC/MCC—We are seeking public
capture the stage of the ulcer was • 707.02 (Decubitus ulcer, upper comment on the statutory criterion that
addressed at the September 27–28, back). an ICD–9–CM diagnosis code(s) clearly
2007, meeting of the ICD–9–CM • 707.03 (Decubitus ulcer, lower identifies the HAC candidate.
Coordination and Maintenance back).
Committee. A summary report of this • Selected Evidence-Based
• 707.04 (Decubitus ulcer, hip). Guidelines—We are seeking public
meeting is available on the Web site at: • 707.05 (Decubitus ulcer, buttock).
http://www.cdc.gov/nchs/about/ comment on the degree to which the
• 707.06 (Decubitus ulcer, ankle). HAC candidate is reasonably
otheract/icd9/maint/maint.htm. • 707.07 (Decubitus ulcer, heel). preventable through the application of
Numerous wound care professionals We are proposing to instead assign the
the identified evidence-based
supported modifying the pressure ulcer CC/MCC classifications to the stage of
guidelines.
codes to capture staging information. the pressure ulcer as shown in Table 6A
The stage of the pressure ulcer is a of the Addendum to this proposed rule. a. Surgical Site Infections Following
powerful predictor of severity and We are proposing to classify ICD–9–CM Elective Surgeries
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In the FY 2008 IPPS final rule with • Total Knee Replacement (81.54): of the statutory criteria to surgical site
comment period (72 FR 47213), surgical ICD–9–CM codes 996.66 (CC) and infections following elective
site infections were identified as a broad 998.59 (CC) procedures, we are particularly
category for consideration, and we • Laparoscopic Gastric Bypass (44.38) interested in receiving comments on the
selected mediastinitis after coronary and Laparoscopic Gastroenterostomy degree of preventability of surgical site
artery bypass graft (CABG) as one of the (44.39): ICD–9–CM code 998.59 (CC) infections following elective procedures
initial eight HACs for implementation. • Ligation and Stripping of Varicose generally, as well as specifically for
Veins (38.50 through 38.53, 38.55, those listed above. We also are seeking
We are now considering the addition of
38.57, and 38.59): ICD–9–CM code public comments on additional elective
other surgical site infections,
998.59 (CC) surgical procedures that would qualify
particularly those following elective Evidence-based guidelines for
procedures. In most cases, patients for the HAC provision by meeting all of
preventing surgical site infections the statutory criteria. Based on the
selected as candidates for elective emphasize the importance of public comments we receive, we may
surgeries should have a relatively low- appropriately using prophylactic select some combination of the four
risk profile for surgical site infections. antibiotics, using clippers rather than procedures presented here along with
The following elective surgical razors for hair removal and tightly additional conditions that qualify and
procedures are under consideration: controlling postoperative glucose. are supported by the comments.
While we are seeking public
comments on the applicability of each b. Legionnaires’ Disease
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We discussed Legionnaires’ Disease in comment period (72 FR 47216). pneumonia caused by the bacterium
the FY 2008 IPPS final rule with Legionnaires’ Disease is a type of Legionella pneumophila. It is contracted
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23554 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
by inhaling contaminated water vapor these water systems. While we are hospital-acquired Legionnaires’ Disease
or droplets. It is not spread person to seeking public comments regarding the can be distinguished from community-
person. Individuals at risk include those applicability of each of the statutory acquired cases.
who are elderly, immunocompromised, criteria to Legionnaires’ Disease, we are We also are seeking public comments
smokers, or persons with underlying particularly interested in receiving on additional water-borne pathogens
lung disease. The bacterium thrives in comments on the degree of that would qualify for the HAC
warm aquatic environments and preventability of Legionnaires’ Disease provision by meeting the statutory
infections have been linked to large through the application of hospital criteria. Based on the public comments
industrial water systems, including water system maintenance guidelines. we receive, we may finalize some
hospital water systems such as air combination of Legionnaires’ Disease
Legionnaires’ Disease is typically
conditioning cooling towers and potable and additional conditions that qualify
acquired outside of the hospital setting
water plumbing systems. Prevention and are supported by the public
and may be difficult to diagnose as
comments.
depends primarily on regular present on admission. We are seeking
monitoring and decontamination of comments on the degree to which c. Glycemic Control
During the December 17, 2007 HAC glycemic control should not occur while each of the statutory criteria to these
and POA Listening Session, one of the under medical care in the hospital extreme aberrations in glycemic control,
commenters suggested that we explore setting. Thus, we are considering we are particularly interested in
hyperglycemia and hypoglycemia as whether the following forms of extreme receiving comments on the degree to
HACs for selection. NQF’s list of Serious glucose derangement should be subject which these extreme aberrations in
Reportable Adverse Events includes to the HAC payment provision: glycemic control are reasonably
death or serious disability associated • Diabetic Ketoacidosis: ICD–9–CM preventable, in the hospital setting,
with hypoglycemia that occurs during codes 250.10–250.13 (CC) through the application of evidence-
hospitalization. • Nonketotic Hyperosmolar Coma:
ICD–9–CM code 251.0 (CC) based guidelines. Based on the public
Hyperglycemia and hypoglycemia are • Diabetic Coma: ICD–9–CM codes comments we receive, we may select
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extremely common laboratory findings 250.30–250.33 (CC) some combination of these glycemic
in hospitalized patients and can be • Hypoglycemic Coma: ICD–9–CM control-related conditions as HACs.
complicating features of underlying codes 250.30–251.0 (CC) d. Iatrogenic Pneumothorax
diseases and some therapies. However, While we are seeking public
we believe that extreme forms of poor comments regarding the applicability of
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Iatrogenic pneumothorax refers to the lung, thoracentesis, central venous of the statutory criteria to iatrogenic
accidental introduction of air into the catheter placement, pleural biopsy, pneumothorax, we are particularly
pleural space, which is the space tracheostomy, and liver biopsy. interested in receiving comments on the
between the lung and the chest wall. Iatrogenic pneumothorax can occur degree to which iatrogenic
When air is introduced into this space secondary to positive pressure pneumothorax is reasonably preventable
it partially or completely collapses the mechanical ventilation when an air sac through the application of evidence-
lung. Iatrogenic pneumothorax can in the lung ruptures allowing air into based guidelines. Based on the public
occur during any procedure where there the pleural space. comments we receive, we may select
is the possibility of air entering pleural iatrogenic pneumothorax as an HAC.
While we are seeking public
space, including needle biopsy of the comments on the applicability of each e. Delirium
Delirium is a relatively abrupt admission. Having delirium is a very 30 to 40 percent of the possible cases.
deterioration in a patient’s ability to serious risk factor, with 1-year mortality While we are seeking public comments
sustain attention, learn, or reason. of 35 to 40 percent, a rate as high as on the applicability of each of the
Delirium is strongly associated with those associated with heart attacks and statutory criteria to delirium, we are
aging and treatment of illnesses that are sepsis. The adverse effects of delirium particularly interested in receiving
associated with hospitalizations. routinely last for months. Delirium is a comments on the degree to which
Delirium affects nearly half of hospital clinical diagnosis, commonly assisted delirium is reasonably preventable
patient days for individuals age 65 and by screening tests such as the Confusion through the application of evidence-
older, and approximately three-quarters Assessment Method. based guidelines. Based upon the public
Well-established practices, such as comments we receive, we may select
of elderly individuals in intensive care
reducing certain medications, delirium as an HAC.
units have delirium. About 14 to 24 reorienting the patient, assuring sensory
percent of hospitalized elderly input and sleep, and avoiding f. Ventilator-Associated Pneumonia
individuals have delirium at the time of malnutrition and dehydration, prevent (VAP)
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We discussed ventilator-associated Clinical Practice Guidelines at the Web that at least 20 percent of nosocomial
pneumonia (VAP) in the FY 2008 IPPS site: http://www.rcjournal.com/cpgs/ infections in general (not just VAP) are
final rule with comment period (72 FR 09.03.0869.html. preventable.7
47209–47210). VAP is a serious To further investigate the extent to During the December 17, 2007 HAC
hospital-acquired infection associated which VAP is reasonably preventable, and POA Listing Session, we also
with high mortality, significantly we reviewed published clinical received comments on evidence-based
increased hospital length of stay, and research. The literature, including guidelines for preventing VAP.
high cost. It is typically caused by the recommendations by CDC and the Commenters referenced two articles 8 9
aspiration of contaminated gastric and/ HICPAC, from 2003 shows numerous that both state there is a high degree of
or oropharyngeal secretions. The prevention guidelines that can risk associated with endotracheal tube
presence of an endotracheal tube significantly reduce the incidence of insertions, suggesting that VAP may not
facilitates both the contamination of VAP in the hospital setting. These always be preventable.
secretions as well as aspiration. guidelines include interventions such as While we are seeking public
During the past year, the ICD–9–CM educating staff, hand washing, using comments on the applicability of each
Coordination and Maintenance gowns and gloves, properly positioning of the statutory criteria to VAP, we are
Committee discussed the creation of a the patient, elevating the head of the particularly interested in receiving
new ICD–9–CM code 997.31 to identify bed, changing ventilator tubing, comment on the degree to which VAP
VAP. This new code is shown in Table sterilizing reusable equipment, applying
6A of the Addendum to this proposed chlorhexadine solution for oral 7 American Association for Respiratory Care
rule. The lack of a specific code was one decontamination, monitoring sedation Clinical Practice: Guideline: Care of the Ventilator
of the barriers to including VAP as an daily, administering stress ulcer Circuit and Its Relation to Ventilator Associated
HAC that we discussed in the FY 2008 prophylaxis, and administering Pneumonia. Available at the Web site: http://
www.rcjournal.com/cpgs/09.03.0869.html.
IPPS final rule with comment period. pneumococcal vaccinations. Further 8 Ramirez et al.: Prevention Measures for
We also discussed the degree to which review of the literature, specifically
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Association for Respiratory Care’s preventable. A second study concluded Care, June 2005, Vol. 50, No. 6, pp.725–741.
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is reasonably preventable through the comments we receive, we may select g. Deep Vein Thrombosis (DVT)/
application of evidence-based VAP as an HAC. Pulmonary Embolism (PE)
guidelines. Based on the public
We discussed deep vein thrombosis swelling may develop some time after likelihood of developing DVTs and PEs,
(DVT) and pulmonary embolism (PE) in the venous clot forms. including exercise, compression
the FY 2008 IPPS final rule with As we discussed in the FY 2008 IPPS stockings, intermittent pneumatic boots,
comment period (72 FR 47215). DVT final rule with comment period, DVTs aspirin, enoxaparin, dalteparin, heparin,
and PE are common events. DVT occurs and PEs may be preventable in certain coumadin, clopidogrel, and
when a blood clot forms in the deep circumstances, but it is possible that a fondaparinux. However, the
veins of the leg and causes local patient may have a DVT that is difficult evidenceπbased guidelines indicate that
swelling and inflammation. PE occurs to detect on admission. We also some patients may still develop clots
received comments during the despite these therapies.
when a clot or a piece of a clot migrates
December 17, 2007 HAC and POA While we are seeking public
from its original site into the lungs,
Listening Session reiterating that not all comments on the applicability of each
causing the death of lung tissue, which cases of DVTs and PEs are preventable.
can be fatal. Risk factors for DVTs and of the statutory criteria to DVTs and
For example, common patient PEs, we are particularly interested in
PEs include inactivity, smoking, use of characteristics such as immobility,
oral contraceptives, prolonged bed rest, receiving comments on the degree of
obesity, severe vessel trauma, and preventability of DVTs and PEs. We are
prolonged sitting with bent knees, venous stasis put certain trauma and
certain types of cancer and other disease also interested in comments on
joint replacement surgery patients at determining the presence of DVT and
states, certain blood clotting disorders, high risk for these conditions.
and certain types of orthopedic and PE at admission. Based on the public
In our review of the literature, we
other surgical procedures. DVT is not comments we receive, we may select
found that there are definite
DVTs and PEs as HACs.
always clinically apparent because the pharmacologic and nonpharmacologic
manifestations of pain, redness, and interventions that may reduce the h. Staphylococcus aureus Septicemia
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We discuss Staphylococcus aureus history of an invasive medical and fastidious hand washing by both
Septicemia in the FY 2008 IPPS final procedure. staff and visitors, using gloves and
rule with comment period (72 FR CDC has developed evidence-based gowns where appropriate, applying
47208). Staphylococcus aureus is a guidelines for the prevention of the proper decontamination techniques, and
bacterium that lives in the nose and on Staphylococcus aureus Septicemia. exercising contact isolation where
the skin of a large percentage of the Most preventable cases of septicemia are clinically indicated.
population. It usually does not cause primarily related to the presence of a While we are seeking public
physical illness, but it can cause central venous or vascular catheter. comments on the applicability of each
infections ranging from superficial boils During the December 17, 2007 HAC and of the statutory criteria to
to cellulitis to pneumonia to life POA Listening Session, commenters Staphylococcus aureus infections
threatening bloodstream infections noted that intravascular catheter- generally, we are particularly interested
(septicemia). It usually enters the body associated infections are only one cause in receiving comments on the degree of
through traumatized tissue, such as cuts of septicemia. Therefore, catheter- preventability of Staphylococcus aureus
or abrasions, or at the time of invasive oriented evidence-based guidelines infections generally, and specifically
procedures. Staphylococcus aureus would not cover all cases of Staphylococcus aureus Septicemia.
Septicemia can also be a late effect of an Staphylococcus aureus Septicemia.10 Based on the public comments we
injury or a surgical procedure. Risk We identified evidence-based receive, we may select Staphylococcus
factors for developing Staphylococcus guidelines that suggest Staphylococcus aureus Septicemia as an HAC.
aureus Septicemia include advanced aureus Septicemia is reasonably
age, debilitated state, preventable. These guidelines i. Clostridium Difficile-Associated
immunocompromised status, and a emphasize the importance of effective Disease (CDAD)
We discussed Clostridium difficile- surgery, prolonged nasogastric tube The evidence-based guidelines for
associated disease (CDAD) in the FY insertion, and repeated enemas. CDAD CDAD prevention emphasize that hand
2008 IPPS final rule with comment can be acquired in the hospital or in the washing by staff and visitors and
period. Clostridium difficile is a community. Its spores can live outside effective decontamination of
bacterium that colonizes the of the body for months and thus can be environmental surfaces prevent the
gastrointestinal (GI) tract of a certain spread to other patients in the absence spread of Clostridium difficile. While
number of healthy people. Under of meticulous hand washing by care we are seeking public comments on the
conditions where the normal flora of the providers and others who contact the applicability of each of the statutory
gastrointestinal tract is altered, infected patient. criteria to CDADs, we are particularly
Clostridium difficile can flourish and interested in receiving comments on the
We continue to receive strong support
release large enough amounts of a toxin degree of preventability of CDAD. Based
in favor of selecting CDAD as an HAC.
to cause severe diarrhea or even life on the public comments we receive, we
During the December 17, 2007 HAC and
threatening colitis. Risk factors for may select CDAD as an HAC.
POA Listening Session, representatives
CDAD include prolonged use of broad of consumers and purchasers advocated j. Methicillin-Resistant Staphylococcus
spectrum antibiotics, gastrointestinal to include CDAD as an HAC. aureus (MRSA)
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We discussed the special case of In addition, in last year’s final rule with implementation, management, and
methicillin-resistant Staphylococcus comment period, we noted that there is evaluation practices that mitigate such
aureus (MRSA) in the FY 2008 IPPS no CC/MCC code available for MRSA, infections.
final rule with comment period (72 FR and therefore it also does not meet the CDC has carried out extensive
47212). In October 2007, the CDC codeable CC/MCC statutory criterion for research on the epidemiology of MRSA
published in the Journal of the an HAC. Only when MRSA causes an and effective techniques that could be
American Medical Association an infection does a codeable condition used to treat the infection and reduce its
article citing high mortality rates from occur. However, we referenced the spread. The following Web sites contain
MRSA, an antibiotic-resistant possibility that new codes for MRSA information that reflect CDC’s
‘‘superbug.’’ The article estimates were being considered by the ICD–9– commitment: (1) http://www.cdc.gov/
19,000 people died from MRSA CM Coordination and Maintenance ncidod/dhqp/ar_mrsa.html (health care-
infections in the United States in 2005. Committee. The creation of unique associated MRSA); (2) http://
The majority of invasive MRSA cases codes to capture MRSA was discussed www.cdc.gov/ncidod/dhqp/
are health care-related—contracted in during the March 19–20, 2008 ar_mrsa_ca_public.html (community-
hospitals or nursing homes—though Committee meeting. While these codes acquired MRSA); (3) http://
community-acquired MRSA also poses a will enhance the data available and our www.cdc.gov/mmwr/preview/
significant public health concern. understanding of MRSA, the availability mmwrhtml/mm4908a1.htm; and (4)
Hospitals have been focused for years and use of these codes will not change http://www.cdc.gov/handhygiene/.
on controlling MRSA through the the fact that the mere presence of MRSA AHRQ has made previous
application of CDC’s evidence-based as a colonizing bacterium does not investments in systems research to help
guidelines outlining best practices for constitute an HAC. monitor MRSA and related infections in
combating the bacterium in that setting. Because MRSA as a bacterium does hospital settings, as reflected in material
MRSA is currently addressed by the not meet two of our statutory criteria, on the Web site at: http://
HAC payment provision. For every codeable CC/MCC and reasonably www.guideline.gov/browse/
infectious condition selected, MRSA preventable through evidence-based guideline_index.aspx and http://
could be the etiology of that infection. guidelines, we are not proposing MRSA www.ahrq.gov/clinic/ptsafety/pdf/
For example, if MRSA were the cause of as an HAC. However, we recognize the ptsafety.pdf.
a vascular catheter-associated infection significant public health concerns that
8. Present on Admission (POA)
(one of the eight conditions selected in were raised by representatives of
Indicator Reporting
the FY 2008 IPPS final rule with consumers and purchasers at the HAC
comment period), the HAC payment and POA Listening Session, and we are POA indicator information is
provision would apply to that MRSA committed to reducing the spread of necessary to identify which conditions
infection. multi-drug resistant organisms, such as were acquired during hospitalization for
As we noted in the FY 2008 IPPS final MRSA. the HAC payment provision and for
rule with comment period, colonization In addition, we are pursuing broader public health uses of Medicare
by MRSA is not a reasonably collaborative efforts with other HHS data. Through Change Request No. 5679
preventable HAC according to the agencies to combat MRSA. The Agency (released June 20, 2007), CMS issued
current evidence-based guidelines; for Healthcare Research and Quality instructions requiring IPPS hospitals to
therefore, MRSA does not meet the (AHRQ) has launched a new initiative submit the POA indicator data for all
reasonably preventable statutory in collaboration with CDC and CMS to diagnosis codes on Medicare claims.
criterion for an HAC. An estimated 32.4 identify and suppress the spread of Specific instructions on how to select
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percent of Americans are colonized with MRSA and related infections. In support the correct POA indicator for each
MRSA, which may reside in the nose or of this work, Congress has appropriated diagnosis code are included in the ICD–
on the skin of asymptomatic carriers.11 $5 million to fund research, 9–CM Official Guidelines for Coding
and Reporting, available at the Web site:
11 Kuehnert, M.J., et al.: Prevalence of United States, 2001-2002. The Journal of Infectious http://www.cdc.gov/nchs/datawh/
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23560 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
reporting guidelines begin on page 92). occurrence of HACs in the Medicare proposing to not pay the CC/MCC MS–
Additional instructions, including population. We anticipate that true DRGs for HACs coded with the ‘‘U’’
information regarding CMS’s phased clinical uncertainty will occur in only a indicator. The ‘‘U’’ option indicates that
implementation of POA indicator very small number of cases. We plan to the medical record documentation is
reporting and application of the POA analyze how frequently the ‘‘W’’ insufficient to determine whether the
reporting options, are available at the indicator is used, and we leave open the condition was present at the time of
Web site: http://www.cms.hhs.gov/ possibility of proposing in future IPPS admission. Not paying for the CC/MCC
HospitalAcqCond. rulemaking not paying the CC/MCC MS–DRGs for HACs that are coded with
There are five POA indicator MS–DRGs for HACs coded with the the ‘‘U’’ indicator is expected to foster
reporting options: ‘‘Y,’’ ‘‘N,’’ ‘‘W,’’ ‘‘U,’’ ‘‘W’’ indicator. In addition, we plan to better medical record documentation.
and ‘‘1.’’ Under the HAC payment analyze whether both the ‘‘Y’’ and ‘‘W’’ Although we are proposing not paying
provision, we are proposing to pay the indicators are being used appropriately. the CC/MCC MS–DRG for HACs coded
CC/MCC MS–DRGs only for those HACs Medicare program integrity initiatives with the ‘‘U’’ indicator, we do recognize
coded as ‘‘Y’’ and ‘‘W’’ indicators. The closely monitor for inaccurate coding there may be some exceptional
‘‘Y’’ option indicates that the condition and coding that is inconsistent with circumstances under which payment
was present on admission. The ‘‘W’’ medical record documentation. We are might be made. Death, elopement
indicator affirms that the provider has seeking public comments regarding the (leaving against medical advice), and
determined, based on data and clinical proposed treatment of the ‘‘Y’’ and ‘‘W’’ transfers out of a hospital may preclude
judgment, that it is not possible to POA reporting options under the HAC making an informed determination of
document when the onset of the payment provision. whether an HAC was present on
condition occurred. We expect that this We are proposing to not pay the CC/ admission. We are seeking public
approach will encourage better MMC MS–DRGs for HACs coded with comments on the potential use of the
documentation and promote the public the ‘‘N’’ indicator. The ‘‘N’’ option following current patient discharge
health goals of POA reporting by indicates that the condition was not status codes to identify the exceptional
providing more accurate data about the present on admission. We are also circumstances:
20 ............................... Expired.
We plan to analyze whether both the seeking public comments regarding the being a passive payer of claims to an
‘‘N’’ and ‘‘U’’ POA reporting options are proposal to not pay the CC/MCC MS– active purchaser of higher quality, more
being used appropriately. The American DRGs for HACs coded with ‘‘N’’ and efficient health care for Medicare
Health Information Management ‘‘U’’ indicators. beneficiaries. Other VBP initiatives
Association (AHIMA) has promulgated 9. Enhancement and Future Issues include hospital pay for reporting (the
Standards of Ethical Coding that require RHQDAPU program discussed in
accurate coding regardless of the The preventable HAC payment section IV.B. of the preamble of this
payment implications of the diagnoses. provision is one of CMS’ VBP proposed rule), physician pay for
jlentini on PROD1PC65 with PROPOSALS2
That is, diagnoses must be reported initiatives, as noted earlier in this reporting (the Physician Quality
accurately regardless of their effect on section. VBP ties payment to Reporting Initiative), home health pay
payment. Medicare program integrity performance through the use of for reporting, the Hospital VBP Plan
initiatives closely monitor for inaccurate incentives based on quality measures Report to Congress (discussed in section
coding and coding inconsistent with and cost of care. The implementation of IV.C. of the preamble of this proposed
medical record documentation. We are VBP is rapidly transforming CMS from rule), and various VBP demonstration
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programs across payment settings, payment for the complication could would give hospitals an additional,
including the Premier Hospital Quality range from zero for the lowest risk nonfinancial incentive to prevent
Incentive Demonstration and the patient to the full amount for the highest occurrence of the conditions to avoid
Physician Group Practice risk patient. An option may be lower public ratings.
Demonstration. individualized adjustment for every
c. Use of POA Information
The success of CMS’ VBP initiatives hospitalization based on the patient’s
depends in large part on the validity of unique characteristics, but state-of-the- Information obtained from hospitals’
the performance measures and on the art risk adjustment currently precludes reporting of POA data could be used in
effectiveness of incentives in driving such individualized adjustment. various ways to better understand and
desired changes in behavior that will prevent the occurrence of HACs. The
b. Rates of HACs POA information could be provided to
result in greater quality and efficiency.
We are committed to enhancing the Given our limited capability at health services researchers to analyze
Medicare VBP programs, in close present for precise patient-level risk factors that lead to HACs and
collaboration with stakeholders, to adjustment, adding a consideration of disseminate the best practices for
fulfill VBP’s potential to promise of risk to the criteria for selecting HACs prevention of HACs. At least two states,
promoting higher value health care for could be an alternative. If primarily New York and California, already
Medicare beneficiaries. It is in this spirit high-risk patients are acquiring a certain collect POA data from their hospitals.
that we seek public comment on condition during hospitalization, that Comparison of the State POA data with
enhancements to the preventable HACs condition could be considered a less-fit the Medicare data could fill in gaps in
payment policy and to concomitant candidate for selection. Other the databases and yield valuable
POA indicator reporting. alternatives to precise individualized insights about POA data validity.
We welcome all public comments risk adjustment could be adjustment for POA data could also be used to
presenting ideas and models for overall facility case mix or facility case- calculate the incidence of HACs by
combating preventable HACs through mix by condition. At the highest level, hospital. This application of the POA
the application of VBP principles. To national Medicare program data could data would be particularly powerful if
stimulate reflection and creativity, we be used to make adjustments to the the Medicare POA data were combined
present several options: payment implications for the selected with state or private sector payer POA
• Risk adjustment could be applied to HACs based on expected rates of data. The Medicare-only or combined
make the HAC payment provision more complications. Another option could be quality of care information could be
precise. to designate certain patient risk factors initially shared with hospitals and
• Rates of HACs could be collected to as exemptions that would prohibit or thereafter publicly reported to support
obtain a more robust longitudinal mitigate the application of the HAC better healthcare decision making by
measure of a hospital’s incidence of payment policy to the claims of patients Medicare beneficiaries, other health care
these conditions. with those risk factors. consumers, professionals, and
• POA information could be used in The Medicare Hospital VBP Plan was caregivers.
various ways to decrease the incidence submitted in a Report to Congress on
November 21, 2007. The plan includes d. Transition to ICD–10–PCS
of preventable HACs.
• The adoption of ICD–10–PCS could a performance assessment model that Accurate identification of HACs
facilitate more precise identification of scores a hospital’s attainment or requires unambiguous and precise
HACs. improvement on various measures. The diagnosis codes. The current ICD–9–CM
• The principle behind the HAC scores for each measure would be diagnosis coding system is three
payment provision (Medicare not summed within each domain, such as decades old. It is outdated and contains
paying more for preventable HACs) the clinical process of care domain or numerous instances of broad and vague
could be applied to Medicare payments the patient experience domain, and then codes. Attempts to add necessary detail
in settings of care other than the IPPS. the domains would be weighted and to the ICD–9–CM system are inhibited
• CMS is using authority other than summed to yield a total performance by lack of expansion capacity. These
the HAC payment provision to address score. The total performance score factors negatively affect CMS’ attempts
other events on the NQF’s list of Serious would then be translated into an to identify HAC cases.
Reportable Adverse Events. incentive payment, proposed to be a ICD–10–PCS codes are more precise
We note that we are not proposing certain percentage of each MS–DRG and capture information using more
new Medicare policy in this payment, using an exchange function. current medical terminology. For
Enhancements and Future Issues The plan also calls for public reporting example, ICD–9–CM codes for pressure
discussion, as some of these approaches of hospitals’ performance scores by ulcers do not provide information about
may require new statutory authority. domain and in total. (Section IV.C. of the size, depth, or exact location of the
this preamble included a related ulcer, while ICD–10–PCS has 60 codes
a. Risk Adjustment discussion of the Hospital VBP Plan to capture this information. ICD–10–
To make the HAC payment provision Report to Congress.) PCS would also provide codes, beyond
more precise, the adjustments to In accordance with this hospital VBP the current ICD–9–CM codes, that
payment made when one of the selected model, a hospital’s rates of HACs could would enable the selection of additional
HACs occurs during the hospitalization be included as a domain within each surgical complications and adverse drug
could be further adjusted to account for hospital’s total performance score. The events.
patient-specific risk factors. The measurement of rates over time could be
expected occurrence of an HAC may be a more meaningful, actionable, and fair e. Application of Nonpayment for HACs
jlentini on PROD1PC65 with PROPOSALS2
greater or lesser depending on the way to adjust a hospital’s MS–DRG to Other Settings
health status of the patient, as reflected payments for the incidence of HACs. The broad principle of Medicare not
by severity of illness, presence of The consequence of a higher incidence paying for preventable health care-
comorbidities, or other factors. Rather of measured conditions would be a associated conditions could potentially
than not paying any additional amount lower VBP incentive payment. Public be applied to Medicare payment settings
for the complication, the additional reporting of the measured rates of HACs other than IPPS hospitals. Other
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23562 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
possible settings of care might include pressure ulcers, falls, electric shock, and ventricles of a failing heart on either a
hospital outpatient departments, SNFs, burns. In this proposed rule, we are temporary or permanent basis. When it
HHAs, end-stage renal disease facilities, seeking public comments regarding is apparent that a patient will require
and physician practices. The adding hypoglycemic coma, which is long-term support, a ventricular support
implications would be different for each closely related to NQF’s listing of death device is generally implanted and may
setting, as each payment system is or serious disability associated with be considered either as a bridge to
different and the reasonable hypoglycemia. However, as we recovery or a bridge to transplantation.
preventability through the application discussed in the FY 2008 IPPS final rule Sometimes a patient’s prognosis is
of evidence-based guidelines would with comment period, the HAC uncertain, and with device support the
vary for candidate conditions over the payment provision is not ideally suited native heart may recover its function.
different settings. However, alignment to address every condition on the NQF’s However when recovery is not likely,
of incentives across settings of care is an list of Serious Reportable Adverse the patient may qualify as a transplant
important goal for all of CMS’ VBP Events. To address the events on the candidate and require mechanical
initiatives, including the HAC NQF’s list beyond the effect of the HAC circulatory support until a donor heart
provision. policy, CMS is exploring the application becomes available. This type of support
A related application of the broad of Medicare authority, including other is commonly supplied by ventricular
principle behind the HAC payment payment provisions, coverage policy, assist devices, (VADs), which are
could be accomplished through conditions of participation, and Quality surgically attached to the native
modification to the Medicare secondary Improvement Organization (QIO) ventricles but do not replace them.
payer policy which would allow us to retrospective review. Devices commonly called artificial
directly recoup from the provider that We note that we are not proposing hearts are biventricular heart
failed to prevent the occurrence of a new Medicare policy in this discussion replacement systems that differ from
preventable condition in one setting to of the HAC payment provision for IPPS VADs in that a substantial part of the
pay for all or part of the necessary hospitals, as some of these approaches native heart, including both ventricles,
followup care in a second setting. This may require new statutory authority. We is removed. When the heart remains
would help shield the Medicare are seeking public comments on these intact, it remains possible for the native
program from inappropriately paying for and other options for enhancing the heart to recover its function after being
the downstream effects of a preventable preventable HACs payment provision assisted by a VAD. However, because
condition acquired in the first setting and maximizing the use of POA the artificial heart device requires the
but treated in the second setting. indicator reporting data. We look resection of the ventricles, the native
forward to working with stakeholders in heart is no longer intact and such
f. Relationship to NQF’s Serious
the fight against HACs. recovery is not possible. The
Reportable Adverse Events
designation ‘‘artificial heart’’ is
CMS is applying its authority to G. Proposed Changes to Specific MS– somewhat of a misnomer because some
address the events on the NQF’s list of DRG Classifications portion of the native heart remains and
Serious Reportable Adverse Events (also there is no current mechanical device
1. Pre-MDCs: Artificial Heart Devices
known as ‘‘never events’’). In May 2006 that fully replaces all four chambers of
testimony before the Senate Finance Heart failure affects more than 5 the heart. Over time, better descriptive
Committee, the CMS Administrator million patients in the United States language for these devices may be
noted that paying hospitals for serious with 550,000 new cases each year, and adopted.
preventable events is contrary to the causes more than 55,000 deaths In 1986, CMS made a determination
promise that hospital payments should annually. It is a progressive disease that that the use of artificial hearts was not
support higher quality and efficiency. is medically managed at all stages, but covered under the Medicare program.
There is growing consensus that health over time leads to continued To conform to that decision, we placed
care purchasers should not be paying for deterioration of the heart’s ability to ICD–9–CM procedure code 37.52
these events when they occur during a pump sufficient amounts of adequately (Implantation of total replacement heart
hospitalization. In January 2005, oxygenated blood throughout the body. system) on the GROUPER program’s
HealthPartners, a Minnesota-based not- When medical management becomes MCE in the noncovered procedure list.
for-profit HMO, announced that it inadequate to continue to support the On August 1, 2007, CMS began a
would no longer reimburse hospitals for patient, the patient’s heart failure would national coverage determination process
services associated with events be considered to be the end stage of the for artificial hearts. SynCardia Systems,
enumerated in the Minnesota Adverse disease. At this point, the only Inc. submitted a request for
Health Care Events Reporting Act remaining treatment options are a heart reconsideration of the longstanding
(essentially the NQF’s list of Serious transplant or mechanical circulatory noncoverage policy when its device, the
Reportable Adverse Events). Further, support. A device termed an artificial CardioWest Temporary Total Artificial
HealthPartners’ contracts preclude heart has been used only for severe Heart (TAH–t) System, is used for
hospitals from seeking reimbursement failure of both the right and left ‘‘bridge to transplantation’’ in
from the patient for these costs. During ventricles, also known as biventricular accordance with the FDA-labeled
2007, several State hospital associations failure. Relatively small numbers of indication for the device. ‘‘Bridge to
adopted policies stating that their patients suffer from biventricular transplantation’’ is a phrase meaning
members will not bill payers or patients failure, but the exact numbers are that a patient in end-stage heart failure
when these events occur in their unknown. There are about 4,000 may qualify as a heart transplant
hospitals. patients approved and waiting to candidate, but will require mechanical
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In the FY 2008 IPPS final rule with receive heart transplants in the United circulatory support until a donor heart
comment period, we adopted several States at any given time, but only about becomes available. The CardioWest
items from the NQF’s list of events as 2,000 hearts per year are transplanted TAH–t System is indicated for use as a
HACs, including retained foreign object due to a scarcity of donated organs. bridge to transplantation in cardiac
after surgery, air embolism, blood There are a number of mechanical transplant-eligible candidates at risk of
incompatibility, stage III and IV devices that may be used to support the imminent death from biventricular
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failure. The system is intended for use Committee accepted oral comments Version 26.0 of the GROUPER uses
inside the hospital as the patient awaits from participants and encouraged Version 25.0 of the MCE.)
a donor heart. The ultimate desired attendees or anyone with an interest in
2. MDC 1 (Diseases and Disorders of the
outcome for insertion of the TAH–t is a the topic to comment on proposed
Nervous System)
successful heart transplant, along with changes to the code, inclusion terms, or
the potential that offers for cure from exclusion terms. We accepted written a. Transferred Stroke Patients Receiving
heart failure. comments until October 12, 2007. As a Tissue Plasminogen Activator (tPA)
CMS determined that a broader result of discussion and comment from In 1996, the FDA approved the use of
analysis of artificial heart coverage was the Committee meeting, the Committee tissue plasminogen activator (tPA), one
deemed appropriate, as another revised the title of procedure code 37.52 type of thrombolytic agent that dissolves
manufacturer, Abiomed, Inc. has for artificial hearts to read blood clots. In 1998, the ICD–9–CM
developed an artificial heart device, ‘‘Implantation of internal biventricular Coordination and Maintenance
AbioCor Implantable Replacement heart replacement system.’’ In addition, Committee created code 99.10 (Injection
Heart Device, with different indications. the Committee created new code 37.55 or infusion of thrombolytic agent) in
SynCardia Systems, Inc has received (Removal of internal biventricular heart order to be able to uniquely identify the
approval of its device from the FDA for replacement system) to identify administration of these agents. Studies
humanitarian use as destination therapy explantation of the artificial heart prior have shown that tPA can be effective in
for patients in end-stage biventricular to heart transplantation. reducing the amount of damage the
failure who cannot qualify as transplant To make conforming changes to the brain sustains during an ischemic
candidates. The AbioCor Implantable IPPS system with regard to the proposed stroke, which is caused by blood clots
Replacement Heart Device is indicated revision to the coverage decision for that block blood flow to the brain. tPA
for use in severe biventricular end-stage artificial hearts, in this proposed rule, is approved for patients who have blood
heart disease patients who are not we are proposing to remove procedure
cardiac transplant candidates and who clots in the brain, but not for patients
code 37.52 from MS–DRG 215 (Other who have a bleeding or hemorrhagic
are less than 75 years old, who require Heart Assist System Implant) and assign
multiple inotropic support, who are not stroke. Thrombolytic therapy has been
it to MS–DRG 001 (Heart Transplant or shown to be most effective when used
treatable by VAD destination therapy, Implant of Heart Assist System with
and who cannot be weaned from within the first 3 hours after the onset
Major Comorbidity or Complication of an embolic stroke, but it is
biventricular support if they are on such (MCC)) and MS–DRG 002 (Heart
support. The desired outcome for this contraindicated in hemorrhagic strokes.
Transplant or Implant of Heart Assist For FY 2006, we modified the
device is prolongation of life and
System without Major Comorbidity or structure of CMS DRGs 14 (Intracranial
discharge to home.
On February 1, 2008, CMS published Complication (MCC)). In addition, we Hemorrhage or Cerebral Infarction) and
a proposed coverage decision are proposing to remove procedure code 15 (Nonspecific CVA and Precerebral
memorandum for artificial hearts which 37.52 from the MCE ‘‘Non-Covered Occlusion without Infarction) by
stated, in part, that while the evidence Procedure’’ edit and assign it to the removing the diagnostic ischemic
is inadequate to conclude that the use ‘‘Limited Coverage’’ edit. We are (embolic) stroke codes. We created a
of an artificial heart is reasonable and proposing to include in this proposed new CMS DRG 559 (Acute Ischemic
necessary for Medicare beneficiaries, the edit the requirement that ICD–9–CM Stroke with Use of Thrombolytic Agent)
evidence is promising for the uses of diagnosis code V70.7 (Examination of which increased reimbursement for
artificial heart devices as described participant in clinical trial) also be patients who sustained an ischemic or
above. CMS supports additional present on the claim. We are proposing embolic stroke and who also had
research for these devices, and therefore that claims submitted without both administration of tPA. The intent of this
proposed that the artificial heart will be procedure code 37.52 and diagnosis DRG was not to award higher payment
covered by Medicare when performed code V70.7 would be denied because for a specific drug but to recognize the
under the auspices of a clinical study. they would not be in compliance with need for better overall care for this
The study must meet all of the criteria the proposed coverage policy. group of patients. Even though tPA is
listed in the proposed decision During FY 2008, we are making mid- indicated only for a small proportion of
memorandum. This proposed coverage year changes to portions of the stroke patients, that is, those patients
decision memorandum may be found on GROUPER program that do not affect experiencing ischemic strokes treated
the CMS Web site at: http:// MS–DRG assignment or ICD–9–CM within 3 hours of the onset of
www.cms.hhs.gov/mcd/ coding. However, as the proposed symptoms, our data suggested that there
viewdraftdecisionmemo.asp?id=211. coverage decision memorandum for was a sufficient quantity of patients to
Following consideration of the public artificial hearts was published after the support the DRG change. While our goal
comments received, CMS expects to CMS contractor’s testing and release of is to make payment relate more closely
make a final decision on or about May the mid-year product, the above to resource use, we also note that use of
1, 2008. proposed changes to the MCE will not tPA in a carefully selected patient
The topic of coding of artificial heart be included in that revision of the population may lead to better outcomes
devices was discussed at the September GROUPER Version 25.0. GROUPER and overall care and may lessen the
27–28, 2007 ICD–9–CM Coordination Version 26.0, which will be in use for need for postacute care.
and Maintenance Committee meeting FY 2009, will contain the proposed For FY 2008, with the adoption of
held at CMS in Baltimore, MD. We note changes if they are approved. If the MS–DRGs, CMS DRG 559 became MS–
that this topic was placed on the proposed revisions to the MCE are DRGs 061 (Acute Ischemic Stroke with
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Committee’s agenda because any accepted, the edits in the MCE Version Use of Thrombolytic Agent with MCC),
proposed changes to the ICD–9–CM 25.0 will be effective retroactive to May 062 (Acute Ischemic Stroke with Use of
coding system must be discussed at a 1, 2008. (To reduce confusion, we note Thrombolytic Agent with CC), and 063
Committee meeting, with opportunity that the version number of the MCE is (Acute Ischemic Stroke with Use of
for comment from the public. At the one digit lower than the current Thrombolytic Agent without CC/MCC).
September 2007 Committee meeting, the GROUPER version number; that is, Stroke cases in which no thrombolytic
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23564 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
agent was administered were grouped to recognize the fact that the patient had patients being evaluated by specialized
MS–DRGs 064 (Intracranial Hemorrhage received a thrombolytic agent for epilepsy centers. Alternatively, the
or Cerebral Infarction with MCC), 065 treatment of the current stroke. If this representative stated that he was not
(Intracranial Hemorrhage or Cerebral request is presented at the March 20, requesting any change in the structure
Infarction with CC), or 066 (Intracranial 2008 meeting, it will not be approved in of MS–DRG 100. According to the
Hemorrhage or Cerebral Infarction time to be published as a final code in representative, the number of cases that
without CC/MCC). The MS–DRGs that this proposed rule. However, if a would fall into this category is not
reflect use of a thrombolytic agent, that diagnosis code is created by the significant. The representative further
is, MS–DRGs 061, 062, and 063, have National Centers for Health Statistics as noted that this is a change from last
higher relative weights than the a result of that meeting, it can be added year’s request.
hemorrhagic or cerebral infarction MS– to the list of codes published in the FY Epilepsy is currently identified by
DRGs 064, 065, and 066. 2009 IPPS final rule that will go into ICD–9–CM diagnosis codes 345.0x
The American Society of effect on October 1, 2008. With such through 345.9x. There are two fifth
Interventional and Therapeutic information appearing on subsequent digits that may be assigned to a subset
Neuroradiology (ASITN) has made us claims, we will have a better idea of of the epilepsy codes depending on the
aware of a treatment issue that is of how to classify these cases within the physician documentation:
concern to the stroke provider’s MS–DRGs. Therefore, because we lack • ‘‘0’’ for without mention of
community. In some instances, patients the data to identify these patients, we intractable epilepsy.
suffering an embolytic or thrombolytic are not proposing an MS–DRG • ‘‘1’’ for with intractable epilepsy.
stroke are evaluated and given tPA in a modification for the stroke patients With the assistance of an outside
community hospital’s emergency receiving tPA in one facility prior to reviewer, the representative analyzed
department, and then are transferred to being transferred to another facility. cost data for MS–DRGs 100 and 101,
a larger facility’s stroke center that is which focused on three subsets of
b. Intractable Epilepsy With Video
able to provide the level of services patients identified with a primary
Electroencephalogram (EEG)
required by the increased severity of diagnosis of epilepsy or convulsions
these cases. The facility providing the As we did for FY 2008, we received who also received vEEG (procedure
administration of tPA in its emergency a request from an individual code 89.19):
department does not realize increased representing the National Association of • Patients with a primary diagnosis of
reimbursement, as the patient is often Epilepsy Centers to consider further epilepsy with intractability specified
transferred as soon a possible to a stroke refinements to the MS–DRGs describing (codes 345.01 through 345.91).
center. The facility to which the patient seizures. Specifically, the representative • Patients with a primary diagnosis of
is transferred does not realize increased recommended that a new MS–DRG be epilepsy without intractability specified
reimbursement, as the tPA was not established for patients with intractable (codes 345.00 through 345.90).
administered there. The ASITN has epilepsy who receive an • Patients with a primary diagnosis of
requested that CMS give permission to electroencephalogram with video convulsions (codes 780.39).
code the administration of tPA as if it monitoring (vEEG) during their hospital The representative acknowledged that
had been given in the receiving facility. stay. Similar to the initial the association did not include any
This would result in the receiving recommendation, the representative secondary diagnoses in its analyses.
facility being paid the higher weighted stated that patients who suffer from Based on its results, the representative
MS–DRGs 061, 062, or 063 instead of uncontrolled seizures or intractable recommended that CMS further refine
MS–DRGs 064, 065, or 066. The epilepsy are admitted to an epilepsy MS–DRG 101 by subdividing cases with
ASITN’s rationale is that the patients center for a comprehensive evaluation a primary diagnosis of intractable
who received tPA in another facility to identify the epilepsy seizure type, the epilepsy (codes 345.01 through 345.91)
(even though administration of tPA may cause of the seizure, and the location of when vEEG (code 89.19) is also
have alleviated some of the worst the seizure. These patients are admitted performed into a separate MS–DRG that
consequences of their strokes) are still to the hospital for 4 to 6 days with 24- would be defined as ‘‘MS–DRG XXX’’
extremely compromised and require hour monitoring that includes the use of (Epilepsy Evaluation without MCC).
increased health care services that are EEG video monitoring along with According to the representative, these
much more resource consumptive than cognitive testing and brain imaging cases are substantially more costly than
patients with less severe types of stroke. procedures. the other cases within MS–DRG 101 and
We have advised the ASITN that Effective October 1, 2007, MS–DRG are consistent with the criteria for
hospitals may not report services that 100 (Seizures with MCC) and MS–DRG dividing MS–DRGs on the basis of CCs
were not performed in their facility. 101 (Seizures without MCC) were and MCCs. In addition, the
We recognize that the ASITN’s implemented as a result of refinements representative stated that the request
concerns potentially have merit but the to the DRG system to better recognize would have a minimal impact on most
quantification of the increased resource severity of illness and resource hospitals but would substantially
consumption of these patients is not utilization. Once again, the improve the accuracy of payment to
currently possible in the existing ICD– representative applauded CMS for hospitals specializing in epilepsy care.
9–CM coding system. Without specific making changes in the DRG structure to We performed an analysis using FY
length of stay and average charges data, better recognize differences in patient 2007 MedPAR data. As shown in the
we are unable to determine an severity. However, the representative table below, we found a total of 54,060
appropriate MS–DRG for these cases. stated that a subset of patients in MS– cases in MS–DRG 101 with average
jlentini on PROD1PC65 with PROPOSALS2
Therefore, we have advised the ASITN DRG 101 who have a primary diagnosis charges of $14,508 and an average
to present a request at the diagnostic of intractable epilepsy and are treated length of stay of 3.69 days. There were
portion of the ICD–9–CM Coordination with vEEG are substantially more costly 879 cases with intractable epilepsy and
and Maintenance Committee meeting on to treat than other patients in this MS– vEEG with average charges of $19,227
March 20, 2008, for a code that would DRG and represent the majority of and an average length of stay of 5 days.
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In applying the criteria to establish CMS should consider additional describe the insertion or replacement of
subgroups, the data do not support the refinements for the defibrillator pacemaker leads.
creation of a new subdivision for MS– generator and leads. In reviewing the The requestor believed that the IPPS
DRG 101 for cases with intractable standardized charges for the AICD leads, ‘‘needs to continue to evolve to
epilepsy and vEEG nor does the data the commenter believed that the leads accurately reflect clinical differences
support moving the 879 cases from MS– may be more appropriately assigned to and costs of services.’’ As such, the
DRG 101 to MS–DRG 100. Moving the another DRG such as MS–DRG 243 requestor recommended that CMS
879 cases to MS–DRG 100 would mean (Permanent Cardiac Pacemaker Implant follow the same structure as it did with
moving cases with average charges of with CC) or MS–DRG 258 (Cardiac
the pacemaker MS–DRGs for MS–DRG
approximately $19,000 into an MS–DRG Pacemaker Device Replacement with
245 to separately identify the
with average charges of $28,000. MCC). The commenter recommended
implantation or replacement of the
Therefore, we are not proposing to that CMS consider moving the
defibrillator leads (codes 37.95, 37.97,
refine MS–DRG 101 by subdividing defibrillator leads back into a pacemaker
and 00.52) from the implantation or
cases with a primary diagnosis of DRG, either MS–DRG 243 or MS–DRG
intractable epilepsy (codes 345.01 258. replacement of the pulse generators
through 345.91) when vEEG (code In response to the commenters, we (codes 37.96, 37.98, 00.54).
89.19) is also performed into a separate indicated that the data supported In our analysis of the FY 2007
MS–DRG. separate DRGs for these very different MedPAR data, we found a total of 5,546
devices (72 FR 47257). We indicated cases in MS–DRG 245 with average
3. MDC 5 (Diseases and Disorders of the
that moving the defibrillator leads back charges of $62,631 and an average
Circulatory System)
into a pacemaker MS–DRG defeated the length of stay of 3.3 days. We found
a. Automatic Implantable Cardioverter- purpose of creating separate MS–DRGs 1,894 cases with implantation or
Defibrillators (AICD) Lead and for defibrillators and pacemakers. replacement of the defibrillator leads
Generator Procedures Therefore, we finalized MS–DRG 245 as (codes 37.95, 37.97, and 00.52) with
In the FY 2008 IPPS final rule with proposed with the leads and generator average charges of $42, 896 and an
comment period (72 FR 47257), we codes listed above. average length of stay of 3.4 days. We
created a separate, stand alone DRG for After publication of the FY 2008 IPPS also found a total of 3,652 cases with
automatic implantable cardioverter- final rule with comment period, we implantation or replacement of the
defibrillator (AICD) generator received a request from a manufacturer pulse generator (codes 37.96, 37.98,
replacements and defibrillator lead that recommended a subdivision for 00.54) with average charges of $72, 866
replacements. The new MS–DRG 245 MS–DRG 245 (AICD Lead and Generator and an average length of stay of 3.2
(AICD lead and generator procedures) Procedures). The requestor suggested days.
contains the following codes: creating a new MS–DRG to separate the
implantation or replacement of the We agree with the requestor that the
• 00.52, Implantation or replacement IPPS should accurately recognize
of transvenous lead [electrode] into left AICD leads from the implantation or
replacement of the AICD pulse differences in resource utilization for
ventricular coronary venous system. clinically distinct procedures. As the
• 00.54, Implantation or replacement generators to better recognize the
differences in resource utilization for data demonstrate, average charges for
of cardiac resynchronization
these distinct procedures. the implantation or replacement of the
defibrillator pulse generator device only
The requestor applauded CMS’ AICD pulse generators are significantly
[CRT–D].
• 37.95, Implantation of automatic decision to create separate MS–DRGs for higher than for the implantation or
cardioverter/defibrillator leads(s) only. the pacemaker device procedures from replacement of the AICD leads.
• 37.96, Implantation of automatic the AICD procedures in the FY 2008 Therefore, we are proposing to create a
cardioverter/defibrillator pulse IPPS final rule (72 FR 47257). The new MS–DRG 265 to separately identify
generator only. requestor further acknowledged its these distinct procedures. The proposed
• 37.97, Replacement of automatic support of the clinically distinct MS– new MS–DRG 265 would be titled
cardioverter/defibrillator leads(s) only. DRGs for pacemaker devices. Currently, ‘‘AICD Lead Procedures’’ and would
• 37.98, Replacement of automatic MS–DRGs 258 and 259 (Cardiac include procedure codes that identify
cardioverter/defibrillator pulse Pacemaker Device Replacement with the AICD leads (codes 37.95, 37.97 and
generator only. MCC and without MCC, respectively) 00.52). The title for MS–DRG 245 would
jlentini on PROD1PC65 with PROPOSALS2
Commenters on the FY 2008 IPPS describe the implantation or be revised to ‘‘AICD Generator
proposed rule supported this new MS– replacement of pacemaker generators Procedures’’ and include procedure
DRG, which recognizes the distinct while MS–DRGs 260, 261, and 262 codes 37.96, 37.98, 00.54. We believe
differences in resource utilization (Cardiac Pacemaker Revision Except these changes would better reflect the
between pacemaker and defibrillator Device Replacement with MCC, with clinical differences and resources
generators and leads, but suggested that CC, without CC/MCC, respectively) utilized for these distinct procedures.
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23566 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
b. Left Atrial Appendage Device We have reviewed the data $3,808 per case than the payment
concerning this procedure code average for MS–DRG 251.
Atrial fibrillation (AF) is the primary annually. Using FY 2005 MedPAR data The requestor pointed out that code
cardiac abnormality associated with for the FY 2007 IPPS final rule, 24 cases 37.90 is assigned to both MS–DRGs 250
ischemic or embolytic stroke. Most were reported, and the average charges and 251, but stated that the final MS–
ischemic strokes associated with AF are ($27,620) closely mimicked the average DRG assignment would be MS–DRG 251
possibly due to an embolism or charges of the other 22,479 cases in when the patient has a principal
thrombus that has formed in the left CMS DRG 518 ($28,444). As the charges diagnosis of atrial fibrillation (code
atrial appendage. Evidence from studies were comparable, we made no 427.31) because AF is not presently
such as transesophageal recommendations to change the CMS listed as a CC or an MCC. We would
echocardiography shows left atrial DRG assignment for FY 2007. take this opportunity to note that the
thrombi to be more frequent in AF Using FY 2006 MedPAR data for the principal diagnosis is used to determine
patients with ischemic stroke as FY 2008 final rule with comment assignment of a case to the correct MDC.
compared to AF patients without stroke. period, we divided CMS DRG 518 into Secondary or additional diagnosis codes
While anticoagulation medication can the cases that would be reflected in the are the only codes that can be used to
be efficient in ischemic stroke MS–DRG configuration; that is, we determine the presence of a CC or an
prevention, there can be problems of divided the cases based on the presence MCC.
safety and tolerability in many patients, or absence of an MCC. There were 35
With regard to the request to create a
especially those older than 75 years. cases without an MCC with average
specific DRG for the insertion of this
Chronic warfarin therapy has been charges of $24,436, again mimicking the
device entitled ‘‘Percutaneous
proven to reduce the risk of embolism 38,002 cases with average charges of
Cardiovascular Procedures with
but there can be difficulties concerning $32,546. There were 3 cases with MCC
Implantation of a Left Atrial Appendage
its administration. Frequent blood tests with average charges of $62,337,
Device without CC/MCC’’, we would
to monitor warfarin INR are required at compared to the 5,458 cases also with
point out that the payments under a
some cost and patient inconvenience. In an MCC with average charges of
prospective payment system are
addition, because warfarin INR is $53,864. Again it was deemed that cases
predicated on averages. The device is
affected by a large number of drug and with code 37.90 were comparable to the
rest of the cases in CMS DRG 518, and already assigned to MS–DRGs
dietary interactions, it can be containing other percutaneous
unpredictable in some patients and the decision was made not to make any
changes in the DRG assignment for this cardiovascular devices; to create a new
difficult to manage. The efficacy of MS–DRG specific to this device would
aspirin for stroke prevention in AF procedure code. As noted above, CMS
DRG 518 became MS–DRGs 250 and 251 be to remove all other percutaneously
patients is less clear and remains inserted devices and base the MS–DRG
controversial. With the known disutility in FY 2008.
We have received a request regarding assignment solely on the presence of
of warfarin and the questionable code 37.90. This approach negates our
code 37.90, and its placement within
effectiveness of aspirin, a device-based longstanding method of grouping like
the MS–DRG system for FY 2009. The
solution may provide added protection procedures, and removes the concept of
requestor asked for either the
against thromboembolism in certain averaging. Further, to ignore the
reassignment of code 37.90 to an MS–
patients with AF. structure of the MS–DRG system solely
DRG that would adequately cover the
At the April 1, 2004 ICD–9–CM costs associated with the complete for the purpose of increasing payment
Coordination and Maintenance procedure or the creation of a new MS– for one device would set an unwelcome
Committee meeting, a proposal was DRG that would reimburse hospitals precedent for defining all of the other
presented for the creation of a unique adequately for the cost of the device. MS–DRGs in the system. We would also
procedure code describing insertion of The requestor, a manufacturer’s point out that the final rule establishing
the left atrial appendage filter system. representative, reported that the the MS–DRGs set forth five criteria, all
Subsequently, ICD–9–CM code 37.90 device’s IDE clinical trial is nearing five of which are required to be met, in
(Insertion of left atrial appendage completion, with the conclusion of order to warrant creation of a CC or an
device) was created for use beginning study enrollment in May 2008. The MCC subgroup within a base MS–DRG.
October 1, 2004. This code was requestor will continue to enroll The criteria can be found in the FY 2008
designated as a non-operating room patients in a Continued Use Registry IPPS final rule with comment period (72
(non-O.R.) procedure, and had an effect following completion of the trial. The FR 47169). One of the criteria specifies
only on cases in MDC 5, CMS DRG 518 requestor reported that it did not charge that there will be at least 500 cases in
(Percutaneous Cardiovascular Procedure hospitals for the atrial appendage the CC or MCC subgroup. To date, there
without Coronary Artery Stent or Acute device, estimated to cost $6,000, during are not enough cases of code 37.90
Myocardial Infarction). With the the trial period, but it will begin to reported within the MedPAR data.
adoption of MS–DRGs in FY 2008, CMS charge hospitals upon the completion of Using FY 2007 MedPAR data, for this
DRG 518 was divided into MS–DRGs the trial in May. The requestor provided FY 2009 IPPS proposed rule, we
250 and 251 (Percutaneous us with its data showing what it reviewed MS–DRGs 250 and 251 for the
Cardiovascular Procedure without believed to be a differential of $107 presence of the left atrial appendage
Coronary Artery Stent or AMI with more per case than the payment average device. The following table displays our
MCC, and without MCC, respectively). for MS–DRG 250, and a shortfall of results:
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23567
There were a total of 105 cases with through 47224) before we discuss the receive claims data using the new
code 37.90 reported for Medicare AAHKS’s more recent request. procedure codes, we closely examine
beneficiaries in the 2007 MedPAR data. data from the use of the codes under the
a. Brief History of Development of Hip
There are 4 cases with an atrial two new CMS DRGs to determine if
and Knee Replacement Codes
appendage device in MS–DRG 250 that future additional DRG modifications are
have higher average charges than the In the FY 2006 IPPS final rule (70 FR needed.
other 6,420 cases in the MS–DRG, and 47303), we deleted CMS DRG 209
(Major Joint and Limb Reattachment b. Prior Recommendations of the
that have slightly shorter lengths of stay AAHKS
by 1.25 days. However, the more telling Procedures of Lower Extremity) and
data are located in MS–DRG 251, which created two new CMS DRGs: 544 (Major Prior to this year, the AAHKS had
shows that the 101 cases in which an Joint Replacement or Reattachment of recommended that we make further
atrial appendage device was implanted Lower Extremity) and 545 (Revision of refinements to the CMS DRGs for knee
have much lower average charges Hip or Knee Replacement). The two new and hip arthroplasty procedures. The
($20,846.09) than the other 39,355 cases CMS DRGs were created because AAHKS previously presented data to
in the MS–DRG, with average charges of revisions of joint replacement CMS on the important differences in
$35,758.98. The difference in the procedures are significantly more clinical characteristics and resource
average charges is approximately resource intensive than original hip and utilization between primary and
$14,912, so even when the manufacturer knee replacements procedures. CMS revision total joint arthroplasty
begins charging the hospitals the DRG 544 included the following procedures. The AAHKS stated that
estimated $6,000 for the device, there is procedure code assignments: CMS’s decision to create a separate DRG
still a difference of approximately • 81.51, Total hip replacement. for revision of total joint arthroplasty
$8,912 in average charges based on the • 81.52, Partial hip replacement. (TJA) in October 2005 resulted in more
comparison within the total MS–DRG • 81.54, Total knee replacement. equitable reimbursement for hospitals
251. Interestingly, the 101 cases also • 81.56, Total ankle replacement. that perform a disproportionate share of
have an average length of stay of less • 84.26, Foot reattachment. complex revision of TJA procedures,
than half of the average length of stay • 84.27, Lower leg or ankle recognizing the higher resource
compared to the other cases assigned to reattachment. utilization associated with these cases.
that MS–DRG. • 84.28, Thigh reattachment. The AAHKS stated that this important
CMS DRG 545 included the following payment policy change led to increased
Because the data do not support either procedure code assignments: access to care for patients with failed
the creation of a unique MS–DRG or the • 00.70, Revision of hip replacement, total joint arthroplasties, and ensured
assignment of procedure code 37.90 to both acetabular and femoral that high volume TJA centers could
another higher-weighted MS–DRG, we components. continue to provide a high standard of
are not proposing any change to MS– • 00.71, Revision of hip replacement, care for these challenging patients.
DRGs 250 and 251, or to code 37.90 for acetabular component. The AAHKS further stated that the
FY 2009. We believe, based on the past • 00.72, Revision of hip replacement, addition of new, more descriptive ICD–
3 year’s comparisons, that this code is femoral component. 9–CM diagnosis and procedure codes
appropriately located within the MS– • 00.73, Revision of hip replacement, for TJA in October 2005 gave it the
DRG structure. acetabular liner and/or femoral head opportunity to further analyze
4. MDC 8 (Diseases and Disorders of the only. differences in clinical characteristics
Musculoskeletal System and Connective • 00.80, Revision of knee replacement, and resource intensity among TJA
Tissue): Hip and Knee Replacements total (all components). patients and procedures. Inclusive of
and Revisions • 00.81, Revision of knee replacement, the preparatory work to submit its
tibial component. recommendations, the AAHKS
For FY 2009, we again received a • 00.82, Revision of knee replacement, compiled, analyzed, and reviewed
request from the American Association femoral component. detailed clinical and resource utilization
of Hip and Knee Surgeons (AAHKS), a • 00.83, Revision of knee replacement, data from over 6,000 primary and
specialty group within the American patellar component. revision TJA procedure codes from 4
Academy of Orthopedic Surgeons • 00.84, Revision of knee replacement, high volume joint arthroplasty centers
(AAOS), concerning modifications of tibial insert (liner). located within different geographic
the lower joint procedure MS–DRGs. • 81.53, Revision of hip replacement, regions of the United States: University
The request is similar, in some respects, not otherwise specified of California, San Francisco, CA; Mayo
to the AAHKS’s request in FY 2008, • 81.55, Revision of knee Clinic, Rochester, MN; Massachusetts
particularly as it relates to separating replacement, not otherwise specified General Hospital, Boston, MA; and the
routine and complex procedures. For Further, we created a number of new Hospital for Special Surgery, New York,
the benefit of the reader, we are ICD–9–CM procedure codes effective NY. Based on its analysis, the AAHKS
jlentini on PROD1PC65 with PROPOSALS2
republishing a history of the October 1, 2005, that better distinguish recommended that CMS examine
development of DRGs for hip and knee the many different types of joint Medicare claims data and consider the
replacements and a summary of the replacement procedures that are being creation of separate DRGs for total hip
AAHKS FY 2008 request that were performed. In the FY 2006 IPPS final and total knee arthroplasty procedures.
included in the FY 2008 IPPS final rule rule (70 FR 47305), we indicated a The AAHKS stated that based on the
with comment period (72 FR 47222 commenter had requested that, once we differences between patient
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23568 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
modifications. CMS DRG 471 included should continue to evaluate the data for b At least $1,000 cost difference per
any combination of two or more of the these procedures and consider case between subgroups; or
following procedure codes: additional refinements to the MS–DRGs, b At least $1 million overall cost
• 00.70, Revision of hip replacement, including the need for additional should be shifted to cases with a CC (or
both acetabular and femoral severity levels. AAHKS stated that its MCC) within the base DRG for payment
components. data suggest that all three base DRGs weight calculations.
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In response, we indicated that we did Given the very similar resource of primary and 4 percent to 6 percent of
not believe it was appropriate to modify requirements of MS–DRG 485 and the revision total joint replacement
our five criteria for creating severity fact that these DRGs also contain knee procedures. These infections often
subgroups. Our data did not support procedures, we moved codes 00.83 and result in the need for multiple
creating additional subdivisions based 00.84 out of MS–DRGs 466, 467, and reoperations, prolonged use of
on the criteria. At that time, we believed 468 and into MS–DRGs 485, 486, 487, intravenous and oral antibiotics,
the criteria we established to create 488, and 489. We also indicated that we extended inpatient and outpatient
subdivisions within a base DRG were would continue to monitor the revision rehabilitation, and frequent followup
reasonable and establish the appropriate DRGs to determine if additional visits. Furthermore, clinical outcomes
balance between better recognition of modifications are needed. following single- and two-stage revision
severity of illness, sufficient differences total joint arthroplasty procedures have
d. AAHKS’ Recommendations for FY
between the groups, and a reasonable been less favorable than revision for
2009
number of cases in each subgroup. other causes of failure not associated
However, we indicated that we may The AAHKS’ current request involves with infection.
consider further modifications to the the following recommendations: In addition to the clinical impact, the
criteria at a later date once we have had • That CMS consolidate and reassign AAHKS stated that infected total joint
some experience with MS–DRGs created certain joint procedures that have a replacement procedures also have
using the proposed criteria. diagnosis of an infection or malignancy substantial economic implications for
into MS–DRGs that are similar in terms patients, payers, hospitals, physicians,
The AAHKS indicated in its response
of clinical characteristics and resource and society in terms of direct medical
to the FY 2008 proposed rule that it
utilization. The AAKHS further costs, resource utilization, and the
continued to support the separation of
identifies groups called Stage 1 and 2 indirect costs associated with lost wages
routine and complex joint procedures. It
procedures that it believes require and productivity. The AAHKS stated
believed that certain joint replacement
significant differences in resource that the considerable resources required
procedures have significantly lower
utilization. to care for these patients has resulted in
average charges than do other joint • That CMS reclassify certain specific
replacements. The AAKHS’s data a strong financial disincentive for
joint procedures, which AAHKS refers physicians and hospitals to provide care
suggest that more routine joint to as ‘‘routine,’’ out of their current MS–
replacements are associated with for patients with infected total joint
DRG assignments. The three joint replacements, an increased economic
substantially less resource utilization procedures that AAHKS classifies as
than other more complex revision burden on the high volume tertiary care
‘‘routine’’ are codes 00.73 (Revision of referral centers where patients with
procedures. The AAHKS stated that hip replacement, acetabular liner and/or
leaving these procedures in the revision infected hip replacement procedures are
femoral head only), 00.83 (Revision of frequently referred for definitive
MS–DRGs results in substantial knee replacement, patellar component),
overpayment for these relatively simple, management. The AAHKS further stated
and 00.84 (Revision of total knee that, in some cases, there are
less costly revision procedures, which replacement, tibial insert (liner)). The compromised patient outcomes due to
in turn results in a relative AAHKS advocated removing these three treatment delays as patients with
underpayment for the more complex ‘‘routine’’ procedures from the following infected joint replacements seek
revision procedures. DRGs: MS–DRGs 466, 467, and 468, providers who are willing to care for
In response, we examined data on this MS–DRGs 485, 486, and 487, and MS– them.
issue and identified two procedure DRGs 488 and 489. The AAHKS refers Once a deep infection of a total joint
codes for partial knee revisions that had to MS–DRGs 466, 467, and 468 as prosthesis is identified, the first stage of
significantly lower average charges than ‘‘complex’’ revision DRGs, and treatment involves a hospital admission
did other joint revisions. The two codes recommended that the three ‘‘routine’’ for removal of the infected prosthesis
are as follows: procedures be moved out of MS–DRGs and debridement of the involved bone
• 00.83 Revision of knee replacement, 466, 467, and 468 and MS–DRGs 485, and surrounding tissue. During the same
patellar component 486, and 489 and into MS–DRGs 469 procedure, an antibiotic-impregnated
• 00.84 Revision of total knee and 470 (Major Joint Replacement or cement spacer is typically inserted to
replacement, tibial insert (liner) Reattachment of Lower Extremity with maintain alignment of the limb during
The data suggest that these less and without MCC, respectively). The the course of antibiotic therapy. The
complex partial knee revisions are less AAHKS contended that the three patient is then discharged to a
resource intensive than other cases ‘‘routine’’ procedures have similar rehabilitation facility/nursing home (or
assigned to MS–DRGs 466, 467, or 468. clinical characteristics and resource to home if intravenous therapy can be
We examined other orthopedic DRGs to utilization to those in MS–DRGs 469. safely arranged for the patient) for a 6-
which these two codes could be The recommendations suggested by week course of IV antibiotic treatment
assigned. We found that these cases AAHKS are quite complex and involve until the infection has cleared.
have very similar average charges to a number of specific code lists and MS– After the completion of antibiotic
those in MS–DRG 485 (Knee Procedures DRG assignment changes. We discuss therapy, the hip or knee may be
with Principal Diagnosis of Infection each of these requests in detail below. reaspirated to look for evidence of
with MCC), MS–DRG 486 (Knee (1) AAHKS Recommendation 1: persistent infection or eradication of
Procedures with Principal Diagnosis of Consolidate and reassign patients with infection. A second stage procedure is
Infection with CC), MS–DRG 487 (Knee hip and knee prosthesis related then undertaken, where the patient is
Procedures with Principal Diagnosis of infections or malignancies. readmitted, the hip or knee is
jlentini on PROD1PC65 with PROPOSALS2
Infection without CC), MS–DRG 488 The AAHKS pointed out that deep reexplored, and the cement spacer
(Knee Procedures without Principal infection is one of the most devastating removed. If there are no signs of
Diagnosis of Infection with CC or MCC), complications associated with hip and persistent infection, a hip or knee
and MS–DRG 489 (Knee Procedures knee replacements. These infections prosthesis is reimplanted, often using
without Principal Diagnosis of Infection have been reported to occur in bone graft and costly revision implants
without CC). approximately 0.5 percent to 3 percent in order to address extensive bone loss
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23570 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
and distorted anatomy. Thus, the entire cases be grouped into what it refers to Stage 1 Infection/Neoplasm/Defect
course of treatment for patients with as Stages 1 and 2 as follows: Principal Diagnosis Codes
infected joint replacements is 4 to 6 • Stage 1 would include the removal • 170.7 (Malignant neoplasm of long
months, with an additional 6 to 12 of an infected prosthesis and includes bones of lower limb).
months of rehabilitation. Furthermore, cases in MS–DRGs 463, 464, and 465, • 171.3 (Malignant neoplasm of soft
clinical outcomes following revision for 480, 481, and 482, 485 through 489, and tissue, lower limb, including hip).
infection are poor relative to outcomes 495, 496, and 497. Stage 1 joint • 711.05 (Pyogenic arthritis, pelvic
following revision for other, aseptic procedure codes would include codes region and thigh).
causes. The AAHKS noted that patients 80.05 (Arthrotomy for removal of • 711.06 (Pyogenic arthritis, lower
with bone malignancy have a similar prosthesis, hip), 80.06 (Arthrotomy for leg).
treatment focus—surgery to remove removal of prosthesis, knee), 00.73 • 730.05 (Acute osteomyelitis, pelvic
diseased tissue, chemotherapy to treat (Revision of hip replacement, acetabular region and thigh).
the malignancy, and implantation of the liner and/or femoral head only), and • 730.06 (Acute osteomyelitis, lower
new prosthesis. They also have similar 00.84 (Revision of knee replacement, leg).
resource use. For simplicity, the tibial insert (liner)). • 730.15 (Chronic osteomyelitis,
AAHKS’ discussion focused on infected • Stage 2 would include the implant pelvic region and thigh).
joint prostheses, but it suggested that of a new prosthesis and includes cases • 730.16 (Chronic osteomyelitis,
the issues it raises would apply to in MS–DRGs 461 and 462, 463, 464, and lower leg).
patients with a malignancy as well. 465, 466, 467, and 468, and 469 and • 730.25 (Unspecified osteomyelitis,
The AAHKS stated that these patients 470. Stage 2 joint procedure codes pelvic region and thigh).
are currently grouped in multiple MS– would include codes 00.70 (Revision of • 730.26 (Unspecified osteomyelitis,
DRGs, and the cases are often ‘‘outliers’’ hip replacement, both acetabular and lower leg).
in each one. AAHKS proposed to femoral components), 00.71 (Revision of • 996.66 (Infection and inflammatory
consolidate these patients with similar hip replacement, acetabular reaction due to internal joint
clinical characteristics and treatment component), 00.72 (Revision of hip prosthesis).
into MS–DRGs reflective of their replacement, femoral component), 00.80 • 996.67 (Infection and inflammatory
resource utilization. (Revision of knee replacement, total (all reaction due to other internal
The AAHKS states that these more components)), 00.81 (Revision of knee orthopedic device, implant, and graft).
severe patients are currently classified replacement, tibial component), 00.82 Stage 2 Infection/Neoplasm/Defect
into the following MS–DRGs: (Revision of knee replacement, femoral Principal Diagnosis Codes (an Asterisk *
• MS–DRGs 463, 463, and 465 component), 00.85 (Resurfacing hip, Shows the Diagnoses Included in Stage
(Wound Debridement and Skin Graft total, acetabulum and femoral head), 2 That Were Not Listed in Stage 1)
Excluding Hand, for Musculoskeletal- 00.86 (Resurfacing hip, partial, femoral
Connective Tissue Disease with MCC, head), 00.87 (Resurfacing hip, partial, • 170.7 (Malignant neoplasm of long
with CC, without CC/MCC, acetabulum), 81.51 (Total hip bones of lower limb).
respectively). replacement), 81.52 (Partial hip • 171.3 (Malignant neoplasm of soft
• MS–DRGs 480, 481, and 482 (Hip replacement), 81.53 (Revise hip tissue, lower limb, including hip).
and Femur Procedures Except Major replacement), 81.54 (Total knee • 198.5 (Secondary malignant
Joint with MCC, with CC, without CC/ replacement), 81.55 (Revise knee neoplasm of bone and bone marrow) .*
MCC, respectively). • 711.05 (Pyogenic arthritis, pelvic
replacement), and 81.56 (Total ankle
region and thigh).
• MS–DRGs 485, 486, and 487 (Knee replacement).
• 711.06 (Pyogenic arthritis, lower
Procedures with Principal Diagnosis of As stated earlier, the AAHKS leg).
Infection and with MCC, with CC, and recommended patients with certain • 730.05 (Acute osteomyelitis, pelvic
without CC/MCC, respectively). more severe diagnoses be grouped into region and thigh).
• MS–DRGs 488 and 489 (Knee a higher severity level. While most of • 730.06 (Acute osteomyelitis, lower
Procedures without Principal Diagnosis AAHKS’ comments focused on joint leg).
of Infection and with CC/MCC and replacement patients with infections, • 730.15 (Chronic osteomyelitis,
without CC/MCC, respectively). the AAHKS also believed that patients pelvic region and thigh).
• MS–DRGs 495, 496, and 497 (Local with certain neoplasms require greater • 730.16 (Chronic osteomyelitis,
Excision and Removal of Internal resources. To this group of infections lower leg).
Fixation Devices Except Hip and Femur and neoplasms, the AAHKS • 730.25 (Unspecified osteomyelitis,
with MCC, with CC, and without CC/ recommended the addition of four codes pelvic region and thigh).
MCC, respectively). that capture acquired deformities. The • 730.26 (Unspecified osteomyelitis,
• Other MS–DRGs (The AAHKS did AAHKS believed that these codes would lower leg).
not specify what these other MS–DRGs capture admissions for the second stage • 736.30 (Acquired deformities of
were.). of the treatment for an infected joint. hip, unspecified deformity).
The AAHKS indicated that cases with The AAHKS stated that the significance • 736.39 (Other acquired deformities
the severe diagnoses of infections, of these diagnoses when they are of hip) .*
neoplasms, and structural defects have reported as the principal code position • 736.6 (Other acquired deformities
similarities. These similarities are due was significant in predicting resource of knee) .*
to an overlap of a severe diagnosis utilization. However, the impact was • 736.89 (Other acquired deformities
(including a principal diagnosis of code not as significant when the diagnosis of other parts of limbs). *
jlentini on PROD1PC65 with PROPOSALS2
996.66 (Infected joint prosthesis) and was reported as a secondary diagnosis. • 996.66 (Infection and inflammatory
the resulting need for more extensive The AAHKS recommended that patients reaction due to internal joint
surgical procedures. The AAHKS stated with one of the following infection/ prosthesis). *
that currently these patients are grouped neoplasm/defect principal diagnosis • 996.67 (Infection and inflammatory
into MS–DRGs by major procedure codes be segregated into a higher reaction due to other internal
alone. AAHKS recommended that these severity level. orthopedic device, implant, and graft). *
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23571
For the Stage 2 procedures, AAHKS procedure cases with infections. It e. CMS’ Response to AAHKS’
also suggested the use of the following identified a subset of patients who had Recommendations
secondary diagnosis codes to assign the a principal diagnosis of 996.66
cases to a higher severity level. These (Infection and inflammatory reaction The MS–DRG modifications proposed
conditions would not be the reason the due to internal joint prosthesis) and by the AAHKS are quite complex and
patient was admitted to the hospital. who also had a secondary diagnosis of have many separate parts. We made
They would instead represent secondary sepsis or septicemia. The AAHKS changes to the MS-DRGs in FY 2008 as
conditions that were also present on believed that these patients are for the a result of a request by the AAHKS as
admission or conditions that were most part admitted with both the joint discussed above, to recognize two types
diagnosed after admission. infection and sepsis/septicemia present of partial knee replacements as less
at the time of admission. The codes for complex procedures. We have no data
Stage 2 Infection/Neoplasm/Defect on how effective the new MS–DRGs for
sepsis/septicemia are classified as MCCs
Secondary Diagnosis Codes joint procedures are in differentiating
under MS–DRGs. The AAHKS believed
• 170.7 (Malignant neoplasm of long it is inappropriate to count the patients with varying degrees of
bones of lower limb). secondary diagnosis of sepsis/ severity. Therefore, we analyzed data
• 171.3 (Malignant neoplasm of soft septicemia as a MCC when it is reported reported prior to the adoption of MS–
tissue, lower limb, including hip). with code 996.66. The AAHKS believed DRGs to analyze each of the
• 711.05 (Pyogenic arthritis, pelvic that counting sepsis and septicemia as recommendations made. We begin our
region and thigh). a MCC results in double counting the analysis by focusing first on the more
• 711.06 (Pyogenic arthritis, lower infections. It believed that the joint simple aspects of the recommendations
leg). infection and septicemia are the same made by the AAHKS.
• 730.05 (Acute osteomyelitis, pelvic infection. The AAHKS recommended (1) Changing the MS–DRG Assignment
region and thigh). that the following sepsis and septicemia for Codes 00.73, 00.83, and 00.84
• 730.06 (Acute osteomyelitis, lower codes not count as a MCC when
leg). reported with code 996.66: As discussed previously, in FY 2008,
• 730.15 (Chronic osteomyelitis, • 038.0 (Streptococcal septicemia). the AAHKS recommended that CMS
pelvic region and thigh). • 038.10 (Staphylococcal septicemia, classify certain joint procedures as
• 730.16 (Chronic osteomyelitis, unspecified). either routine or complex. We examined
lower leg). • 038.11 (Staphylococcal aureus the data for these cases and found that
• 730.25 (Unspecified osteomyelitis, septicemia). the following two codes had
pelvic region and thigh). • 038.19 (Other staphylococcal significantly lower charges than the
• 730.26 (Unspecified osteomyelitis, septicemia). other joint revisions: 00.83 (Revision of
lower leg). • 038.2 (Pneumococcal septicemia knee replacement, patellar component)
• 996.66 (Infection and inflammatory [streptococcus pneumonia septicemia]). and 00.84 (Revision of knee
reaction due to internal joint • 038.3 (Septicemia due anaerobes). replacement, tibial insert (liner)).
prosthesis). • 038.40 (Septicemia due to gram- Therefore, we moved these two codes to
• 996.67 (Infection and inflammatory negative organisms). MS–DRGs 485, 486, and 487, and MS–
reaction due to other internal • 038.41 (Hemophilus influenzae [H. DRGs 488 and 489.
orthopedic device, implant, and graft). Influenzae]). As a result of AAHKS’ most recent
(2) AAHKS Recommendation 2: • 038.42 (Escherichia coli [E. Coli]). recommendations, we once again
Reclassify certain specific joint • 038.43 (Pseudomonas). examined claims data for these two knee
procedures. • 038.44 (Serratia). procedures (codes 00.83 and 00.84) as
The AAHKS suggested that cases with • 038.49 (Other septicemia due to well as its request that we move code
the infection/neoplasm/defect diagnoses gram-negative organisms). 00.73 (Revision of hip replacement,
listed above be segregated according to • 038.8 (Other specified septicemias). acetabular liner and/or femoral head
the Stage 1 and 2 groups listed above. • 038.9 (Unspecified septicemia). only). Code 00.73 is assigned to MS–
The AAHKS made one final • 995.91 (Sepsis). DRGs 466, 467, and 468. The following
recommendation concerning joint • 995.92 (Severe sepsis). tables show our findings.
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23572 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
The tables show that codes 00.73, of sepsis and septicemia require cases they refer to as Stage 1 and 2.
00.83, and 00.84 are appropriately significant resources. Therefore, we AAHKS stated that this is particularly
assigned to their current MS–DRGs. The classified the sepsis and septicemia true for those with infections,
data do not support moving these three codes as MCCs. Our clinical advisors do neoplasms, or structural defects. We
codes to MS–DRGs 469 and 470. not believe it is appropriate to exclude used the list of procedure codes listed
Therefore, we are not proposing a all cases of sepsis and septicemia that above that AAHKS describes as Stage 1
change of MS–DRG assignment for are reported as a secondary diagnosis and 2 procedures. We also used
codes 00.73, 00.83, and 00.84. with code 996.66 from being classified AAHKS’ designated lists of Stage 1 and
as a MCC. We discuss septicemia as part 2 principal diagnosis codes to examine
(2) Excluding Sepsis and Septicemia
of hospital acquired conditions this proposal. This proposal entails
From Being a MCC With Code 996.66
provision under section II.F. of the
There are cases where a patient may moving cases with a Stage 1 or 2
preamble of this proposed rule. For the
be admitted with an infection of a joint purposes of classifying sepsis and principal diagnosis and procedure out
prosthesis (code 996.66) and also have septicemia as non-CCs when reported of their current MS–DRG assignment in
sepsis. In these cases, it may be possible with code 996.66, we do not support the following 19 MS–DRGs and into a
to perform joint procedures as suggested this recommendation. Therefore, we are newly consolidated set of MS–DRGs:
by AAHKS. However, in other cases, a not proposing that the sepsis and MS–DRGs 463, 464, and 465, 480, 481,
patient may be admitted with an septicemia codes be added to the CC and 482, 485 through 489, and 495, 496,
infection of a joint prosthesis and then exclusion list for code 996.66. and 497.
develop sepsis during the stay. Because As can be seen from the information
our current data do not indicate whether (3) Differences Between Stage 1 and 2
Cases With Severe Diagnoses below, there was not a significant
a condition is present on admission, we
difference in average charges between
could not determine whether or not the We next examined data on AAHKS’
these Stage 1 and Stage 2 cases that have
sepsis occurred after admission. Our suggestion that there are significantly
data have consistently shown that cases differences in resource utilization for an MCC.
Average charges for Stage 1 cases with (4) Moving Joint Procedure Cases to secondary diagnosis. This results in the
an MCC was $79,232 compared to New MS–DRGs Based on Secondary movement of cases out of MS–DRGs
$80,781 for Stage 2. Stage 1 cases Diagnoses of Infection which were configured based on the
without an MCC had average charges of reason for the admission (for example,
$44,716 compared to $57,355. These We examined AAHKS’ principal diagnosis) and surgery. The
recommendation that Stage 2 joint cases cases would instead be assigned based
data do not support reconfiguring the
with specific secondary diagnoses of on conditions that are reported as
current MS–DRGs based on this new
jlentini on PROD1PC65 with PROPOSALS2
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23573
claims data based on hospital discharges set of MS–DRGs with similar resource cases with varying average charges from
under the MS–DRGs which began utilizations into which the Stage 1 cases 19 current MS–DRGs and consolidating
October 1, 2008. Our clinical advisors could be assigned. Therefore, the them into two separate sets of MS–
believe it would be more appropriate to AAHKS recommended that CMS create DRGs. As the data below indicate, the
wait for data under the new MS–DRG three new MS–DRGs for Stage 1 cases average charges vary from as low as
system to determine how well the new with infections, neoplasms and $29,181 in MS–DRG 487 to $81,089 in
severity levels are addressing accurate structural defects which would be titled MS–DRG 463. Furthermore, the average
payment for these cases before ‘‘Arthrotomy/Removal/Component charges for these infection/neoplasm/
considering this approach to assigning exchange of Infected Hip or Knee structural defect cases are very similar
cases to a MS–DRG. Prosthesis with MCC, with CC, and to other cases in their respective MS–
without CC/MCC’’, respectively. DRG assignments for many of these MS–
(5) Moving Cases With Infection,
The AAHKS recommended moving DRGs. There are cases where the average
Neoplasms, or Structural Defects Out of
Stage 2 cases out of MS–DRGs 466, 467, charges are higher. In MS–DRG 469 and
19 MS–DRGs and Into Two Newly
and 468, and 469 and 470 and into MS– 470, the infection/neoplasm/structural
Developed MS–DRGs
DRGs 461 and 462. AAHKS defect cases are significantly higher.
The last recommended by AAHKS recommended that MS–DRGs 461 and However, there are only 136 cases in
that we considered was moving cases 462 be renamed ‘‘Major Joint Procedures MS–DRG 469 out of a total of 29,030
with a principal diagnosis of infection, of Lower Extremity—Bilateral/Multiple/ cases with these diagnoses. There are
neoplasm, or structural defect from their Infection/Malignancy’’. only 673 cases in MS–DRG 470 out of
list of Stage 1 and 2 diagnoses and In reviewing these proposed changes, a total of 385,123 cases with one of
consolidated them into newly we had a number of concerns. The first these diagnoses. The table below clearly
constructed and modified MS–DRGs. concern was that these proposed demonstrates the wide variety of
AAHKS could not identify an existing changes would result in the removal of charges for cases with these diagnoses.
Given the wide variety of charges and believe the data support the AAHKS’ 19 MS–DRGs above and consolidating
the small number of cases where there recommendations. The data do not them into a new set of MS–DRGs, either
are differences in charges, we do not support removing these cases from the newly created, or by adding them to
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23574 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
MS–DRG 461 or 462, which have • MS–DRG 871 (Septicemia without 6. MDC 21 (Injuries, Poisonings and
average charges of $80,718 and $57,355, Mechanical Ventilation 96+ Hours with Toxic Effects of Drugs): Traumatic
respectively. MCC). Compartment Syndrome
A second major concern involves
• MS–DRG 872 (Septicemia without Traumatic compartment syndrome is
redefining MS–DRGs 461 and 462 is that
Mechanical Ventilation 96+ Hours a condition in which increased pressure
these MS–DRG currently captures
without MCC). within a confined anatomical space that
bilateral and multiple joint procedures.
These MS–DRGs were created to contains blood vessels, muscles, nerves,
These MS–DRGs were specifically
and bones causes a decrease in blood
created to capture a unique set of better recognize severity of illness
flow and may lead to tissue necrosis.
patients who undergo procedures on among patients diagnosed with
There are five ICD–9–CM diagnosis
more than one lower joint. Redefining conditions including septicemia, severe codes that were created effective
these MS–DRGs to include both single sepsis, septic shock, and systemic October 1, 2006, to identify traumatic
and multiple joints undermines the inflammatory response syndrome (SIRS)
clinical coherence of this MS–DRG. It compartment syndrome of various sites.
who are also treated with mechanical • 958.90 (Compartment syndrome,
would create a widely diverse group of ventilation for a specified duration of
patients based on either a list of specific unspecified).
time. • 958.91 (Traumatic compartment
diagnoses or the fact that the patient had
multiple lower joint procedures. According to the manufacturer, syndrome of upper extremity).
‘‘severe sepsis is a common, deadly and • 958.92 (Traumatic compartment
f. Conclusion costly disease, yet the number of syndrome of lower extremity).
The AAHKS recommended a number patients impacted and the outcomes • 958.93 (Traumatic compartment
of complicated, interrelated MS–DRG associated with their care remain largely syndrome of abdomen).
changes to the joint procedure MS– hidden within the administrative data • 958.99 (Traumatic compartment
DRGs. We have not yet had the set.’’ The manufacturer further noted syndrome of other sites) .
opportunity to review data for these that, although improvements have been Cases with one of the diagnosis codes
cases under the new MS–DRGs. We did listed above reported as the principal
made in the ICD–9–CM coding of severe
analyze the impact of these diagnosis and no operating room
sepsis (diagnosis code 995.92) and
recommendations using cases prior to procedure are assigned to either MS–
septic shock (diagnosis code 785.52),
the implementation of MS–DRGs. The DRG 922 (Other Injury, Poisoning and
results of an analysis demonstrated an Toxic Effect Diagnosis with MCC) or
recommendations were difficult to unacceptably high mortality rate for
analyze because there were so many MS–DRG 923 (Other Injury, Poisoning
patients reported to have those and Toxic Effect Diagnosis without
separate logic changes that impacted a
conditions. The manufacturer believed MCC) in MDC 21.
number of MS–DRGs. We did examine
each major suggestion separately, and that revising the titles to incorporate In the FY 2008 IPPS final rule with
found that our data and clinical analysis ‘‘severe sepsis’’ will provide various comment period when we adopted the
did not support making these changes. clinicians and researchers the MS–DRGs, we inadvertently omitted the
Therefore, we are not proposing any opportunity to improve outcomes for addition of these traumatic
revisions to the joint procedure MS– these patients. Therefore, the compartment syndrome codes 958.90
DRGs for FY 2009. We look forward to manufacturer recommended revising the through 958.99 to the multiple trauma
examining these issues once we receive current MS–DRG titles as follows: MS–DRGs 963 (Other Multiple
data under the MS–DRG system. We • Proposed Revised MS–DRG 870 Significant Trauma with MCC), MS–
also welcome additional (Septicemia or Severe Sepsis with DRG 964 (Other Multiple Significant
recommendations from the AAHKS and Mechanical Ventilation 96+ Hours). Trauma with CC), and MS–DRG 965
others on a more incremental approach (Other Multiple Significant Trauma
• Proposed Revised MS–DRG 871 without CC/MCC) in MDC 24 (Multiple
to resolving its concerns about the
(Septicemia or Severe Sepsis without Significant Trauma). Cases are assigned
ability of the current MS–DRGs to
Mechanical Ventilation 96+ Hours with to MDC 24 based on the principal
adequately capture differences in
MCC). diagnosis of trauma and at least two
severity levels for joint procedure
patients. • Proposed Revised MS–DRG 872 significant trauma diagnosis codes
(Septicemia or Severe Sepsis without (either as principal or secondary
5. MDC 18 (Infections and Parasitic Mechanical Ventilation 96+ Hours diagnoses) from different body site
Diseases (Systemic or Unspecified categories. There are eight different
without MCC).
Sites)): Severe Sepsis body site categories as follows:
We agree with the manufacturer that
We received a request from a • Significant head trauma.
revising the current MS–DRG titles to
manufacturer to modify the titles for • Significant chest trauma.
include the term ‘‘severe sepsis’’ would • Significant abdominal trauma.
three MS–DRGs with the most
significant concentration of severe better assist in the recognition and • Significant kidney trauma.
sepsis patients. The manufacturer stated identification of this disease, which • Significant trauma of the urinary
that modification of the titles will assist could lead to better clinical outcomes system.
in quality improvement efforts and and quality improvement efforts. In • Significant trauma of the pelvis or
provide a better reflection on the types addition, both severe sepsis (diagnosis spine.
of patients included in these MS–DRGs. code 995.92) and septic shock • Significant trauma of the upper
Specifically, the manufacturer urged (diagnosis code 785.52) are currently limb.
jlentini on PROD1PC65 with PROPOSALS2
CMS to incorporate the term ‘‘severe already assigned to these three MS– • Significant trauma of the lower
sepsis’’ into the titles of the following DRGs. Therefore, we are proposing to limb.
MS–DRGs that became effective October revise the titles of MS–DRGs 870, 871, Therefore, we are proposing to add
1, 2007 (FY 2008) and 872 to reflect severe sepsis in the traumatic compartment syndrome codes
• MS–DRG 870 (Septicemia with titles as suggested by the manufacturer 958.90 through 958.99 to MS–DRGs 963
Mechanical Ventilation 96+ Hours). and listed above for FY 2009. and MS–DRG 965 in MDC 24. Under
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23575
this proposal, codes 958.90 through (Hydrocele, unspecified). We have had resources for each MS–DRG by
958.99 would be added to the list of no reported problems or confusion with frequency to determine the weighted
principal diagnosis of significant the omission of these codes from this average resources for each surgical class.
trauma. In addition, code 958.91 would section of the MCE, but in order to have For example, assume surgical class A
be added to the list of significant trauma an accurate product, we are proposing includes MS–DRGs 1 and 2 and surgical
of upper limb, code 958.92 would be that these codes be added for FY 2009. class B includes MS–DRGs 3, 4, and 5.
added to the list of significant trauma of Assume also that the average charge of
c. Limited Coverage Edit
lower limb, and code 958.93 would be MS–DRG 1 is higher than that of MS–
added to the list of significant As explained in section II.G.1. of the DRG 3, but the average charges of MS–
abdominal trauma. preamble of this proposed rule, we are DRGs 4 and 5 are higher than the
proposing to remove procedure code average charge of MS–DRG 2. To
7. Medicare Code Editor (MCE) Changes 37.52 (Implantation of internal determine whether surgical class A
As explained under section II.B.1. of biventricular heart replacement system) should be higher or lower than surgical
the preamble of this proposed rule, the from the MCE ‘‘Non-Covered class B in the surgical hierarchy, we
Medicare Code Editor (MCE) is a Procedure’’ edit and to assign it to the would weight the average charge of each
software program that detects and ‘‘Limited Coverage’’ edit. We are MS–DRG in the class by frequency (that
reports errors in the coding of Medicare proposing to include in this proposed is, by the number of cases in the MS–
claims data. Patient diagnoses, edit the requirement that ICD–9–CM DRG) to determine average resource
procedure(s), and demographic diagnosis code V70.7 (Examination of consumption for the surgical class. The
information are entered into the participant in clinical trial) also be surgical classes would then be ordered
Medicare claims processing systems and present on the claim. We are proposing from the class with the highest average
are subjected to a series of automated that claims submitted without both resource utilization to that with the
screens. The MCE screens are designed procedure code 37.52 and diagnosis lowest, with the exception of ‘‘other
to identify cases that require further code V70.7 would be denied because O.R. procedures’’ as discussed below.
review before classification into a DRG. they would not be in compliance with This methodology may occasionally
For FY 2009, we are proposing to make the proposed coverage policy explained result in assignment of a case involving
the following changes to the MCE edits: in section II.G.1. of this preamble. multiple procedures to the lower-
a. List of Unacceptable Principal 8. Surgical Hierarchies weighted MS–DRG (in the highest, most
Diagnoses in MCE resource-intensive surgical class) of the
Some inpatient stays entail multiple available alternatives. However, given
Diagnosis code V62.84 (Suicidal surgical procedures, each one of which, that the logic underlying the surgical
ideation) was created for use beginning occurring by itself, could result in hierarchy provides that the GROUPER
October 1, 2005. At the time the assignment of the case to a different search for the procedure in the most
diagnosis code was created, it was not MS–DRG within the MDC to which the resource-intensive surgical class, in
clear that the creation of this code was principal diagnosis is assigned. cases involving multiple procedures,
requested in order to describe the Therefore, it is necessary to have a this result is sometimes unavoidable.
principal reason for admission to a decision rule within the GROUPER by We note that, notwithstanding the
facility or the principal reason for which these cases are assigned to a foregoing discussion, there are a few
treatment. The NCHS Official ICD–9– single MS–DRG. The surgical hierarchy, instances when a surgical class with a
CM Coding Guidelines therefore an ordering of surgical classes from lower average charge is ordered above a
categorized the group of codes in V62.X most resource-intensive to least surgical class with a higher average
for use only as additional or secondary resource-intensive, performs that charge. For example, the ‘‘other O.R.
diagnoses. It has been brought to the function. Application of this hierarchy procedures’’ surgical class is uniformly
government’s attention that the use of ensures that cases involving multiple ordered last in the surgical hierarchy of
this code is hampered by its designation surgical procedures are assigned to the each MDC in which it occurs, regardless
as an additional-only diagnosis. NCHS MS–DRG associated with the most of the fact that the average charge for the
has therefore modified the Official resource-intensive surgical class. MS–DRG or MS–DRGs in that surgical
Coding Guidelines for FY 2009 by Because the relative resource intensity class may be higher than that for other
making this code acceptable as a of surgical classes can shift as a function surgical classes in the MDC. The ‘‘other
principal diagnosis as well as an of MS–DRG reclassification and O.R. procedures’’ class is a group of
additional diagnosis. In order to recalibrations, we reviewed the surgical procedures that are only infrequently
conform to this change by NCHS, we are hierarchy of each MDC, as we have for related to the diagnoses in the MDC, but
proposing to remove code V62.84 from previous reclassifications and are still occasionally performed on
the MCE list of ‘‘Unacceptable Principal recalibrations, to determine if the patients in the MDC with these
Diagnoses’’ for FY 2009. ordering of classes coincides with the diagnoses. Therefore, assignment to
intensity of resource utilization. these surgical classes should only occur
b. Diagnoses Allowed for Males Only A surgical class can be composed of if no other surgical class more closely
Edit one or more MS–DRGs. For example, in related to the diagnoses in the MDC is
There are four diagnosis codes that MDC 11, the surgical class ‘‘kidney appropriate.
were inadvertently left off of the MCE transplant’’ consists of a single MS–DRG A second example occurs when the
edit titled ‘‘Diagnoses Allowed for (MS–DRG 652) and the class ‘‘kidney, difference between the average charges
Males Only.’’ These codes are located in ureter and major bladder procedures’’ for two surgical classes is very small.
the chapter of the ICD–9–CM diagnosis consists of three MS–DRGs (MS–DRGs We have found that small differences
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codes entitled ‘‘Diseases of Male Genital 653, 654, and 655). Consequently, in generally do not warrant reordering of
Organs.’’ We are proposing to add the many cases, the surgical hierarchy has the hierarchy because, as a result of
following four codes to this MCE edit: an impact on more than one MS–DRG. reassigning cases on the basis of the
603.0 (Encysted hydrocele), 603.1 The methodology for determining the hierarchy change, the average charges
(Infected hydrocele), 603.8 (Other most resource-intensive surgical class are likely to shift such that the higher-
specified types of hydrocele), and 603.9 involves weighting the average ordered surgical class has a lower
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23576 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
average charge than the class ordered treated as CCs; and (3) to ensure that 9–CM diagnosis coding system effective
below it. cases are appropriately classified October 1, 2008. (See section II.G.11. of
For FY 2009, we are proposing a between the complicated and the preamble of this proposed rule with
revision of the surgical hierarchy for uncomplicated DRGs in a pair. As we comment period for a discussion of
MDC 5 (Diseases and Disorders of the indicated above, we developed a list of ICD–9–CM changes.) We are proposing
Circulatory System) by placing MS–DRG diagnoses, using physician panels, to to make these changes in accordance
245 (AICD Generator Procedures) above include those diagnoses that, when with the principles established when we
proposed new MS–DRG 265 (AICD Lead present as a secondary condition, would created the CC Exclusions List in 1987.
Procedures). be considered a substantial In addition, as discussed in section
9. CC Exclusions List complication or comorbidity. In II.D.3. of the preamble of this proposed
previous years, we have made changes rule, we are indicating on the CC
a. Background to the list of CCs, either by adding new exclusion list some updates to reflect
As indicated earlier in the preamble CCs or deleting CCs already on the list. the exclusion of a few codes from being
of this proposed rule, under the IPPS In the May 19, 1987 proposed notice an MCC under the MS–DRG system that
DRG classification system, we have (52 FR 18877) and the September 1, we adopted for FY 2008.
developed a standard list of diagnoses 1987 final notice (52 FR 33154), we Tables 6G and 6H, Additions to and
that are considered CCs. Historically, we explained that the excluded secondary Deletions from the CC Exclusion List,
developed this list using physician diagnoses were established using the respectively, which will be effective for
panels that classified each diagnosis following five principles: discharges occurring on or after October
code based on whether the diagnosis, • Chronic and acute manifestations of 1, 2008, are not being published in this
when present as a secondary condition, the same condition should not be proposed rule because of the length of
would be considered a substantial considered CCs for one another. the two tables. Instead, we are making
complication or comorbidity. A • Specific and nonspecific (that is, them available through the Internet on
substantial complication or comorbidity not otherwise specified (NOS)) the CMS Web site at: http://
was defined as a condition that, because diagnosis codes for the same condition www.cms.hhs.gov/AcuteInpatientPPS.
of its presence with a specific principal should not be considered CCs for one Each of these principal diagnoses for
diagnosis, would cause an increase in another. which there is a CC exclusion is shown
the length of stay by at least 1 day in • Codes for the same condition that in Tables 6G and 6H with an asterisk,
at least 75 percent of the patients. We cannot coexist, such as partial/total, and the conditions that will not count
refer readers to section II.D.2. and 3. of unilateral/bilateral, obstructed/ as a CC, are provided in an indented
the preamble of the FY 2008 IPPS final unobstructed, and benign/malignant, column immediately following the
rule with comment period for a should not be considered CCs for one affected principal diagnosis.
discussion of the refinement of CCs in another.
relation to the MS–DRGs we adopted for • Codes for the same condition in A complete updated MCC, CC, and
FY–2008 (72 FR 47152 through 47121). anatomically proximal sites should not Non-CC Exclusions List is also available
be considered CCs for one another. through the Internet on the CMS Web
b. CC Exclusions List for FY 2009 • Closely related conditions should site at: http:/www.cms.hhs.gov/
In the September 1, 1987 final notice not be considered CCs for one another. AcuteInpatientPPS. Beginning with
(52–FR–33143) concerning changes to The creation of the CC Exclusions List discharges on or after October 1, 2008,
the DRG classification system, we was a major project involving hundreds the indented diagnoses will not be
modified the GROUPER logic so that of codes. We have continued to review recognized by the GROUPER as valid
certain diagnoses included on the the remaining CCs to identify additional CCs for the asterisked principal
standard list of CCs would not be exclusions and to remove diagnoses diagnosis.
considered valid CCs in combination from the master list that have been To assist readers in the review of
with a particular principal diagnosis. shown not to meet the definition of a changes to the MCC and CC lists that
We created the CC Exclusions List for CC.12 occurred as a result of updates to the
the following reasons: (1) To preclude For FY 2009, we are proposing to ICD–9–CM codes, as described in Tables
coding of CCs for closely related make limited revisions to the CC 6A, 6C, and 6E, we are providing the
conditions; (2) to preclude duplicative Exclusions List to take into account the following summaries of those MCC and
or inconsistent coding from being changes that will be made in the ICD– CC changes.
249.10 ........................ Secondary diabetes mellitus with ketoacidosis, not stated as uncontrolled, or unspecified.
249.11 ........................ Secondary diabetes mellitus with ketoacidosis, uncontrolled.
249.20 ........................ Secondary diabetes mellitus with hyperosmolarity, not stated as uncontrolled, or unspecified.
12 See the FY 1989 final rule (53 FR 38485, 1994), for the FY 1995 revisions; the FY 1996 final 2004 final rule (68 FR 45364, August 1, 2003), for
September 30, 1988), for the revision made for the rule (60 FR 45782, September 1, 1995), for the FY the FY 2004 revisions; the FY 2005 final rule (69
discharges occurring in FY 1989; the FY 1990 final 1996 revisions; the FY 1997 final rule (61 FR 46171, FR 49848, August 11, 2004), for the FY 2005
rule (54 FR 36552, September 1, 1989), for the FY August 30, 1996), for the FY 1997 revisions; the FY revisions; the FY 2006 final rule (70 FR 47640,
jlentini on PROD1PC65 with PROPOSALS2
1990 revision; the FY 1991 final rule (55 FR 36126, 1998 final rule (62 FR 45966, August 29, 1997) for August 12, 2005), for the FY 2006 revisions; the FY
September 4, 1990), for the FY 1991 revision; the the FY 1998 revisions; the FY 1999 final rule (63
2007 final rule (71 FR 47870) for the FY 2007
FY 1992 final rule (56 FR 43209, August 30, 1991) FR 40954, July 31, 1998), for the FY 1999 revisions;
for the FY 1992 revision; the FY 1993 final rule (57 the FY 2001 final rule (65 FR 47064, August 1, revisions; and the FY 2008 final rule (72 FR 47130)
FR 39753, September 1, 1992), for the FY 1993 2000), for the FY 2001 revisions; the FY 2002 final for the FY 2008 revisions. In the FY 2000 final rule
revision; the FY 1994 final rule (58 FR 46278, rule (66 FR 39851, August 1, 2001), for the FY 2002 (64 FR 41490, July 30, 1999, we did not modify the
September 1, 1993), for the FY 1994 revisions; the revisions; the FY 2003 final rule (67 FR 49998, CC Exclusions List because we did not make any
FY 1995 final rule (59 FR 45334, September 1, August 1, 2002), for the FY 2003 revisions; the FY changes to the ICD–9–CM codes for FY 2000.
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209.10 ........................ Malignant carcinoid tumor of the large intestine, unspecified portion.
209.11 ........................ Malignant carcinoid tumor of the appendix.
209.12 ........................ Malignant carcinoid tumor of the cecum.
209.13 ........................ Malignant carcinoid tumor of the ascending colon.
209.14 ........................ Malignant carcinoid tumor of the transverse colon.
209.15 ........................ Malignant carcinoid tumor of the descending colon.
209.16 ........................ Malignant carcinoid tumor of the sigmoid colon.
209.17 ........................ Malignant carcinoid tumor of the rectum.
209.20 ........................ Malignant carcinoid tumor of unknown primary site.
209.21 ........................ Malignant carcinoid tumor of the bronchus and lung.
209.22 ........................ Malignant carcinoid tumor of the thymus.
209.23 ........................ Malignant carcinoid tumor of the stomach.
209.24 ........................ Malignant carcinoid tumor of the kidney.
209.25 ........................ Malignant carcinoid tumor of foregut, not otherwise specified.
209.26 ........................ Malignant carcinoid tumor of midgut, not otherwise specified.
209.27 ........................ Malignant carcinoid tumor of hindgut, not otherwise specified.
209.29 ........................ Malignant carcinoid tumor of other sites.
209.30 ........................ Malignant poorly differentiated neuroendocrine carcinoma, any site.
238.77 ........................ Post-transplant lymphoproliferative disorder (PTLD).
279.50 ........................ Graft-versus-host disease, unspecified.
279.51 ........................ Acute graft-versus-host disease.
279.52 ........................ Chronic graft-versus-host disease.
279.53 ........................ Acute on chronic graft-versus-host disease.
346.60 ........................ Persistent migraine aura with cerebral infarction, without mention of intractable migraine without mention of status
migrainosus.
346.61 ........................ Persistent migraine aura with cerebral infarction, with intractable migraine, so stated, without mention of status
migrainosus.
346.62 ........................ Persistent migraine aura with cerebral infarction, without mention of intractable migraine with status migrainosus.
346.63 ........................ Persistent migraine aura with cerebral infarction, with intractable migraine, so stated, with status migrainosus.
511.81 ........................ Malignant pleural effusion.
511.89 ........................ Other specified forms of effusion, except tuberculous.
649.70 ........................ Cervical shortening, unspecified as to episode of care or not applicable.
649.71 ........................ Cervical shortening, delivered, with or without mention of antepartum condition.
649.73 ........................ Cervical shortening, antepartum condition or complication.
695.12 ........................ Erythema multiforme major.
695.13 ........................ Stevens-Johnson syndrome.
695.14 ........................ Stevens-Johnson syndrome-toxic epidermal necrolysis overlap syndrome.
695.15 ........................ Toxic epidermal necrolysis.
695.53 ........................ Exfoliation due to erythematous condition involving 30–39 percent of body surface.
695.54 ........................ Exfoliation due to erythematous condition involving 40–49 percent of body surface.
695.55 ........................ Exfoliation due to erythematous condition involving 50–59 percent of body surface.
695.56 ........................ Exfoliation due to erythematous condition involving 60–69 percent of body surface.
695.57 ........................ Exfoliation due to erythematous condition involving 70–79 percent of body surface.
695.58 ........................ Exfoliation due to erythematous condition involving 80–89 percent of body surface.
695.59 ........................ Exfoliation due to erythematous condition involving 90 percent or more of body surface.
997.31 ........................ Ventilator associated pneumonia.
997.39 ........................ Other respiratory complications.
998.30 ........................ Disruption of wound, unspecified.
998.33 ........................ Disruption of traumatic wound repair.
999.81 ........................ Extravasation of vesicant chemotherapy.
999.82 ........................ Extravasation of other vesicant agent.
SUMMARY OF DELETIONS TO THE MS– List, is available from 3M/Health Wallingford, CT 06492; or by calling
DRG CC LIST.—TABLE 6J.2 Information Systems (HIS), which, (203) 949–0303. Please specify the
under contract with CMS, is responsible revision or revisions requested.
Code Description for updating and maintaining the 10. Review of Procedure Codes in MS
GROUPER program. The current DRG DRGs 981, 982, and 983; 984, 985, and
046.1 ...... Jakob-Creutzfeldt disease. Definitions Manual, Version 25.0, is
337.0 ...... Idiopathic peripheral autonomic 986; and 987, 988, and 989
available for $225.00, which includes
neuropathy.
695.1 ...... Erythema multiforme.
$15.00 for shipping and handling. Each year, we review cases assigned
707.00 .... Pressure ulcer, unspecified site. Version 26.0 of this manual, which will to former CMS DRG 468 (Extensive O.R.
707.01 .... Pressure ulcer, elbow. include the final FY 2009 DRG changes, Procedure Unrelated to Principal
707.09 .... Pressure ulcer, other site. will be available in hard copy for Diagnosis), CMS DRG 476 (Prostatic
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997.3 ...... Respiratory complications. $250.00. Version 26.0 of the manual is O.R. Procedure Unrelated to Principal
999.8 ...... Other transfusion reaction. also available on a CD for $200.00; a Diagnosis), and CMS DRG 477
combination hard copy and CD is (Nonextensive O.R. Procedure Unrelated
Alternatively, the complete available for $400.00. These manuals to Principal Diagnosis) to determine
documentation of the GROUPER logic, may be obtained by writing 3M/HIS at whether it would be appropriate to
including the current CC Exclusions the following address: 100 Barnes Road, change the procedures assigned among
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23579
these CMS DRGs. Under the MS–DRGs that are unrelated to the principal diagnosis code, result in assignment to
that we adopted for FY 2008, CMS DRG diagnosis.13 MS–DRGs 981 through 983, 984 through
468 was split three ways and became For FY 2009, we are not proposing to 986, and 987 through 989 (formerly,
MS–DRGs 981, 982, and 983 (Extensive change the procedures assigned among CMS DRGs 468, 476, and 477,
O.R. Procedure Unrelated to Principal these DRGs. respectively), to ascertain whether any
Diagnosis with MCC, with CC, and a. Moving Procedure Codes From MS– of those procedures should be
without CC/MCC). CMS DRG 476 DRGs 981 Through 983 or MS–DRGs reassigned from one of these three DRGs
became MS–DRGs 984, 985, and 986 987 Through 989 to MDCs to another of the three DRGs based on
(Prostatic O.R. Procedure Unrelated to average charges and the length of stay.
Principal Diagnosis with MCC, with CC, We annually conduct a review of We look at the data for trends such as
and without CC/MCC). CMS DRG 477 procedures producing assignment to shifts in treatment practice or reporting
became MS–DRGs 987, 988, and 989 MS–DRGs 981 through 983 (formerly practice that would make the resulting
(Nonextensive O.R. Procedure Unrelated CMS DRG 468) or MS–DRGs 987 DRG assignment illogical. If we find
to Principal Diagnosis with MCC, with through 989 (formerly CMS DRG 477) these shifts, we would propose to move
CC, and without CC/MCC). on the basis of volume, by procedure, to cases to keep the DRGs clinically similar
see if it would be appropriate to move or to provide payment for the cases in
MS–DRGs 981 through 983, 984
procedure codes out of these DRGs into a similar manner. Generally, we move
through 986, and 987 through 989
one of the surgical DRGs for the MDC only those procedures for which we
(formerly CMS DRGs 468, 476, and 477,
into which the principal diagnosis falls. have an adequate number of discharges
respectively) are reserved for those cases
The data are arrayed in two ways for to analyze the data.
in which none of the O.R. procedures comparison purposes. We look at a
performed are related to the principal For FY 2009, we are not proposing to
frequency count of each major operative move any procedure codes among these
diagnosis. These DRGs are intended to procedure code. We also compare
capture atypical cases, that is, those DRGs.
procedures across MDCs by volume of
cases not occurring with sufficient procedure codes within each MDC. c. Adding Diagnosis or Procedure Codes
frequency to represent a distinct, We identify those procedures to MDCs
recognizable clinical group. MS–DRGs occurring in conjunction with certain Based on our review this year, we are
984 through 986 (previously CMS DRG principal diagnoses with sufficient not proposing to add any diagnosis
476) are assigned to those discharges in frequency to justify adding them to one codes to MDCs for FY 2009.
which one or more of the following of the surgical DRGs for the MDC in
prostatic procedures are performed and which the diagnosis falls. For FY 2009, 11. Changes to the ICD–9–CM Coding
are unrelated to the principal diagnosis: we are not proposing to remove any System
• 60.0, Incision of prostate. procedures from MS–DRGs 981 through As described in section II.B.1. of the
• 60.12, Open biopsy of prostate. 983 or MS–DRGs 987 through 989. preamble of this proposed rule, the ICD–
• 60.15, Biopsy of periprostatic b. Reassignment of Procedures Among
9–CM is a coding system used for the
tissue. reporting of diagnoses and procedures
MS–DRGs 981 Through 983, 984 performed on a patient. In September
• 60.18, Other diagnostic procedures Through 986, and 987 Through 989)
on prostate and periprostatic tissue. 1985, the ICD–9–CM Coordination and
We also annually review the list of Maintenance Committee was formed.
• 60.21, Transurethral prostatectomy.
ICD–9–CM procedures that, when in This is a Federal interdepartmental
• 60.29, Other transurethral combination with their principal committee, co-chaired by the National
prostatectomy.
Center for Health Statistics (NCHS), the
• 60.61, Local excision of lesion of 13 The original list of the ICD–9–CM procedure
Centers for Disease Control and
prostate. codes for the procedures we consider nonextensive
Prevention, and CMS, charged with
procedures, if performed with an unrelated
• 60.69, Prostatectomy, not elsewhere principal diagnosis, was published in Table 6C in maintaining and updating the ICD–9–
classified. section IV. of the Addendum to the FY 1989 final CM system. The Committee is jointly
• 60.81, Incision of periprostatic rule (53 FR 38591). As part of the FY 1991 final rule responsible for approving coding
tissue. (55 FR 36135), the FY 1992 final rule (56 FR 43212),
the FY 1993 final rule (57 FR 23625), the FY 1994 changes, and developing errata,
• 60.82, Excision of periprostatic final rule (58 FR 46279), the FY 1995 final rule (59 addenda, and other modifications to the
tissue. FR 45336), the FY 1996 final rule (60 FR 45783), ICD–9–CM to reflect newly developed
the FY 1997 final rule (61 FR 46173), and the FY
• 60.93, Repair of prostate. 1998 final rule (62 FR 45981), we moved several
procedures and technologies and newly
• 60.94, Control of (postoperative) other procedures from DRG 468 to DRG 477, and identified diseases. The Committee is
hemorrhage of prostate. some procedures from DRG 477 to DRG 468. No also responsible for promoting the use
procedures were moved in FY 1999, as noted in the of Federal and non-Federal educational
• 60.95, Transurethral balloon final rule (63 FR 40962); in FY 2000 (64 FR 41496);
dilation of the prostatic urethra. in FY 2001 (65 FR 47064); or in FY 2002 (66 FR
programs and other communication
• 60.96, Transurethral destruction of 39852). In the FY 2003 final rule (67 FR 49999) we techniques with a view toward
prostate tissue by microwave did not move any procedures from DRG 477. standardizing coding applications and
However, we did move procedure codes from DRG upgrading the quality of the
thermotherapy. 468 and placed them in more clinically coherent
classification system.
• 60.97, Other transurethral DRGs. In the FY 2004 final rule (68 FR 45365), we
The Official Version of the ICD–9–CM
destruction of prostate tissue by other moved several procedures from DRG 468 to DRGs
476 and 477 because the procedures are contains the list of valid diagnosis and
thermotherapy. nonextensive. In the FY 2005 final rule (69 FR procedure codes. (The Official Version
• 60.99, Other operations on prostate. 48950), we moved one procedure from DRG 468 to
of the ICD–9–CM is available from the
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23580 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
an asterisk (*). beginning with discharges occurring on obtain the new code books and encoder
Copies of the minutes of the or after October 1, 2008. Table 6D updates, and make other system changes
procedure codes discussions at the contains invalid procedure codes. These in order to identify and report the new
Committee’s September 27–28, 2007 invalid procedure codes will not be codes.
meeting can be obtained from the CMS recognized by the GROUPER beginning The ICD–9–CM Coordination and
Web site at: http://cms.hhs.gov/ with discharges occurring on or after Maintenance Committee holds its
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meetings in the spring and fall in order technology process. The participants at code to the same DRG in which its
to update the codes and the applicable the meeting and those reviewing the predecessor code was assigned so there
payment and reporting systems by Committee meeting summary report are will be no DRG impact as far as DRG
October 1 of each year. Items are placed provided the opportunity to comment assignment. Any midyear coding
on the agenda for the ICD–9–CM on this expedited request. All other updates will be available through the
Coordination and Maintenance topics are considered for the October 1 Web sites indicated above and through
Committee meeting if the request is update. Participants at the Committee the Coding Clinic for ICD–9–CM.
received at least 2 months prior to the meeting are encouraged to comment on Publishers and software vendors
meeting. This requirement allows time all such requests. There were no currently obtain code changes through
for staff to review and research the requests approved for an expedited these sources in order to update their
coding issues and prepare material for April l, 2008 implementation of an ICD– code books and software systems. We
discussion at the meeting. It also allows 9–CM code at the September 27–28, will strive to have the April 1 updates
time for the topic to be publicized in 2007 Committee meeting. Therefore, available through these Web sites 5
meeting announcements in the Federal there were no new ICD–9–CM codes months prior to implementation (that is,
Register as well as on the CMS Web site. implemented on April 1, 2008. early November of the previous year), as
The public decides whether or not to We believe that this process captures is the case for the October 1 updates.
attend the meeting based on the topics the intent of section 1886(d)(5)(K)(vii) of
the Act. This requirement was included H. Recalibration of MS–DRG Weights
listed on the agenda. Final decisions on
code title revisions are currently made in the provision revising the standards In section II.E. of the preamble of this
by March 1 so that these titles can be and process for recognizing new proposed rule, we state that we are
included in the IPPS proposed rule. A technology under the IPPS. In addition, proposing to fully implement the cost-
complete addendum describing details the need for approval of new codes based DRG relative weights for FY 2009,
of all changes to ICD–9–CM, both outside the existing cycle (October 1) which is the third year in the 3-year
tabular and index, is published on the arises most frequently and most acutely transition period to calculate the
CMS and NCHS Web sites in May of where the new codes will identify new relative weights at 100 percent based on
each year. Publishers of coding books technologies that are (or will be) under costs. In the FY 2008 IPPS final rule
and software use this information to consideration for new technology add- with comment period (72 FR 47267), as
modify their products that are used by on payments. Thus, we believe this recommended by RTI, for FY 2008, we
health care providers. This 5-month provision was intended to expedite data added two new CCRs for a total of 15
time period has proved to be necessary collection through the assignment of CCRs: one for ‘‘Emergency Room’’ and
for hospitals and other providers to new ICD–9–CM codes for new one for ‘‘Blood and Blood Products,’’
update their systems. technologies seeking higher payments. both of which can be derived directly
A discussion of this timeline and the Current addendum and code title from the Medicare cost report.
need for changes are included in the information is published on the CMS In developing the FY 2009 proposed
December 4–5, 2005 ICD–9–CM Web site at: www.cms.hhs.gov/ system of weights, we used two data
Coordination and Maintenance icd9ProviderDiagnosticCodes/ sources: claims data and cost report
Committee minutes. The public agreed 01_overview.asp#TopofPage. data. As in previous years, the claims
that there was a need to hold the fall Information on ICD–9–CM diagnosis data source is the MedPAR file. This file
meetings earlier, in September or codes, along with the Official ICD–9– is based on fully coded diagnostic and
October, in order to meet the new CM Coding Guidelines, can be found on procedure data for all Medicare
implementation dates. The public the Web site at: www.cdc.gov/nchs/ inpatient hospital bills. The FY 2007
provided comment that additional time icd9.htm. Information on new, revised, MedPAR data used in this proposed rule
would be needed to update hospital and deleted ICD–9–CM codes is also include discharges occurring on October
systems and obtain new code books and provided to the AHA for publication in 1, 2006, through September 30, 2007,
coding software. There was considerable the Coding Clinic for ICD–9–CM. AHA based on bills received by CMS through
concern expressed about the impact this also distributes information to December 2007, from all hospitals
new April update would have on publishers and software vendors. subject to the IPPS and short-term, acute
providers. CMS also sends copies of all ICD–9– care hospitals in Maryland (which are
In the FY 2005 IPPS final rule, we CM coding changes to its contractors for under a waiver from the IPPS under
implemented section 1886(d)(5)(K)(vii) use in updating their systems and section 1814(b)(3) of the Act). The FY
of the Act, as added by section 503(a) providing education to providers. 2007 MedPAR file used in calculating
of Pub. L. 108–173, by developing a These same means of disseminating the relative weights includes data for
mechanism for approving, in time for information on new, revised, and approximately 11,433,806 Medicare
the April update, diagnosis and deleted ICD–9–CM codes will be used to discharges from IPPS providers.
procedure code revisions needed to notify providers, publishers, software Discharges for Medicare beneficiaries
describe new technologies and medical vendors, contractors, and others of any enrolled in a Medicare Advantage
services for purposes of the new changes to the ICD–9–CM codes that are managed care plan are excluded from
technology add-on payment process. We implemented in April. The code titles this analysis. The data exclude CAHs,
also established the following process are adopted as part of the ICD–9–CM including hospitals that subsequently
for making these determinations. Topics Coordination and Maintenance became CAHs after the period from
considered during the Fall ICD–9–CM Committee process. Thus, although we which the data were taken. The second
Coordination and Maintenance publish the code titles in the IPPS data source used in the cost-based
Committee meeting are considered for proposed and final rules, they are not relative weighting methodology is the
jlentini on PROD1PC65 with PROPOSALS2
an April 1 update if a strong and subject to comment in the proposed or FY 2006 Medicare cost report data files
convincing case is made by the final rules. We will continue to publish from HCRIS (that is, cost reports
requester at the Committee’s public the October code updates in this manner beginning on or after October 1, 2005,
meeting. The request must identify the within the IPPS proposed and final and before October 1, 2006), which
reason why a new code is needed in rules. For codes that are implemented in represents the most recent full set of
April for purposes of the new April, we will assign the new procedure cost report data available. We used the
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23582 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
December 31, 2007 update of the HCRIS from the prospective payment rate, it is charges per case and the total charges
cost report files for FY 2006 in setting necessary to subtract the acquisition per day for each DRG.
the relative cost-based weights. charges from the total charges on each Once the MedPAR data were trimmed
The methodology we used to calculate transplant bill that showed acquisition and the statistical outliers were
the DRG cost-based relative weights charges before computing the average removed, the charges for each of the 15
from the FY 2007 MedPAR claims data cost for each DRG and before cost groups for each claim were
and FY 2006 Medicare cost report data eliminating statistical outliers. standardized to remove the effects of
is as follows: • Claims with total charges or total differences in area wage levels, IME and
• To the extent possible, all the length of stay less than or equal to zero DSH payments, and for hospitals in
claims were regrouped using the were deleted. Claims that had an Alaska and Hawaii, the applicable cost-
proposed FY 2009 MS–DRG amount in the total charge field that of-living adjustment. Because hospital
classifications discussed in sections II.B. differed by more than $10.00 from the charges include charges for both
and G. of the preamble of this proposed sum of the routine day charges, operating and capital costs, we
rule. intensive care charges, pharmacy standardized total charges to remove the
• The transplant cases that were used charges, special equipment charges, effects of differences in geographic
to establish the relative weights for heart therapy services charges, operating adjustment factors, cost-of-living
and heart-lung, liver and/or intestinal, room charges, cardiology charges, adjustments, DSH payments, and IME
and lung transplants (MS–DRGs 001, laboratory charges, radiology charges, adjustments under the capital IPPS as
002, 005, 006, and 007, respectively) other service charges, labor and delivery well. Charges were then summed by
were limited to those Medicare- charges, inhalation therapy charges, DRG for each of the 15 cost groups so
approved transplant centers that have emergency room charges, blood charges, that each DRG had 15 standardized
cases in the FY 2007 MedPAR file. and anesthesia charges were also charge totals. These charges were then
(Medicare coverage for heart, heart-lung, deleted. adjusted to cost by applying the national
liver and/or intestinal, and lung • At least 96.1 percent of the average CCRs developed from the FY
transplants is limited to those facilities providers in the MedPAR file had 2006 cost report data.
that have received approval from CMS charges for 10 of the 15 cost centers. The 15 cost centers that we used in
as transplant centers.) Claims for providers that did not have the relative weight calculation are
• Organ acquisition costs for kidney, charges greater than zero for at least 10 shown in the following table. The table
heart, heart-lung, liver, lung, pancreas, of the 15 cost centers were deleted. shows the lines on the cost report and
and intestinal (or multivisceral organs) • Statistical outliers were eliminated the corresponding revenue codes that
transplants continue to be paid on a by removing all cases that were beyond we used to create the 15 national cost
reasonable cost basis. Because these 3.0 standard deviations from the mean center CCRs.
acquisition costs are paid separately of the log distribution of both the total BILLING CODE 4120–01–P
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BILLING CODE 4120–01–C year (365 days). We included hospitals than 10 or less than 0.01. We
We developed the national average
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center CCRs where the log of the cost Group CCR contain fewer than 10 cases. Under the
center CCR was greater or less than the MS–DRGs, we have fewer low-volume
mean log plus/minus 3 times the Routine Days .................................. 0.527 DRGs than under the CMS DRGs
standard deviation for the log of that Intensive Days ................................ 0.476 because we no longer have separate
cost center CCR. Once the cost report Drugs .............................................. 0.205
DRGs for patients age 0 to 17 years.
data were trimmed, we calculated a Supplies & Equipment .................... 0.341
Therapy Services ............................ 0.419 With the exception of newborns, we
Medicare-specific CCR. The Medicare-
Laboratory ....................................... 0.166 previously separated some DRGs based
specific CCR was determined by taking Operating Room ............................. 0.293 on whether the patient was age 0 to 17
the Medicare charges for each line item Cardiology ....................................... 0.186 years or age 17 years and older. Other
from Worksheet D–4 and deriving the Radiology ........................................ 0.171 than the age split, cases grouping to
Medicare-specific costs by applying the Emergency Room ........................... 0.291 these DRGs are identical. The DRGs for
hospital-specific departmental CCRs to Blood and Blood Products .............. 0.449
the Medicare-specific charges for each Other Services ................................ 0.419 patients age 0 to 17 years generally have
line item from Worksheet D–4. Once Labor & Delivery ............................. 0.482 very low volumes because children are
each hospital’s Medicare-specific costs Inhalation Therapy .......................... 0.198 typically ineligible for Medicare. In the
were established, we summed the total Anesthesia ...................................... 0.150 past, we have found that the low
Medicare-specific costs and divided by volume of cases for the pediatric DRGs
the sum of the total Medicare-specific As we explained in section II.E. of the could lead to significant year-to-year
charges to produce national average, preamble of this proposed rule, we are instability in their relative weights.
charge-weighted CCRs. proposing to complete our 2-year Although we have always encouraged
After we multiplied the total charges transition to the MS–DRGs. For FY non-Medicare payers to develop weights
for each DRG in each of the 15 cost 2008, the first year of the transition, 50 applicable to their own patient
centers by the corresponding national percent of the relative weight for an populations, we have heard frequent
average CCR, we summed the 15 ‘‘costs’’ MS–DRG was based on the two-thirds complaints from providers about the use
across each DRG to produce a total cost-based weight/one-third charge- of the Medicare relative weights in the
standardized cost for the DRG. The based weight calculated using FY 2006 pediatric population. We believe that
average standardized cost for each DRG MedPAR data grouped to the Version eliminating this age split in the MS–
was then computed as the total 24.0 (FY 2007) DRGs. The remaining 50 DRGs will provide more stable payment
standardized cost for the DRG divided percent of the FY 2008 relative weight
for pediatric cases by determining their
by the transfer-adjusted case count for for an MS–DRG was based on the two-
payment using adult cases that are
the DRG. The average cost for each DRG thirds cost-based weight/one-third
much higher in total volume. All of the
was then divided by the national charge-based weight calculated using
FY 2006 MedPAR grouped to the low-volume MS–DRGs listed below are
average standardized cost per case to
determine the relative weight. Version 25.0 (FY 2008) MS–DRGs. In FY for newborns. Newborns are unique and
2009, we are proposing that the relative require separate DRGs that are not
The new cost-based relative weights
were then normalized by an adjustment weights will be based on 100 percent mirrored in the adult population.
factor of 1.50612 so that the average case cost weights computed using the Therefore, it remains necessary to retain
weight after recalibration was equal to Version 26.0 (FY 2009) MS–DRGs. separate DRGs for newborns. In FY
the average case weight before When we recalibrated the DRG 2009, because we do not have sufficient
recalibration. The normalization weights for previous years, we set a MedPAR data to set accurate and stable
adjustment is intended to ensure that threshold of 10 cases as the minimum cost weights for these low-volume MS–
recalibration by itself neither increases number of cases required to compute a DRGs, we are proposing to compute
nor decreases total payments under the reasonable weight. We are proposing to weights for the low-volume MS–DRGs
IPPS, as required by section use that same case threshold in by adjusting their FY 2008 weights by
1886(d)(4)(C)(iii) of the Act. recalibrating the MS–DRG weights for the percentage change in the average
The 15 proposed national average FY 2009. Using the FY 2007 MedPAR weight of the cases in other MS–DRGs.
CCRs for FY 2009 are as follows: data set, there are 8 MS–DRGs that The crosswalk table is shown below:
768 ................ Vaginal Delivery with O.R. Procedure Except Sterilization and/ FY 2008 FR weight (adjusted by percent change in average
or D&C. weight of the cases in other MS–DRGs).
789 ................ Neonates, Died or Transferred to Another Acute Care Facility FY 2008 FR weight (adjusted by percent change in average
weight of the cases in other MS–DRGs).
790 ................ Extreme Immaturity or Respiratory Distress Syndrome, FY 2008 FR weight (adjusted by percent change in average
Neonate. weight of the cases in other MS–DRGs).
791 ................ Prematurity with Major Problems ................................................ FY 2008 FR weight (adjusted by percent change in average
weight of the cases in other MS–DRGs).
792 ................ Prematurity without Major Problems ........................................... FY 2008 FR weight (adjusted by percent change in average
weight of the cases in other MS–DRGs).
793 ................ Full-Term Neonate with Major Problems .................................... FY 2008 FR weight (adjusted by percent change in average
weight of the cases in other MS–DRGs).
794 ................ Neonate with Other Significant Problems ................................... FY 2008 FR weight (adjusted by percent change in average
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23590 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
I. Proposed Medicare Severity Long- all references to LTC–DRGs would be Diseases, Ninth Revision, Clinical
Term Care (MS–LTC–DRG) considered a reference to MS–LTC– Modification (ICD–9–CM). HIPAA
Reclassifications and Relative Weights DRGs. For the remainder of this section, Transactions and Code Sets Standards
for LTCHs for FY 2009 we present the discussion in terms of regulations at 45 CFR Parts 160 and 162
the current MS–LTC–DRG patient require that no later than October 16,
1. Background
classification unless specifically 2003, all covered entities must comply
Section 123 of the BBRA requires that referring to the previous LTC–DRG with the applicable requirements of
the Secretary implement a PPS for patient classification system (that was in Subparts A and I through R of Part 162.
LTCHs (that is, a per discharge system effect before October 1, 2007).) We Among other requirements, those
with a diagnosis-related group (DRG)- believe the MS–DRGs (and by extension, provisions direct covered entities to use
based patient classification system the MS–LTC–DRGs) represent a the ASC X12N 837 Health Care Claim:
reflecting the differences in patient substantial improvement over the Institutional, Volumes 1 and 2, Version
resources and costs). Section 307(b)(1) previous CMS DRGs in their ability to 4010, and the applicable standard
of the BIPA modified the requirements differentiate cases based on severity of medical data code sets for the
of section 123 of the BBRA by requiring illness and resource consumption. institutional health care claim or
that the Secretary examine ‘‘the The MS–DRGs represent an increase equivalent encounter information
feasibility and the impact of basing in the number of DRGs by 207 (that is, transaction (see 45 CFR 162.1002 and 45
payment under such a system [the long- from 538 to 745) (72 FR 47171). In CFR 162.1102). For additional
term care hospital (LTCH) PPS] on the addition to improving the DRG system’s information on the ICD–9–CM Coding
use of existing (or refined) hospital recognition of severity of illness, we System, we refer readers to the FY 2008
DRGs that have been modified to believe the MS–DRGs are responsive to IPPS final rule with comment period (72
account for different resource use of the public comments that were made on FR 47241 through 47243 and 47277
LTCH patients, as well as the use of the the FY 2007 IPPS proposed rule with through 47281). We also refer readers to
most recently available hospital respect to how we should undertake the detailed discussion on correct
discharge data.’’ further DRG reform. The MS–DRGs use coding practices in the August 30, 2002
When the LTCH PPS was the CMS DRGs as the starting point for LTCH PPS final rule (67 FR 55981
implemented for cost reporting periods revising the DRG system to better through 55983). Additional coding
beginning on or after October 1, 2002, recognize resource complexity and instructions and examples are published
we adopted the same DRG patient severity of illness. We have generally in the Coding Clinic for ICD–9–CM, a
classification system (that is, the CMS retained all of the refinements and product of the American Hospital
DRGs) that was utilized at that time Association.
improvements that have been made to
under the IPPS. As a component of the Medicare contractors (that is, fiscal
the base DRGs over the years that
LTCH PPS, we refer to the patient intermediaries or MACs) enter the
recognize the significant advancements
classification system as the ‘‘long-term clinical and demographic information
in medical technology and changes to
care diagnosis-related groups (LTC– into their claims processing systems and
medical practice.
DRGs).’’ As discussed in greater detail Consistent with section 123 of the subject this information to a series of
below, although the patient BBRA as amended by section 307(b)(1) automated screening processes called
classification system used under both of the BIPA and § 412.515, we use the Medicare Code Editor (MCE). These
the LTCH PPS and the IPPS are the screens are designed to identify cases
information derived from LTCH PPS
same, the relative weights are different. that require further review before
patient records to classify LTCH
The established relative weight assignment into a MS–LTC–DRG can be
discharges into distinct MS–LTC–DRGs
methodology and data used under the made. During this process, the following
based on clinical characteristics and
LTCH PPS result in LTC–DRG relative types of cases are selected for further
estimated resource needs. We then
weights that reflect ‘‘the differences in development:
assign an appropriate weight to the MS–
patient resource use * * *’’ of LTCH
LTC–DRGs to account for the difference • Cases that are improperly coded.
patients (section 123(a)(1) of the BBRA (For example, diagnoses are shown that
in resource use by patients exhibiting
(Pub. L. 106–113). As part of our efforts are inappropriate, given the sex of the
the case complexity and multiple
to better recognize severity of illness patient. Code 68.69 (Other and
among patients, in the FY 2008 IPPS medical problems characteristic of
LTCHs. unspecified radical abdominal
final rule with comment period (72 FR hysterectomy) would be an
Generally, under the LTCH PPS, a
47130), the MS–DRGs and the Medicare inappropriate code for a male.)
Medicare payment is made at a
severity long-term care diagnosis related
predetermined specific rate for each • Cases including surgical procedures
groups (MS–LTC–DRGs) were adopted not covered under Medicare. (For
discharge; and that payment varies by
for the IPPS and the LTCH PPS, example, organ transplant in a
the MS–LTC–DRG to which a
respectively, effective October 1, 2007 nonapproved transplant center.)
beneficiary’s stay is assigned. Cases are
(FY 2008). For a full description of the • Cases requiring more information.
development and implementation of the classified into MS–LTC–DRGs for
(For example, ICD–9–CM codes are
MS–DRGs and MS–LTC–DRGs, we refer payment based on the following six data
required to be entered at their highest
readers to the FY 2008 IPPS final rule elements:
• Principal diagnosis. level of specificity. There are valid 3-
with comment period (72 FR 47141 • Up to eight additional diagnoses. digit, 4-digit, and 5-digit codes. That is,
through 47175 and 47277 through • Up to six procedures performed. code 262 (Other severe protein-calorie
47299). (We note that, in that same final • Age. malnutrition) contains all appropriate
rule, we revised the regulations at • Sex. digits, but if it is reported with either
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§ 412.503 to specify that for LTCH • Discharge status of the patient. fewer or more than 3 digits, the claim
discharges occurring on or after October Upon the discharge of the patient will be rejected by the MCE as invalid.)
1, 2007, when applying the provisions from a LTCH, the LTCH must assign After screening through the MCE,
of 42 CFR Part 412, Subpart O appropriate diagnosis and procedure each claim is classified into the
applicable to LTCHs for policy codes from the most current version of appropriate MS–LTC–DRG by the
descriptions and payment calculations, the International Classification of Medicare LTCH GROUPER software.
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The Medicare GROUPER software, of the LTCH PPS payment rates year (October 1 and April 1) as required
which is used under the LTCH PPS, is (currently updated on a rate year basis, by the statute for the IPPS. Section
specialized computer software, and is effective July 1) as well as the 503(a) of Pub. L. 108–173 amended
the same GROUPER software program development of the LTC–DRG weights section 1886(d)(5)(K) of the Act by
used under the IPPS. The GROUPER (currently updated on a fiscal year basis, adding a new clause (vii) which states
software was developed as a means of effective October 1), we proposed to that ‘‘the Secretary shall provide for the
classifying each case into a MS–LTC– amend the regulations at § 412.535 in addition of new diagnosis and
DRG on the basis of diagnosis and order to consolidate the rate year and procedure codes in [sic] April 1 of each
procedure codes and other demographic fiscal year rulemaking cycles. year, but the addition of such codes
information (age, sex, and discharge Specifically, we proposed that the shall not require the Secretary to adjust
status). Following the MS–LTC–DRG annual update of the LTCH PPS the payment (or diagnosis-related group
assignment, the Medicare contractor payment rates (and description of the classification) * * * until the fiscal year
determines the prospective payment methodology and data used to calculate that begins after such date.’’ This
amount by using the Medicare PRICER these payment rates) and the annual requirement improves the recognition of
program, which accounts for hospital- update of the MS–LTC–DRG new technologies under the IPPS by
specific adjustments. Under the LTCH classifications and associated weighting accounting for those ICD–9–CM codes
PPS, we provide an opportunity for the factors for LTCHs would be effective on in the MedPAR claims data earlier than
LTCH to review the MS–LTC–DRG October 1 each Federal fiscal year. In the agency had accounted for new
assignments made by the Medicare order to revise the payment rate update technology in the past. In implementing
contractor and to submit additional (currently on a rate year cycle of July 1 the statutory change, the agency has
information within a specified through June 30) to an October 1 provided that ICD–9–CM diagnosis and
timeframe as specified in § 412.513(c). through September 30 cycle, we procedure codes for new medical
The GROUPER software is used both proposed to extend the 2009 rate period technology may be created and assigned
to classify past cases to measure relative to September 30, 2009, so that RY 2009 to existing DRGs in the middle of the
hospital resource consumption to would be 15 months. This proposed 15- Federal fiscal year, on April 1. However,
establish the DRG weights and to month rate period would extend from this policy change will not impact the
classify current cases for purposes of July 1, 2008, through September 30, DRG relative weights in effect for that
determining payment. The records for 2009. We believe that extending RY year, which will continue to be updated
all Medicare hospital inpatient 2009 by 3 months (July, August, and only once a year (October 1). The use of
discharges are maintained in the September) would provide for a smooth the ICD–9–CM code set is also
MedPAR file. The data in this file are transition to a consolidated annual compliant with the current
used to evaluate possible MS–DRG update for both the LTCH PPS payment requirements of the Transactions and
classification changes and to recalibrate rates and the LTCH PPS MS–LTC–DRG Code Sets Standards regulations at 45
the MS–DRG and MS–LTC–DRG relative classifications and weighting factors. CFR Parts 160 and 162, promulgated in
weights during our annual update under (We believe that proposing to shorten accordance with HIPAA.
both the IPPS (§ 412.60(e)) and the the 2009 rate year period to an October As noted above, the patient
LTCH PPS (§ 412.517), respectively. 1 through September 30 period so that classification system used under the
In the June 6, 2003 LTCH PPS final LTCH PPS is the same patient
RY 2009 would only be 3 months (that
rule (68 FR 34122), we changed the classification system that is used under
is, July 1, 2008 through September 30,
LTCH PPS annual payment rate update the IPPS. Therefore, the ICD–9–CM
2008) would exacerbate the current
cycle to be effective July 1 through June codes currently used under both the
time-consuming, biannual update
30 instead of October 1 through IPPS and the LTCH PPS have the
September 30. In addition, because the process by resulting in two payment rate
potential of being updated twice a year.
patient classification system utilized changes within a very short period of
This requirement is included as part of
under the LTCH PPS uses the same time.) Consequently, under the proposal
the amendments to the Act relating to
DRGs as those used under the IPPS for to extend RY 2009 to a 15-month rate
recognition of new medical technology
acute care hospitals, in that same final period, after September 30, 2009, when
under the IPPS.
rule, we explained that the annual the RY 2009 cycle ends, the LTCH PPS Because we do not publish a midyear
update of the LTC–DRG classifications payment rates and other policy changes IPPS rule, any April 1 ICD–9–CM
and relative weights will continue to would subsequently be updated on an coding update will not be published in
remain linked to the annual October 1 through September 30 cycle the Federal Register. Rather, we will
reclassification and recalibration of the in conjunction with the annual update assign any new diagnosis or procedure
DRGs used under the IPPS. Therefore, to the MS–LTC–DRG classifications and codes to the same DRG in which its
we specified that we will continue to relative weights. Accordingly, the next predecessor code was assigned, so that
update the LTC–DRG classifications and update to the LTCH PPS payment rates, there will be no impact on the DRG
relative weights to be effective for after the proposed 15-month RY 2009, assignments (as also discussed in
discharges occurring on or after October would begin October 1, 2009, coinciding section II.G.11. of the preamble of this
1 through September 30 each year. We with the 2010 Federal fiscal year. proposed rule). Any coding updates will
further stated that we will publish the In the past, the annual update to the be available through the Web sites
annual proposed and final update of the DRGs used under the IPPS has been provided in section II.G.11. of the
LTC–DRGs in same notice as the based on the annual revisions to the preamble of this proposed rule and
proposed and final update for the IPPS ICD–9–CM codes and was effective each through the Coding Clinic for ICD–9–
(69 FR 34125). October 1. As discussed in the RY 2009 CM. Publishers and software vendors
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In the RY 2009 LTCH PPS proposed LTCH PPS proposed rule (73 FR 5348– currently obtain code changes through
rule (73 FR 5351–5352), due to 5349), with the implementation of these sources in order to update their
administrative considerations as well as section 503(a) of Pub. L. 108–173, there code books and software system. If new
in response to numerous comments is the possibility that one feature of the codes are implemented on April 1,
urging CMS to establish one rulemaking GROUPER software program may be revised code books and software
cycle that would encompass the update updated twice during a Federal fiscal systems, including the GROUPER
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23592 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
software program, will be necessary LTCHs that is a per discharge system medical problems characteristic of
because the most current ICD–9–CM with a DRG-based patient classification LTCH patients. (Unless otherwise noted
codes must be reported. Therefore, for system reflecting the differences in in this proposed rule, our MS–LTC–
purposes of the LTCH PPS, because patient resources and costs in LTCHs. DRG analysis is based on LTCH data
each ICD–9–CM code must be included Section 307(b)(1) of Pub. L. 106–554 from the December 2007 update of the
in the GROUPER algorithm to classify modified the requirements of section FY 2007 MedPAR file, which contains
each case under the correct LTCH PPS, 123 of Pub. L. 106–113 by specifically hospital bills received through
the GROUPER software program used requiring that the Secretary examine December 31, 2007, for discharges
under the LTCH PPS would need to be ‘‘the feasibility and the impact of basing occurring in FY 2007.)
revised to accommodate any new codes. payment under such a system [the LTCHs do not typically treat the full
In implementing section 503(a) of LTCH PPS] on the use of existing (or range of diagnoses as do acute care
Pub. L. 108–173, there will only be an refined) hospital diagnosis-related hospitals. Therefore, as we discussed in
April 1 update if new technology groups (DRGs) that have been modified the August 30, 2002 LTCH PPS final
diagnosis and procedure code revisions to account for different resource use of rule (67 FR 55985), which implemented
are requested and approved. We note long-term care hospital patients as well the LTCH PPS, and the FY 2008 IPPS
that any new codes created for April 1 as the use of the most recently available final rule with comment period (72 FR
implementation will be limited to those hospital discharge data.’’ 47283), we use low-volume quintiles in
primarily needed to describe new Consistent with section 123 of Pub. L. determining the DRG relative weights
technologies and medical services. 106–113 as amended by section for DRGs with less than 25 LTCH cases
However, we reiterate that the process 307(b)(1) of Pub. L. 106–554 and (low-volume MS–LTC–DRGs).
of discussing updates to the ICD–9–CM § 412.515 of our existing regulations, the Specifically, we group those low-
is an open process through the ICD–9– LTCH PPS uses information from LTCH volume DRGs into 5 quintiles based on
CM Coordination and Maintenance patient records to classify patient cases average charges per discharge. (A listing
Committee. Requestors will be given the into distinct LTC–DRGs based on of the composition of low-volume
opportunity to present the merits for a clinical characteristics and expected quintiles for the FY 2008 MS–LTC–
new code and to make a clear and resource needs. As described in section DRGs (based on FY 2006 MedPAR data)
convincing case for the need to update II.D. of the preamble of this proposed appears in section II.I.3. of the FY 2008
ICD–9–CM codes for purposes of the rule, for FY 2008, we adopted MS–DRGs IPPS final rule with comment period (72
IPPS new technology add-on payment under the IPPS because we believe that FR 47281 through 47288).) We also
process through an April 1 update (as this system results in a significant adjust for cases in which the stay at the
also discussed in section II.G.11. of the improvement in the DRG system’s LTCH is less than or equal to five-sixths
preamble of this proposed rule). recognition of severity of illness and of the geometric average length of stay;
At the September 27, 2007 ICD–9–CM resource usage. We stated that we that is, short-stay outlier cases, as
Coordination and Maintenance believe these improvements in the DRG discussed below in section II.I.4. of the
Committee meeting, there were no system are equally applicable to the preamble of this proposed rule.
requests for an April 1, 2008 LTCH PPS. The changes we are
b. Patient Classifications Into MS–LTC–
implementation of ICD–9–CM codes. proposing to make for the FY 2009 IPPS
DRGs
Therefore, the next update to the ICD– are reflected in the proposed FY 2009
GROUPER, Version 26.0, that would be Generally, under the LTCH PPS,
9–CM coding system will occur on Medicare payment is made at a
October 1, 2008 (FY 2009). Because effective for discharges occurring on or
after October 1, 2008 through September predetermined specific rate for each
there were no coding changes suggested discharge; that is, payment varies by the
for an April 1, 2008 update, the ICD–9– 30, 2009.
Consistent with our historical practice DRG to which a beneficiary’s stay is
CM coding set implemented on October assigned. Just as cases have been
of having LTC–DRGs correspond to the
1, 2008, will continue through classified into the MS–DRGs for acute
DRGs applicable under the IPPS, under
September 30, 2009 (FY 2009). The care hospitals under the IPPS (section
the broad authority of section 123(a) of
update to the ICD–9–CM coding system II.B. of the preamble of this proposed
Pub. L. 106–113, as modified by section
for FY 2009 is discussed in section rule), cases have been classified into
307(b) of Pub. L. 106–554, under the
II.G.11. of the preamble of this proposed LTCH PPS for FY 2008, we adopted the MS–LTC–DRGs for payment under the
rule. Accordingly, in this proposed rule, use of MS–LTC–DRGs, which LTCH PPS based on the principal
as discussed in greater detail below, we correspond to the MS–DRGs we adopted diagnosis, up to eight additional
are proposing to modify and revise the under the IPPS. In addition, as stated diagnoses, and up to six procedures
MS–LTC–DRG classifications and above, we are proposing to use the FY performed during the stay, as well as
relative weights to be effective October 2009 GROUPER Version 26.0 to classify demographic information about the
1, 2008 through September 30, 2009 (FY cases effective for LTCH discharges patient. The diagnosis and procedure
2009). As discussed in greater detail occurring on or after October 1, 2008, information is reported by the hospital
below, the MS–LTC–DRGs for FY 2009 through September 30, 2009. The using the ICD–9–CM coding system.
in this proposed rule are the same as the changes to the MS–DRG classification Under the MS–DRGs for the IPPS and
MS–DRGs proposed for the IPPS for FY system that we are proposing to use the MS–LTC–DRGs for the LTCH PPS,
2009 (GROUPER Version 26.0) under the IPPS for FY 2009 (GROUPER these factors will not change.
discussed in section II.B. of the Version 26.0) are discussed in section Section II.B. of the preamble of this
preamble to this proposed rule. II.B. of the preamble to this proposed proposed rule discusses the
2. Proposed Changes in the MS–LTC– rule. organization of the existing MS–DRGs,
jlentini on PROD1PC65 with PROPOSALS2
DRG Classifications Under the LTCH PPS, as described in which we are maintaining under the
greater detail below, we determine MS–LTC–DRG system. As noted above,
a. Background relative weights for each of the MS– the patient classification system for the
As discussed earlier, section 123 of LTC–DRGs to account for the difference LTCH PPS is derived from the IPPS
Pub. L. 106–113 specifically requires in resource use by patients exhibiting DRGs and is similarly organized into 25
that the agency implement a PPS for the case complexity and multiple major diagnostic categories (MDCs).
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Most of these MDCs are based on a and access to adequate care for those MS–LTC–DRG relative weights in the
particular organ system of the body and Medicare patients whose care is more final rule.
the remainder involves multiple organ costly. To accomplish these goals, we Consistent with our historical
systems (such as MDC 22, Burns). have annually adjusted the LTCH PPS methodology, we have excluded the
Accordingly, the principal diagnosis standard Federal prospective payment data from LTCHs that are all-inclusive
determines MDC assignment. Within system rate by the applicable relative rate providers and LTCHs that are
most MDCs, cases are then divided into weight in determining payment to reimbursed in accordance with
surgical DRGs and medical DRGs. Under LTCHs for each case. (As we have noted demonstration projects authorized
the MS–DRGs, some surgical and above, in last year’s final rule, we under section 402(a) of Pub. L. 90–248
medical DRGs are further defined for adopted the MS–LTC–DRGs for the or section 222(a) of Pub. L. 92–603 (We
severity purposes based on the presence LTCH PPS beginning in FY 2008. refer readers to the FY 2008 IPPS final
or absence of MCCs or CCs. The existing However, this change in the patient rule with comment period (72 FR
MS–LTC–DRGs are similarly classification system does not affect the 47282)). Therefore, in the development
categorized. (We refer readers to section basic principles of the development of of the proposed FY 2009 MS–LTC–DRG
II.B. of the preamble of this proposed relative weights under a DRG-based relative weights in this proposed rule,
rule for further discussion of surgical prospective payment system. we have excluded the data of the 17 all-
DRGs and medical DRGs.) Although the adoption of the MS– inclusive rate providers and the 2
Therefore, consistent with the MS– LTC–DRGs resulted in some LTCHs that are paid in accordance with
DRGs, a base MS–LTC–DRG may be modifications of existing procedures for demonstration projects that had claims
subdivided according to three assigning weights in cases of zero in the FY 2007 MedPAR file.
alternatives. The first alternative volume and/or nonmonotonicity, as c. Hospital-Specific Relative Value
includes division of the DRG into one, discussed in the FY 2008 IPPS final rule (HSRV) Methodology
two, or three severity levels. The most with comment period (72 FR 47289
severe level has cases with at least one By nature, LTCHs often specialize in
through 47295) and discussed in detail certain areas, such as ventilator-
code that is a major CC, referred to as in the following sections, the basic dependent patients and rehabilitation
‘‘with MCC’’. The next lower severity methodology for developing the and wound care. Some case types
level contains cases with at least one proposed FY 2009 MS–LTC–DRG (DRGs) may be treated, to a large extent,
CC, referred to as ‘‘with CC’’. Those relative weights in this proposed rule in hospitals that have, from a
DRGs without an MCC or a CC are continue to be determined in perspective of charges, relatively high
referred to as ‘‘without CC/MCC’’. When accordance with the general (or low) charges. This nonarbitrary
data do not support the creation of three methodology established in the August distribution of cases with relatively high
severity levels, the base DRG is divided 30, 2002 LTCH PPS final rule (67 FR (or low) charges in specific MS–LTC–
into either two levels or the base is not 55989 through 55991). Under the LTCH DRGs has the potential to
subdivided. PPS, relative weights for each MS–LTC– inappropriately distort the measure of
The two-level subdivisions consist of DRG are a primary element used to average charges. To account for the fact
one of the following subdivisions: ‘‘with account for the variations in cost per that cases may not be randomly
CC/MCC’’ or ‘‘without CC/MCC.’’ In this discharge and resource utilization distributed across LTCHs, we are
type of subdivision, cases with at least among the payment groups (§ 412.515). proposing to use a hospital-specific
one code that is on the CC or MCC list To ensure that Medicare patients relative value (HSRV) methodology to
are assigned to the ‘‘ CC/MCC’’ DRG. classified to each MS–LTC–DRG have calculate the MS–LTC–DRG relative
Cases without a CC or an MCC are access to an appropriate level of services weights instead of the methodology
assigned to the ‘‘without CC/MCC’’ and to encourage efficiency, we used to determine the MS–DRG relative
DRG. calculate a relative weight for each MS– weights under the IPPS described in
The other type of two-level LTC–DRG that represents the resources section II.H. of the preamble of this
subdivision is as follows: ‘‘with MCC’’ needed by an average inpatient LTCH proposed rule. We believe this method
and ‘‘without MCC.’’ In this type of case in that MS–LTC–DRG. For will remove this hospital-specific source
subdivision, cases with at least one code example, cases in an MS–LTC–DRG of bias in measuring LTCH average
that is on the MCC list are assigned to with a relative weight of 2 will, on charges. Specifically, we are proposing
the ‘‘with MCC’’ DRG. Cases that do not average, cost twice as much to treat as to reduce the impact of the variation in
have an MCC are assigned to the cases in an MS–LTC–DRG with a weight charges across providers on any
‘‘without MCC’’ DRG. This type of of 1. particular MS–LTC–DRG relative weight
subdivision could include cases with a by converting each LTCH’s charge for a
CC code, but no MCC. b. Data
case to a relative value based on that
3. Development of the Proposed FY To calculate the proposed MS–LTC– LTCH’s average charge.
2009 MS–LTC–DRG Relative Weights DRG relative weights for FY 2009, we Under the HSRV methodology, we
obtained total Medicare allowable standardize charges for each LTCH by
a. General Overview of Development of charges from FY 2007 Medicare LTCH converting its charges for each case to
the MS–LTC–DRG Relative Weights bill data from the December 2007 hospital-specific relative charge values
As we stated in the August 30, 2002 update of the MedPAR file, which are and then adjusting those values for the
LTCH PPS final rule (67 FR 55981), one the best available data at this time, and LTCH’s case-mix. The adjustment for
of the primary goals for the we used the proposed Version 26.0 of case-mix is needed to rescale the
implementation of the LTCH PPS is to the CMS GROUPER that is also hospital-specific relative charge values
jlentini on PROD1PC65 with PROPOSALS2
pay each LTCH an appropriate amount proposed for use under the IPPS to (which, by definition, average 1.0 for
for the efficient delivery of medical care classify cases for FY 2009. We also are each LTCH). The average relative weight
to Medicare patients. The system must proposing that if more recent data are for a LTCH is its case-mix, so it is
be able to account adequately for each available, we will use those data and the reasonable to scale each LTCH’s average
LTCH’s case-mix in order to ensure both finalized Version 26.0 of the CMS relative charge value by its case-mix. In
fair distribution of Medicare payments GROUPER in establishing the FY 2009 this way, each LTCH’s relative charge
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23594 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
value is adjusted by its case-mix to an annually) are grouped into quintiles weight; and (3) if an MS–LTC–DRG has
average that reflects the complexity of (described below) and assigned the no cases, it is crosswalked to another
the cases it treats relative to the weight of the quintile. No-volume MS– MS–LTC–DRG based upon clinical
complexity of the cases treated by all LTC–DRGs (that is, no cases in the similarities to assign an appropriate
other LTCHs (the average case-mix of all database were assigned to those MS– relative weight (as described below in
LTCHs). LTC–DRGs) are crosswalked to other detail in Step 5 of the Steps for
In accordance with the methodology MS–LTC–DRGs based on the clinical Determining the proposed FY 2009 MS–
established in the August 30, 2002 similarities and assigned the relative LTC–DRG Relative Weights).
LTCH PPS final rule (67 FR 55989 weight of the crosswalked MS–LTC– Furthermore, in determining the
through 55991), we continue to DRG. (We provide in-depth discussions proposed FY 2009 MS–LTC–DRG
standardize charges for each case by of our proposed policy regarding weight relative weights, when necessary, we are
first dividing the adjusted charge for the setting for low-volume MS–LTC–DRGs proposing to make adjustments to
case (adjusted for short-stay outliers in section II.I.3.e. of the preamble of this account for nonmonotonicity, as
under § 412.529 as described in section proposed rule and for no-volume MS– explained below.
II.I.4. (step 3) of the preamble of this LTC–DRGs, under Step 5 in section Theoretically, cases under the MS–
proposed rule) by the average adjusted II.I.4. of the preamble of this proposed LTC–DRG system that are more severe
charge for all cases at the LTCH in rule.) require greater expenditure of medical
which the case was treated. Short-stay As described above, in response to the care resources and will result in higher
outliers are cases with a length of stay need to account for severity and pay average charges. Therefore, in the three
that is less than or equal to five-sixths appropriately for cases, we developed a severity levels, weights should increase
the average length of stay of the MS– severity-adjusted patient classification with severity, from lowest to highest. If
LTC–DRG (§ 412.529 and § 412.503). system which we adopted for both the the weights do not increase (that is, if
The average adjusted charge reflects the IPPS and the LTCH PPS in FY 2008. As based on the relative weight
average intensity of the health care described in greater detail above, the methodology outlined above, the MS–
services delivered by a particular LTCH MS–LTC–DRG system can accommodate LTC–DRG with MCC would have a
and the average cost level of that LTCH. three severity levels: ‘‘with MCC’’ (most lower relative weight than one with CC,
The resulting ratio is multiplied by that severe); ‘‘with CC,’’ and ‘‘without CC/ or the MS–LTC–DRG without CC/MCC
LTCH’s case-mix index to determine the MCC’’ (the least severe) with each level would have a higher relative weight
standardized charge for the case. assigned an individual MS–LTC–DRG than either of the others), there is a
Multiplying by the LTCH’s case-mix number. In cases with two subdivisions, problem with monotonicity. Since the
index accounts for the fact that the same the levels are either ‘‘with CC/MCC’’ start of the LTCH PPS for FY 2003 (67
relative charges are given greater weight and ‘‘without CC/MCC’’ or ‘‘with MCC’’ FR 55990), we have adjusted the setting
at a LTCH with higher average costs and ‘‘without MCC’’. For example, of the LTC–DRG relative weights in
than they would at a LTCH with low under the MS–LTC–DRG system, order to maintain monotonicity by
average costs, which is needed to adjust multiple sclerosis and cerebellar ataxia grouping both sets of cases together and
each LTCH’s relative charge value to with MCC is MS–LTC–DRG 58; multiple establishing a new relative weight for
reflect its case-mix relative to the sclerosis and cerebellar ataxia with CC both LTC–DRGs. We continue to believe
average case-mix for all LTCHs. Because is MS–LTC–DRG 59; and multiple that utilizing nonmonotonic relative
we standardize charges in this manner, sclerosis and cerebellar ataxia without weights to adjust Medicare payments
we count charges for a Medicare patient CC/MCC is MS–LTC–DRG 60. For would result in inappropriate payments
at a LTCH with high average charges as purposes of discussion in this section, because, in a nonmonotonic system,
less resource intensive than they would the term ‘‘base DRG’’ is used to refer to cases that are more severe and require
be at a LTCH with low average charges. the DRG category that encompasses all greater expenditure of medical care
For example, a $10,000 charge for a case levels of severity for that DRG. For resources would be paid based on a
at a LTCH with an average adjusted example, when referring to the entire lower relative weight than cases that are
charge of $17,500 reflects a higher level DRG category for multiple sclerosis and less severe and require lower resource
of relative resource use than a $10,000 cerebellar ataxia, which includes the use. The procedure for dealing with
charge for a case at a LTCH with the above three severity levels, we would nonmonotonicity under the MS–LTC–
same case-mix, but an average adjusted use the term ‘‘base-DRG.’’ DRG classification system is discussed
charge of $35,000. We believe that the As noted above, while the LTCH PPS in greater detail below in section II.I.4.
adjusted charge of an individual case and the IPPS use the same patient (Step 6) of the preamble of this
more accurately reflects actual resource classification system, the methodology proposed rule.
use for an individual LTCH because the that is used to set the DRG weights for
use in each payment system differs e. Proposed Low-Volume MS–LTC–
variation in charges due to systematic
because the overall volume of cases in DRGs
differences in the markup of charges
among LTCHs is taken into account. the LTCH PPS is much less than in the In order to account for MS–LTC–
IPPS. As a general rule, consistent with DRGs with low volume (that is, with
d. Treatment of Severity Levels in the methodology we used when we fewer than 25 LTCH cases), consistent
Developing Proposed Relative Weights adopted the MS–LTC–DRGs in the FY with the methodology we established
Under the proposed MS–LTC–DRGs, 2008 IPPS final rule with comment when we implemented the LTCH PPS
for purposes of the proposed setting of period (72 FR 47278 through 47281), we (August 30, 2002; 67 FR 55984 through
the relative weights, there would be are proposing to determine the FY 2009 55995), we group those ‘‘low-volume
three different categories of DRGs based relative weights for the MS–LTC–DRGs MS–LTC–DRGs’’ (that is, MS–LTC–
jlentini on PROD1PC65 with PROPOSALS2
on volume of cases within specific MS– using the following steps: (1) if an MS– DRGs that contained between 1 and 24
LTC–DRGs. MS–LTC–DRGs with at least LTC–DRG has at least 25 cases, it is cases annually) into one of five
25 cases are each assigned a unique assigned its own relative weight; (2) if categories (quintiles) based on average
relative weight; low-volume MS–LTC– an MS–LTC–DRG has between 1 and 24 charges, for the purposes of determining
DRGs (that is, MS–LTC–DRGs that cases, it is assigned to a quintile for relative weights (72 FR 47283 through
contain between one and 24 cases which we will compute a relative 47288). In determining the proposed FY
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23595
2009 MS–LTC–DRG relative weights in average charge in accordance with our proposed MS–LTC–DRGs with low-
this proposed rule, we are proposing to established methodology. Specifically, volume for FY 2009, we are proposing
continue to employ this quintile for this proposed rule, the 290 proposed to use the five low-volume quintiles
methodology for proposed low-volume low-volume MS–LTC–DRGs are sorted described above. The composition of
MS–LTC–DRGs. In addition, in cases by ascending order by average charge each of the proposed five low-volume
where the initial assignment of a low- and assigned to a specific proposed low- quintiles shown in the chart below was
volume MS–LTC–DRG to quintiles volume quintile (as described below). used in determining the proposed MS–
results in nonmonotonicity within a After sorting the 290 proposed low- LTC–DRG relative weights for FY 2009
base DRG, in order to ensure volume MS–LTC–DRGs by average (Table 11 of the Addendum of this
appropriate Medicare payments, charge in ascending order, we are proposed rule). We would determine a
consistent with our historical proposing to group the first fifth (1st proposed relative weight and
methodology, we are proposing to make through 58th) of proposed low-volume (geometric) average length of stay for
adjustments to the treatment of low- MS–LTC–DRGs (with the lowest average each of the proposed five low-volume
volume MS–LTC–DRGs to preserve charge) into Quintile 1. This process is quintiles using the methodology that we
monotonicity, as discussed in detail repeated through the remaining are proposing to apply to the regular
below in section II.I.4 (Step 6 of the proposed low-volume MS–LTC–DRGs MS–LTC–DRGs (25 or more cases), as
methodology for determining the so that each of the 5 proposed low- described in section II.I.4. of the
proposed FY 2009 MS–LTC–DRG volume quintiles contains 58 proposed preamble of this proposed rule. We are
relative weights). In this proposed rule, MS–LTC–DRGs. The highest average proposing to assign the same relative
using LTCH cases from the December charge cases would be grouped into weight and average length of stay to
2007 update of the FY 2007 MedPAR Quintile 5. (We note that, consistent each of the proposed low-volume MS–
file, we identified 290 MS–LTC–DRGs with our historical methodology, if the LTC–DRGs that make up an individual
that contained between 1 and 24 cases. number of proposed low-volume MS– low-volume quintile. We note that, as
This list of proposed MS–LTC–DRGs LTC–DRGs had not been evenly this system is dynamic, it is possible
was then divided into one of the divisible by 5, we would have used the that the number and specific type of
proposed 5 low-volume quintiles, each average charge of the proposed low- MS–LTC–DRGs with a low volume of
containing 58 MS–LTC–DRGs (290/5 = volume MS–LTC–DRG to determine LTCH cases will vary in the future. We
58). We are proposing to make the which proposed low-volume quintile use the best available claims data in the
assignment of a low-volume MS–LTC– would have received the additional MedPAR file to identify low-volume
DRG to a specific low-volume quintile proposed low-volume MS–LTC–DRG.) MS–LTC–DRGs and to calculate the
by sorting the proposed low-volume Accordingly, in order to determine relative weights based on our
MS–LTC–DRGs in ascending order by the proposed relative weights for the methodology.
PROPOSED QUINTILE 1
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23596 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
544 ....................................... Pathological fractures & musculoskelet & conn tiss malig w/o CC/MCC.
547 ....................................... Connective tissue disorders w/o CC/MCC.
556 ....................................... Signs & symptoms of musculoskeletal system & conn tissue w/o MCC.
563 ....................................... Fx, sprn, strn & disl except femur, hip, pelvis & thigh w/o MCC.
601 ....................................... Non-malignant breast disorders w/o CC/MCC.
618 ....................................... Amputat of lower limb for endocrine, nutrit, & metabol dis w/o CC/MCC.
642 ....................................... Inborn errors of metabolism
645 ....................................... Endocrine disorders w/o CC/MCC.
694 ....................................... Urinary stones w/o esw lithotripsy w/o MCC.
723 ....................................... Malignancy, male reproductive system w CC.
726 ....................................... Benign prostatic hypertrophy w/o MCC.
730 ....................................... Other male reproductive system diagnoses w/o CC/MCC.
756 ....................................... Malignancy, female reproductive system w/o CC/MCC.
781 ....................................... Other antepartum diagnoses w medical complications.
810 ....................................... Major hematol/immun diag exc sickle cell crisis & coagul w/o CC/MCC.
816 ....................................... Reticuloendothelial & immunity disorders w/o CC/MCC.
864 ....................................... Fever of unknown origin.
869 ....................................... Other infectious & parasitic diseases diagnoses w/o CC/MCC.
880 ....................................... Acute adjustment reaction & psychosocial dysfunction.
882 ....................................... Neuroses except depressive.
886 ....................................... Behavioral & developmental disorders.
895 ....................................... Alcohol/drug abuse or dependence w rehabilitation therapy.
897 ....................................... Alcohol/drug abuse or dependence w/o rehabilitation therapy w/o MCC.
917 ....................................... Poisoning & toxic effects of drugs w MCC.
918 ....................................... Poisoning & toxic effects of drugs w/o MCC.
958 ....................................... Other O.R. procedures for multiple significant trauma w CC.
965 ....................................... Other multiple significant trauma w/o CC/MCC.
PROPOSED QUINTILE 2
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PROPOSED QUINTILE 3
23 ......................................... Craniotomy w major device implant or acute complex CNS PDX w MCC.***
27 ......................................... Craniotomy & endovascular intracranial procedures w/o CC/MCC.
53 ......................................... Spinal disorders & injuries w/o CC/MCC.
58 ......................................... Multiple sclerosis & cerebellar ataxia w MCC.
82 ......................................... Traumatic stupor & coma, coma >1 hr w MCC.
98 ......................................... Non-bacterial infect of nervous sys exc viral meningitis w CC.
113 ....................................... Orbital procedures w CC/MCC.
116 ....................................... Intraocular procedures w CC/MCC.
136 ....................................... Sinus & mastoid procedures w/o CC/MCC.***
152 ....................................... Otitis media & URI w MCC.
165 ....................................... Major chest procedures w/o CC/MCC.
168 ....................................... Other resp system O.R. procedures w/o CC/MCC.
238 ....................................... Major cardiovascular procedures w/o MCC.
241 ....................................... Amputation for circ sys disorders exc upper limb & toe w/o CC/MCC.
261 ....................................... Cardiac pacemaker revision except device replacement w CC.**
262 ....................................... Cardiac pacemaker revision except device replacement w/o CC/MCC.**
284 ....................................... Circulatory disorders w AMI, expired w CC.*
287 ....................................... Circulatory disorders except AMI, w card cath w/o MCC.
369 ....................................... Major esophageal disorders w CC.
370 ....................................... Major esophageal disorders w/o CC/MCC.
380 ....................................... Complicated peptic ulcer w MCC.
384 ....................................... Uncomplicated peptic ulcer w/o MCC.
424 ....................................... Other hepatobiliary or pancreas O.R. procedures w CC.
471 ....................................... Cervical spinal fusion w MCC.
472 ....................................... Cervical spinal fusion w CC.
476 ....................................... Amputation for musculoskeletal sys & conn tissue dis w/o CC/MCC.
482 ....................................... Hip & femur procedures except major joint w/o CC/MCC.
494 ....................................... Lower extrem & humer proc except hip, foot, femur w/o CC/MCC.
497 ....................................... Local excision & removal int fix devices exc hip & femur w/o CC/MCC.*
502 ....................................... Soft tissue procedures w/o CC/MCC.
504 ....................................... Foot procedures w CC.
505 ....................................... Foot procedures w/o CC/MCC.
510 ....................................... Shoulder, elbow or forearm proc, exc major joint proc w MCC.**
511 ....................................... Shoulder, elbow or forearm proc, exc major joint proc w CC.**
535 ....................................... Fractures of hip & pelvis w MCC.
542 ....................................... Pathological fractures & musculoskelet & conn tiss malig w MCC.
555 ....................................... Signs & symptoms of musculoskeletal system & conn tissue w MCC.
562 ....................................... Fx, sprn, strn & disl except femur, hip, pelvis & thigh w MCC.
598 ....................................... Malignant breast disorders w CC.
599 ....................................... Malignant breast disorders w/o CC/MCC.**
600 ....................................... Non-malignant breast disorders w CC/MCC.
626 ....................................... Thyroid, parathyroid & thyroglossal procedures w CC.
jlentini on PROD1PC65 with PROPOSALS2
630 ....................................... Other endocrine, nutrit & metab O.R. proc w/o CC/MCC.
665 ....................................... Prostatectomy w MCC.**
666 ....................................... Prostatectomy w CC.**
668 ....................................... Transurethral procedures w MCC.
686 ....................................... Kidney & urinary tract neoplasms w MCC.
687 ....................................... Kidney & urinary tract neoplasms w CC.
693 ....................................... Urinary stones w/o esw lithotripsy w MCC.
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23598 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
PROPOSED QUINTILE 4
23 ......................................... Craniotomy w major device implant or acute complex CNS PDX w MCC.**
24 ......................................... Craniotomy w major device implant or acute complex CNS PDX w/o MCC.**
28 ......................................... Spinal procedures w MCC.
29 ......................................... Spinal procedures w CC.
30 ......................................... Spinal procedures w/o CC/MCC.
37 ......................................... Extracranial procedures w MCC.
38 ......................................... Extracranial procedures w CC.**
42 ......................................... Periph & cranial nerve & other nerv syst proc w/o CC/MCC.*
77 ......................................... Hypertensive encephalopathy w MCC.
133 ....................................... Other ear, nose, mouth & throat O.R. procedures w CC/MCC.
164 ....................................... Major chest procedures w CC.
237 ....................................... Major cardiovascular procedures w MCC.
242 ....................................... Permanent cardiac pacemaker implant w MCC.***
246 ....................................... Percutaneous cardiovascular proc w drug-eluting stent w MCC.
247 ....................................... Percutaneous cardiovascular proc w drug-eluting stent w/o MCC.
248 ....................................... Percutaneous cardiovasc proc w non-drug-eluting stent w MCC.
249 ....................................... Percutaneous cardiovasc proc w non-drug-eluting stent w/o MCC.**
259 ....................................... Cardiac pacemaker device replacement w/o MCC.
260 ....................................... Cardiac pacemaker revision except device replacement w MCC.
262 ....................................... Cardiac pacemaker revision except device replacement w/o CC/MCC.***
286 ....................................... Circulatory disorders except AMI, w card cath w MCC.
327 ....................................... Stomach, esophageal & duodenal proc w CC.
328 ....................................... Stomach, esophageal & duodenal proc w/o CC/MCC.**
348 ....................................... Anal & stomal procedures w CC.
358 ....................................... Other digestive system O.R. procedures w/o CC/MCC.*
405 ....................................... Pancreas, liver & shunt procedures w MCC.
406 ....................................... Pancreas, liver & shunt procedures w CC.**
417 ....................................... Laparoscopic cholecystectomy w/o c.d.e. w MCC.***
466 ....................................... Revision of hip or knee replacement w MCC.
467 ....................................... Revision of hip or knee replacement w CC.
469 ....................................... Major joint replacement or reattachment of lower extremity w MCC.***
478 ....................................... Biopsies of musculoskeletal system & connective tissue w CC.
481 ....................................... Hip & femur procedures except major joint w CC.
485 ....................................... Knee procedures w pdx of infection w MCC.
486 ....................................... Knee procedures w pdx of infection w CC.
487 ....................................... Knee procedures w pdx of infection w/o CC/MCC.**
490 ....................................... Back & neck procedures except spinal fusion w CC/MCC or disc devices.
492 ....................................... Lower extrem & humer proc except hip, foot, femur w MCC.
493 ....................................... Lower extrem & humer proc except hip, foot, femur w CC.
503 ....................................... Foot procedures w MCC.
511 ....................................... Shoulder, elbow or forearm proc, exc major joint proc w CC.***
513 ....................................... Hand or wrist proc, except major thumb or joint proc w CC/MCC.
jlentini on PROD1PC65 with PROPOSALS2
514 ....................................... Hand or wrist proc, except major thumb or joint proc w/o CC/MCC.**
597 ....................................... Malignant breast disorders w MCC.
599 ....................................... Malignant breast disorders w/o CC/MCC.***
625 ....................................... Thyroid, parathyroid & thyroglossal procedures w MCC.
659 ....................................... Kidney & ureter procedures for non-neoplasm w MCC.
660 ....................................... Kidney & ureter procedures for non-neoplasm w CC.
666 ....................................... Prostatectomy w CC.***
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695 ....................................... Kidney & urinary tract signs & symptoms w MCC.
711 ....................................... Testes procedures w CC/MCC.
717 ....................................... Other male reproductive system O.R. proc exc malignancy w CC/MCC.
739 ....................................... Uterine, adnexa proc for non-ovarian/adnexal malig w MCC.
749 ....................................... Other female reproductive system O.R. procedures w CC/MCC.
754 ....................................... Malignancy, female reproductive system w MCC.
802 ....................................... Other O.R. proc of the blood & blood forming organs w MCC.
808 ....................................... Major hematol/immun diag exc sickle cell crisis & coagul w MCC.
823 ....................................... Lymphoma & non-acute leukemia w other O.R. proc w MCC.
896 ....................................... Alcohol/drug abuse or dependence w/o rehabilitation therapy w MCC.
909 ....................................... Other O.R. procedures for injuries w/o CC/MCC.*
928 ....................................... Full thickness burn w skin graft or inhal inj w CC/MCC.
933 ....................................... Extensive burns or full thickness burns w MV 96+ hrs w/o skin graft.
957 ....................................... Other O.R. procedures for multiple significant trauma w MCC.
969 ....................................... HIV w extensive O.R. procedure w MCC.
970 ....................................... HIV w extensive O.R. procedure w/o MCC.**
984 ....................................... Prostatic O.R. procedure unrelated to principal diagnosis w MCC.
985 ....................................... Prostatic O.R. procedure unrelated to principal diagnosis w CC.
PROPOSED QUINTILE 5
498 ....................................... Local excision & removal int fix devices of hip & femur w CC/MCC.
507 ....................................... Major shoulder or elbow joint procedures w CC/MCC.
514 ....................................... Hand or wrist proc, except major thumb or joint proc w/o CC/MCC.***
582 ....................................... Mastectomy for malignancy w CC/MCC.
619 ....................................... O.R. procedures for obesity w MCC.
653 ....................................... Major bladder procedures w MCC.
656 ....................................... Kidney & ureter procedures for neoplasm w MCC.
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23600 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
We note that we will continue to the HSRV method (described above). In FY 2008 IPPS final rule with comment
monitor the volume (that is, the number general, to determine the proposed FY when we adopted the MS–LTC–DRGs,
of LTCH cases) in the low-volume 2009 MS–LTC–DRG relative weights in we implemented the MS–LTC–DRGs
quintiles to ensure that our proposed this proposed rule, we are proposing to with a 2-year transition beginning in FY
quintile assignment results in use the same methodology we used in 2008. For FY 2008, the first year of the
appropriate payment for such cases and determining the FY 2008 MS–LTC–DRG transition, 50 percent of the relative
does not result in an unintended relative weights in the FY 2008 IPPS weight for a MS–LTC–DRG was based
financial incentive for LTCHs to final rule with comment period (72 FR on the average LTC–DRG relative weight
inappropriately admit these types of 47281 through 47299). However, we are under Version 24.0 of the LTC–DRG
cases. proposing to make a modification to our GROUPER. The remaining 50 percent of
methodology for determining proposed the relative weight was based on the
4. Steps for Determining the Proposed
relative weights for MS–LTC–DRGs with MS–LTC–DRG relative weight under
FY 2009 MS–LTC–DRG Relative
no LTCH cases (as discussed in greater Version 25.0 of the MS–LTC–DRG
Weights
detail in Step 5 below). Also, we note GROUPER. In FY 2009, the MS–LTC–
In general, the proposed FY 2009 MS– that, although we are generally DRG relative weights are based on 100
LTC–DRG relative weights in this proposing to use the same methodology percent of the MS–LTC–DRG relative
proposed rule were determined based in this proposed rule (with the weights. Accordingly, in determining
on the methodology established in the exception noted above) as the the proposed FY 2009 MS–LTC–DRG
August 30, 2002 LTCH PPS final rule methodology used in the FY 2008 IPPS relative weights in this proposed rule,
(67 FR 55989 through 55991). In final rule with comment, the discussion there is no longer a need to include a
summary, for FY 2009, we are proposing presented below of the steps for step to calculate MS–LTC–DRG
to group LTCH cases to the appropriate determining the proposed FY 2009 MS– transition blended relative weights (see
proposed MS–LTC–DRG, while taking LTC–DRG relative weights varies Step 7 in the FY 2008 IPPS final rule
into account the proposed low-volume slightly from the discussion of the steps with comment period (72 FR 47295)).
MS–LTC–DRGs (as described above), for determining the FY 2008 MS–LTC– Therefore, in this proposed rule, we
before the proposed FY 2009 MS–LTC– DRG relative weights (presented in the determined the proposed FY 2009 MS–
DRG relative weights are determined. FY 2008 IPPS final rule with comment) LTC–DRG relative weights based solely
After grouping the cases to the because we are taking this opportunity on the proposed MS–LTC–DRG relative
appropriate proposed MS–LTC–DRG (or to refine our description to more weight under proposed Version 26.0 of
proposed low-volume quintile), we precisely explain our methodology for the MS–LTC–DRG GROUPER, which is
would calculate the proposed relative determining the MS–LTC–DRG relative discussed in section II.B. of the
weights for FY 2009 by first removing weights. preamble of this proposed rule.
statistical outliers and cases with a As discussed in the FY 2008 IPPS Furthermore, we are proposing that we
length of stay of 7 days or less (as final rule with comment when we would determine the final FY 2009 MS–
discussed in greater detail below). Next, adopted the MS–LTC–DRGs, the LTC–DRG relative weights in the final
we would adjust the number of cases in adoption of the MS–LTC–DRGs with rule based on the final Version 26.0 of
each proposed MS–LTC–DRG (or either two or three severity levels the MS–LTC–DRG GROUPER that will
proposed low-volume quintile) for the resulted in some slight modifications of be presented in that same final rule.
effect of short-stay outlier cases (as also procedures for assigning relative Below we discuss in detail the steps
jlentini on PROD1PC65 with PROPOSALS2
discussed in greater detail below). The weights in cases of zero volume and/or for calculating the proposed FY 2009
short-stay adjusted discharges and nonmonotonicity (described in detail MS–LTC–DRG relative weights. We note
corresponding charges are used to below) from the methodology we that, as we stated above in section
calculate ‘‘relative adjusted weights’’ in established when we implemented the II.I.3.b. of the preamble of this proposed
each proposed MS–LTC–DRG (or LTCH PPS in the August 30, 2002 LTCH rule, we have excluded the data of all-
proposed low-volume quintile) using PPS final rule. As also discussed in the inclusive rate LTCHs and LTCHs that
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are paid in accordance with to adjust each LTCH’s charges per LTCH’s case-mix index to produce an
demonstration projects that had claims discharge for those remaining cases for adjusted hospital-specific relative
in the FY 2007 MedPAR file. the effects of short-stay outliers (as charge value for the case. An initial
Step 1—Remove statistical outliers. defined in § 412.529(a) in conjunction case-mix index value of 1.0 is used for
The first step in the calculation of the with § 412.503 for LTCH discharges each LTCH.
proposed FY 2009 MS–LTC–DRG occurring on or after October 1, 2008). For each proposed MS–LTC–DRG, the
relative weights is to remove statistical (We note that even if a case was proposed FY 2009 relative weight is
outlier cases. Consistent with our removed in Step 2 (that is, cases with a calculated by dividing the average of the
historical relative weight methodology, length of stay of 7 days or less), it was adjusted hospital-specific relative
we are proposing to continue to define paid as a short-stay outlier if its length charge values (from above) for the MS–
statistical outliers as cases that are of stay was less than or equal to five- LTC–DRG by the overall average
outside of 3.0 standard deviations from sixths of the average length of stay of the hospital-specific relative charge value
the mean of the log distribution of both MS–LTC–DRG.) across all cases for all LTCHs. Using
charges per case and the charges per day We would make this adjustment by these recalculated MS–LTC–DRG
for each proposed MS–LTC–DRG. These counting a short-stay outlier as a relative weights, each LTCH’s average
statistical outliers are removed prior to fraction of a discharge based on the ratio relative weight for all of its cases (that
calculating the proposed relative of the length of stay of the case to the is, its case-mix) is calculated by
weights because we believe that they average length of stay for the proposed dividing the sum of all the LTCH’s MS–
may represent aberrations in the data MS–LTC–DRG for nonshort-stay outlier LTC–DRG relative weights by its total
that distort the measure of average cases. This has the effect of number of cases. The LTCH’s hospital-
resource use. Including those LTCH proportionately reducing the impact of specific relative charge values above are
cases in the calculation of the proposed the lower charges for the short-stay multiplied by these hospital-specific
relative weights could result in an outlier cases in calculating the average case-mix indexes. These hospital-
inaccurate proposed relative weight that charge for the proposed MS–LTC–DRG. specific case-mix adjusted relative
does not truly reflect relative resource This process produces the same result charge values are then used to calculate
use among the proposed MS–LTC– as if the actual charges per discharge of a new set of MS–LTC–DRG relative
DRGs. a short-stay outlier case were adjusted to weights across all LTCHs. This iterative
Step 2—Remove cases with a length what they would have been had the process is continued until there is
of stay of 7 days or less. patient’s length of stay been equal to the convergence between the weights
The MS–LTC–DRG relative weights average length of stay of the proposed produced at adjacent steps, for example,
reflect the average of resources used on MS–LTC–DRG. when the maximum difference is less
representative cases of a specific type. Counting short-stay outlier cases as than 0.0001.
Generally, cases with a length of stay of full discharges with no adjustment in Step 5—Determine a proposed FY
7 days or less do not belong in a LTCH determining the proposed FY 2009 MS– 2009 relative weight for proposed MS–
because these stays do not fully receive LTC–DRG relative weights would lower LTC–DRGs with no LTCH cases.
or benefit from treatment that is typical the proposed FY 2009 MS–LTC–DRG As we stated above, we determine the
in a LTCH stay, and full resources are relative weight for affected proposed proposed FY 2009 relative weight for
often not used in the earlier stages of MS–LTC–DRGs because the relatively each proposed MS–LTC–DRG using
admission to a LTCH. If we were to lower charges of the short-stay outlier total Medicare allowable charges
include stays of 7 days or less in the cases would bring down the average reported in the best available LTCH
computation of the proposed FY 2009 charge for all cases within a proposed claims data (that is, the December 2007
MS–LTC–DRG relative weights, the MS–LTC–DRG. This would result in an update of the FY 2007 MedPAR file for
value of many relative weights would ‘‘underpayment’’ for nonshort-stay this proposed rule). Of the proposed FY
decrease and, therefore, payments outlier cases and an ‘‘overpayment’’ for 2009 MS–LTC–DRGs, we identified a
would decrease to a level that may no short-stay outlier cases. Therefore, we number of proposed MS–LTC–DRGs for
longer be appropriate. We do not believe are proposing to adjust for short-stay which there were no LTCH cases in the
that it would be appropriate to outlier cases under § 412.529 in this database. That is, based on data from the
compromise the integrity of the manner because it results in more FY 2007 MedPAR file used for this
payment determination for those LTCH appropriate payments for all LTCH proposed rule, no patients who would
cases that actually benefit from and cases. have been classified to those proposed
receive a full course of treatment at a Step 4—Calculate the proposed FY MS–LTC–DRGs were treated in LTCHs
LTCH, by including data from these 2009 MS–LTC–DRG relative weights on during FY 2007 and, therefore, no
very short-stays. Therefore, consistent an iterative basis. charge data are available for those
with our historical relative weight Consistent with our historical relative proposed MS–LTC–DRGs. Thus, in the
methodology, in determining the weight methodology, we are proposing process of determining the proposed
proposed FY 2009 MS–LTC–DRG to calculate the proposed MS–LTC–DRG MS–LTC–DRG relative weights, we are
relative weights, we are proposing to relative weights using the HSRV unable to calculate proposed relative
remove LTCH cases with a length of stay methodology, which is an iterative weights for these proposed MS–LTC–
of 7 days or less. process. First, for each LTCH case, we DRGs with no LTCH cases using the
Step 3—Adjust charges for the effects calculate a hospital-specific relative methodology described in Steps 1
of short-stay outliers. charge value by dividing the short-stay through 4 above. However, because
After removing cases with a length of outlier adjusted charge per discharge patients with a number of the diagnoses
stay of 7 days or less, we are left with (see step 3) of the LTCH case (after under these proposed MS–LTC–DRGs
jlentini on PROD1PC65 with PROPOSALS2
cases that have a length of stay of greater removing the statistical outliers (see may be treated at LTCHs, consistent
than or equal to 8 days. As the next step step 1)) and LTCH cases with a length with our historical methodology, we are
in the calculation of the proposed FY of stay of 7 days or less (see step 2) by proposing to assign relative weights to
2009 MS–LTC–DRG relative weights, the average charge per discharge for the each of the proposed no-volume MS–
consistent with our historical relative LTCH in which the case occurred. The LTC–DRGs based on clinical similarity
weight methodology, we are proposing resulting ratio is then multiplied by the and relative costliness (with the
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23602 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
exception of proposed ‘‘transplant’’ MS– we refer to one of the 543 proposed MS– Our proposed methodology for
LTC–DRGs and proposed ‘‘error’’ MS– LTC–DRGs for which we are able to determining the proposed relative
LTC–DRGs as discussed below). In determine relative weight as the weights for the proposed no-volume
general, we are proposing to determine proposed ‘‘cross-walked’’ MS–LTC– MS–LTC–DRGs is as follows: We cross-
proposed FY 2009 relative weights for DRG.) Then we are proposing to assign walk the proposed no-volume MS–LTC–
the proposed MS–LTC–DRGs with no the proposed no-volume MS–LTC–DRG DRG to a proposed MS–LTC–DRG for
LTCH cases in the FY 2007 MedPAR file the proposed relative weight of the which there are LTCH cases in the FY
used in this proposed rule (that is, proposed cross-walked MS–LTC–DRG. 2007 MedPAR file and to which it is
proposed ‘‘no-volume MS–LTC–DRGs) This proposed approach differs from the similar clinically in intensity of use of
by cross-walking each proposed no- one we used to determine the FY 2008 resources and relative costliness as
volume MS–LTC–DRG to another MS–LTC–DRG relative weights when determined by criteria such as care
proposed MS–LTC–DRG with a there were no LTCH cases (see 72 FR provided during the period of time
proposed relative weight (determined in 47290). Specifically, in determining the surrounding surgery, surgical approach
accordance with the proposed FY 2008 MS–LTC–DRG relative weights (if applicable), length of time of surgical
methodology described above). Then, in the FY 2008 IPPS final rule with procedure, postoperative care, and
under our proposed methodology comment period, if the no volume MS– length of stay. We then assign the
presented in this proposed rule, the LTC–DRG was cross-walked to a MS– proposed relative weight of the
proposed ‘‘no-volume’’ MS–LTC–DRG LTC–DRG that had 25 or more cases proposed cross-walked MS–LTC–DRG
would be assigned the same proposed and, therefore, was not in a low-volume as the proposed relative weight for the
relative weight of the proposed MS– quintile, we assigned the relative weight proposed no-volume MS–LTC–DRG
LTC–DRG to which it would be cross- of a quintile to a no-volume MS–LTC– such that both of these proposed MS–
walked (as described in greater detail DRG (rather than assigning the relative LTC–DRGs (that is, the proposed no-
below). As noted above, we are weight of the cross-walked MS–LTC– volume MS–LTC–DRG and the
proposing to make a modification to our proposed cross-walked MS–LTC–DRG)
DRG). While we believe this approach
methodology for determining proposed would have the same proposed relative
would result in appropriate LTCH PPS
relative weights for MS–LTC–DRGs with weight. We note that if the proposed
payments (because it is consistent with
no LTCH cases in this proposed rule, cross-walked MS–LTC–DRG had 25
our methodology for determining
which is discussed in greater detail cases or more, its proposed relative
relative weights for MS–LTC–DRGs that
below. As also noted above, even where weight, which was calculated using the
we are not proposing changes to our have a low volume of LTCH cases
(which is discussed above in section proposed methodology described in
existing methodology, we are taking this steps 1 through 4 above, would be
opportunity to refine our description to II.I.3.e. of this preamble)), upon further
review during the development of the assigned to the proposed no-volume
more precisely explain our proposed MS–LTC–DRG as well. Similarly, if the
methodology for determining the MS– proposed FY 2009 MS–LTC–DRG
relative weights in this proposed rule, proposed MS–LTC–DRG to which the
LTC–DRG relative weights in this proposed no-volume MS–LTC–DRG is
proposed rule. we now believe that proposing to assign
the proposed relative weight of the cross-walked has 24 or less cases, and
Specifically, in this proposed rule, we therefore was designated to one of the
are proposing to determine the relative proposed cross-walked MS–LTC–DRG
to the proposed no-volume MS–LTC– proposed low-volume quintiles for
weight for each proposed MS–LTC–DRG
DRG would result in more appropriate purposes of determining the proposed
using total Medicare allowable charges
LTCH PPS payments because those relative weights, we would assign the
reported in the December 2007 update
cases generally require equivalent proposed relative weight of the
of the FY 2007 MedPAR file. Of the 746
relative resource (and therefore should applicable proposed low-volume
proposed MS–LTC–DRGs for FY 2009,
generally have the same LTCH PPS quintile to the proposed no-volume MS–
we identified 203 proposed MS–LTC–
payment). The relative weight of each LTC–DRG such that both of these
DRGs for which there were no LTCH
MS–LTC–DRG should reflect relative proposed MS–LTC–DRGs (that is, the
cases in the database (including the 8
resource of the LTCH cases grouped to proposed no-volume MS–LTC–DRG and
proposed ‘‘transplant’’ MS–LTC–DRGs
that MS–LTC–DRG. Because the the proposed cross-walked MS–LTC–
and 2 proposed ‘‘error’’ MS–LTC–
DRGs). For this proposed rule, as noted proposed no-volume MS–LTC–DRGs DRG) would have the same proposed
above, we are proposing to assign would be cross-walked to other relative weight. (As we noted above, in
proposed relative weights for each of the proposed MS–LTC–DRGs based on the infrequent case where
203 proposed no-volume MS–LTC– clinical similarity and relative nonmonotonicity involving a proposed
DRGs (with the exception of the 8 costliness, which usually require no-volume MS–LTC–DRG results,
proposed ‘‘transplant’’ proposed MS– equivalent relative resource use, we additional measures as described in
LTC–DRGs and the 2 proposed ‘‘error’’ believe that assigning the proposed no- Step 6 would be required in order to
MS–LTC–DRGs, which are discussed volume MS–LTC–DRG the proposed maintain monotonically increasing
below) based on clinical similarity and relative weight of the proposed cross- relative weights.)
relative costliness to one of the walked MS–LTC–DRG would result in For this proposed rule, a list of the
remaining 543 (746 ¥ 203 = 543) appropriate LTCH PPS payments. (As proposed no-volume FY 2009 MS–LTC–
proposed MS–LTC–DRGs for which we explained below in Step 6, when DRGs and the proposed FY 2009 MS–
are able to determine relative weights, necessary, we are proposing to make LTC–DRG to which it is cross-walked
based on FY 2007 LTCH claims data. adjustments to account for (that is, the proposed cross-walked MS–
(For the remainder of this discussion, nonmonotonicity.) LTC–DRG) is shown in the chart below.
jlentini on PROD1PC65 with PROPOSALS2
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23604 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
349 ................................. Anal & stomal procedures w/o CC/MCC .............................................................................................. 348
350 ................................. Inguinal & femoral hernia procedures w MCC ...................................................................................... 348
351 ................................. Inguinal & femoral hernia procedures w CC ......................................................................................... 348
352 ................................. Inguinal & femoral hernia procedures w/o CC/MCC ............................................................................ 348
355 ................................. Hernia procedures except inguinal & femoral w/o CC/MCC ................................................................ 354
383 ................................. Uncomplicated peptic ulcer w MCC ...................................................................................................... 384
407 ................................. Pancreas, liver & shunt procedures w/o CC/MCC ............................................................................... 406
408 ................................. Biliary tract proc except only cholecyst w or w/o c.d.e. w MCC .......................................................... 409
410 ................................. Biliary tract proc except only cholecyst w or w/o c.d.e. w/o CC/MCC ................................................. 409
412 ................................. Cholecystectomy w c.d.e. w CC ........................................................................................................... 411
413 ................................. Cholecystectomy w c.d.e. w/o CC/MCC ............................................................................................... 411
416 ................................. Cholecystectomy except by laparoscope w/o c.d.e. w/o CC/MCC ...................................................... 415
419 ................................. Laparoscopic cholecystectomy w/o c.d.e. w/o CC/MCC ...................................................................... 418
420 ................................. Hepatobiliary diagnostic procedures w MCC ........................................................................................ 424
421 ................................. Hepatobiliary diagnostic procedures w CC ........................................................................................... 424
422 ................................. Hepatobiliary diagnostic procedures w/o CC/MCC ............................................................................... 424
425 ................................. Other hepatobiliary or pancreas O.R. procedures w/o CC/MCC ......................................................... 424
434 ................................. Cirrhosis & alcoholic hepatitis w/o CC/MCC ......................................................................................... 433
453 ................................. Combined anterior/posterior spinal fusion w MCC ............................................................................... 457
454 ................................. Combined anterior/posterior spinal fusion w CC .................................................................................. 457
455 ................................. Combined anterior/posterior spinal fusion w/o CC/MCC ...................................................................... 457
458 ................................. Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w/o CC/MCC ............................................. 457
460 ................................. Spinal fusion except cervical w/o MCC ................................................................................................ 459
461 ................................. Bilateral or multiple major joint procs of lower extremity w MCC ......................................................... 480
462 ................................. Bilateral or multiple major joint procs of lower extremity w/o MCC ...................................................... 482
473 ................................. Cervical spinal fusion w/o CC/MCC ...................................................................................................... 472
479 ................................. Biopsies of musculoskeletal system & connective tissue w/o CC/MCC .............................................. 478
483 ................................. Major joint & limb reattachment proc of upper extremity w CC/MCC .................................................. 480
484 ................................. Major joint & limb reattachment proc of upper extremity w/o CC/MCC ............................................... 482
491 ................................. Back & neck procedures except spinal fusion w/o CC/MCC ............................................................... 490
499 ................................. Local excision & removal int fix devices of hip & femur w/o CC/MCC ................................................ 498
506 ................................. Major thumb or joint procedures ........................................................................................................... 514
508 ................................. Major shoulder or elbow joint procedures w/o CC/MCC ...................................................................... 507
509 ................................. Arthroscopy ........................................................................................................................................... 505
512 ................................. Shoulder, elbow or forearm proc, exc major joint proc w/o CC/MCC .................................................. 511
517 ................................. Other musculoskelet sys & conn tiss O.R. proc w/o CC/MCC ............................................................. 516
538 ................................. Sprains, strains, & dislocations of hip, pelvis & thigh w/o CC/MCC .................................................... 537
583 ................................. Mastectomy for malignancy w/o CC/MCC ............................................................................................ 582
585 ................................. Breast biopsy, local excision & other breast procedures w/o CC/MCC ............................................... 584
614 ................................. Adrenal & pituitary procedures w CC/MCC .......................................................................................... 629
615 ................................. Adrenal & pituitary procedures w/o CC/MCC ....................................................................................... 630
620 ................................. O.R. procedures for obesity w CC ........................................................................................................ 619
621 ................................. O.R. procedures for obesity w/o CC/MCC ............................................................................................ 619
627 ................................. Thyroid, parathyroid & thyroglossal procedures w/o CC/MCC ............................................................. 626
654 ................................. Major bladder procedures w CC ........................................................................................................... 653
655 ................................. Major bladder procedures w/o CC/MCC ............................................................................................... 653
657 ................................. Kidney & ureter procedures forneoplasm w CC ................................................................................... 656
658 ................................. Kidney & ureter procedures for neoplasm w/o CC/MCC ...................................................................... 656
664 ................................. Minor bladder procedures w/o CC/MCC ............................................................................................... 663
667 ................................. Prostatectomy w/o CC/MCC ................................................................................................................. 666
670 ................................. Transurethral procedures w/o CC/MCC ................................................................................................ 669
672 ................................. Urethral procedures w/o CC/MCC ........................................................................................................ 671
675 ................................. Other kidney & urinary tract procedures w/o CC/MCC ........................................................................ 674
691 ................................. Urinary stones w esw lithotripsy w CC/MCC ........................................................................................ 694
692 ................................. Urinary stones w esw lithotripsy w/o CC/MCC ..................................................................................... 694
697 ................................. Urethral stricture .................................................................................................................................... 688
707 ................................. Major male pelvic procedures w CC/MCC ............................................................................................ 660
708 ................................. Major male pelvic procedures w/o CC/MCC ......................................................................................... 661
710 ................................. Penis procedures w/o CC/MCC ............................................................................................................ 709
712 ................................. Testes procedures w/o CC/MCC .......................................................................................................... 711
714 ................................. Transurethral prostatectomy w/o CC/MCC ........................................................................................... 713
715 ................................. Other male reproductive system O.R. proc for malignancy w CC/MCC .............................................. 717
716 ................................. Other male reproductive system O.R. proc for malignancy w/o CC/MCC ........................................... 717
jlentini on PROD1PC65 with PROPOSALS2
718 ................................. Other male reproductive system O.R. proc exc malignancy w/o CC/MCC .......................................... 717
724 ................................. Malignancy, male reproductive system w/o CC/MCC .......................................................................... 723
734 ................................. Pelvic evisceration, rad hysterectomy & rad vulvectomy w CC/MCC .................................................. 717
735 ................................. Pelvic evisceration, rad hysterectomy & rad vulvectomy w/o CC/MCC ............................................... 717
736 ................................. Uterine & adnexa proc for ovarian or adnexal malignancy w MCC ..................................................... 754
737 ................................. Uterine & adnexa proc for ovarian or adnexal malignancy w CC ........................................................ 755
738 ................................. Uterine & adnexa proc for ovarian or adnexal malignancy w/o CC/MCC ............................................ 756
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740 ................................. Uterine, adnexa proc for non-ovarian/adnexal malig w CC .................................................................. 739
741 ................................. Uterine, adnexa proc for non-ovarian/adnexal malig w/o CC/MCC ..................................................... 739
742 ................................. Uterine & adnexa proc for non-malignancy w CC/MCC ....................................................................... 755
743 ................................. Uterine & adnexa proc for non-malignancy w/o CC/MCC .................................................................... 756
745 ................................. D&C, conization, laparascopy & tubal interruption w/o CC/MCC ......................................................... 744
747 ................................. Vagina, cervix & vulva procedures w/o CC/MCC ................................................................................. 746
748 ................................. Female reproductive system reconstructive procedures ...................................................................... 749
750 ................................. Other female reproductive system O.R. procedures w/o CC/MCC ...................................................... 749
760 ................................. Menstrual & other female reproductive system disorders w CC/MCC ................................................. 744
761 ................................. Menstrual & other female reproductive system disorders w/o CC/MCC .............................................. 744
765 ................................. Cesarean section w CC/MCC ............................................................................................................... 744
766 ................................. Cesarean section w/o CC/MCC ............................................................................................................ 744
767 ................................. Vaginal delivery w sterilization &/or D&C ............................................................................................. 744
768 ................................. Vaginal delivery w O.R. proc except steril &/or D&C ........................................................................... 744
769 ................................. Postpartum & post abortion diagnoses w O.R. procedure ................................................................... 744
770 ................................. Abortion w D&C, aspiration curettage or hysterotomy ......................................................................... 744
774 ................................. Vaginal delivery w complicating diagnoses .......................................................................................... 744
775 ................................. Vaginal delivery w/o complicating diagnoses ....................................................................................... 744
776 ................................. Postpartum & post abortion diagnoses w/o O.R. procedure ................................................................ 744
777 ................................. Ectopic pregnancy ................................................................................................................................. 744
778 ................................. Threatened abortion .............................................................................................................................. 759
779 ................................. Abortion w/o D&C .................................................................................................................................. 759
780 ................................. False labor ............................................................................................................................................. 759
782 ................................. Other antepartum diagnoses w/o medical complications ..................................................................... 781
789 ................................. Neonates, died or transferred to another acute care facility ................................................................ 781
790 ................................. Extreme immaturity or respiratory distress syndrome, neonate ........................................................... 781
791 ................................. Prematurity w major problems .............................................................................................................. 781
792 ................................. Prematurity w/o major problems ........................................................................................................... 781
793 ................................. Full term neonate w major problems .................................................................................................... 781
794 ................................. Neonate w other significant problems ................................................................................................... 781
795 ................................. Normal newborn .................................................................................................................................... 781
799 ................................. Splenectomy w MCC ............................................................................................................................. 800
801 ................................. Splenectomy w/o CC/MCC ................................................................................................................... 800
803 ................................. Other O.R. proc of the blood & blood forming organs w CC ............................................................... 802
804 ................................. Other O.R. proc of the blood & blood forming organs w/o CC/MCC ................................................... 802
820 ................................. Lymphoma & leukemia w major O.R. procedure w MCC .................................................................... 823
821 ................................. Lymphoma & leukemia w major O.R. procedure w CC ....................................................................... 824
822 ................................. Lymphoma & leukemia w major O.R. procedure w/o CC/MCC ........................................................... 824
825 ................................. Lymphoma & non-acute leukemia w other O.R. proc w/o CC/MCC .................................................... 824
828 ................................. Myeloprolif disord or poorly diff neopl w maj O.R. proc w/o CC/MCC ................................................. 827
830 ................................. Myeloprolif disord or poorly diff neopl w other O.R. proc w/o CC/MCC .............................................. 829
837 ................................. Chemo w acute leukemia as sdx or w high dose chemo agent w MCC ............................................. 829
838 ................................. Chemo w acute leukemia as sdx or w high dose chemo agent w CC ................................................ 829
839 ................................. Chemo w acute leukemia as sdx or w high dose chemo agent w/o CC/MCC .................................... 829
848 ................................. Chemotherapy w/o acute leukemia as secondary diagnosis w/o CC/MCC ......................................... 847
887 ................................. Other mental disorder diagnoses .......................................................................................................... 881
894 ................................. Alcohol/drug abuse or dependence, left ama ....................................................................................... 881
915 ................................. Allergic reactions w MCC ...................................................................................................................... 918
916 ................................. Allergic reactions w/o MCC ................................................................................................................... 918
955 ................................. Craniotomy for multiple significant trauma ............................................................................................ 26
956 ................................. Limb reattachment, hip & femur proc for multiple significant trauma ................................................... 482
959 ................................. Other O.R. procedures for multiple significant trauma w/o CC/MCC ................................................... 958
986 ................................. Prostatic O.R. procedure unrelated to principal diagnosis w/o CC/MCC ............................................. 985
To illustrate this methodology for thrombolytic agent w MCC). We Furthermore, for FY 2009, consistent
determining the proposed relative determined that MS–LTC–DRG 70 with our historical relative weight
weights for the proposed MS–LTC– (Nonspecific cebrovascular disorders w methodology, we are proposing to
DRGs with no LTCH cases, we are MCC) is similar clinically and based on establish MS–LTC–DRG relative weights
providing the following example, which resource use to proposed MS–LTC–DRG of 0.0000 for the following proposed
refers to the proposed no-volume MS– 61. Therefore, we are proposing to transplant MS–LTC–DRGs: Heart
jlentini on PROD1PC65 with PROPOSALS2
LTC–DRGs crosswalk information for assign the same proposed relative Transplant or Implant of Heart Assist
FY 2009 provided in the chart above. weight of proposed MS–LTC–DRG 70 of System with MCC (MS–LTC–DRG 1);
Example: There were no cases in the 0.8718 for FY 2009 to proposed MS– Heart Transplant or Implant of Heart
FY 2007 MedPAR file used for this LTC–DRG 61 (Table 11 of the Assist System without MCC (MS–LTC–
proposed rule for proposed MS–LTC– Addendum of this proposed rule). DRG 2); Liver Transplant with MCC or
DRG 61 (Acute ischemic stroke w use of Intestinal Transplant (MS–LTC–DRG 5);
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Liver Transplant without MCC (MS– severity level contains cases with at The first example of
LTC–DRG 6); Lung Transplant (MS– least one code that is a CC. Those cases nonmonotonically increasing relative
LTC–DRG 7); Simultaneous Pancreas/ without a MCC or a CC are referred to weights for a MS–LTC–DRG pertains to
Kidney Transplant (MS–LTC–DRG 8); as without CC/MCC. When data did not a base MS–LTC–DRG with a three-level
Pancreas Transplant (MS–LTC–DRG 10); support the creation of three severity split and each of the three levels has 25
and Kidney Transplant (MS–LTC–DRG levels, the base was divided into either or more LTCH cases and, therefore,
652). This is because Medicare will only two levels or the base was not none of those MS–LTC–DRGs is
cover these procedures if they are subdivided. The two-level subdivisions assigned to one of the five low-volume
performed at a hospital that has been could consist of the CC/MCC and the quintiles. In this proposed rule, if
certified for the specific procedures by without CC/MCC. Alternatively, the nonmonotonicity is detected in the
Medicare and presently no LTCH has other type of two level subdivision proposed relative weights of the
been so certified. Based on our research, could consist of the MCC and without proposed MS–LTC–DRGs in adjacent
we found that most LTCHs only perform MCC. severity levels (for example, the
minor surgeries, such as minor small In those base MS–LTC–DRGs that are proposed relative weight of the ‘‘with
and large bowel procedures, to the split into either two or three severity MCC’’ (the highest severity level) is less
extent any surgeries are performed at levels, cases classified into the ‘‘without than the ‘‘with CC’’ (the middle level),
all. Given the extensive criteria that CC/MCC’’ MS–LTC–DRG are expected or the ‘‘with CC’’ is less than the
must be met to become certified as a to have a lower resource use (and lower ‘‘without CC/MCC’’), we would combine
transplant center for Medicare, we costs) than the ‘‘with CC/MCC’’ MS– the nonmonotonic adjacent proposed
believe it is unlikely that any LTCHs LTC–DRG (in the case of a two-level MS–LTC–DRGs and re-determine a
will become certified as a transplant split) or the ‘‘with CC’’ and ‘‘with MCC’’ proposed relative weight based on the
center. In fact, in the more than 20 years MS–LTC–DRGs (in the case of a three- case-weighted average of the combined
since the implementation of the IPPS, level split). That is, theoretically, cases LTCH cases of the nonmonotonic
there has never been a LTCH that even that are more severe typically require proposed MS–LTC–DRGs. The case-
expressed an interest in becoming a greater expenditure of medical care weighted average charge is calculated by
transplant center. resources and will result in higher dividing the total charges for all LTCH
If in the future a LTCH applies for cases in both severity levels by the total
average charges. Therefore, in the three
certification as a Medicare-approved number of LTCH cases for both
severity levels, relative weights should
transplant center, we believe that the proposed MS–LTC–DRGs. The same
application and approval procedure increase by severity, from lowest to
highest. If the relative weights do not proposed relative weight would be
would allow sufficient time for us to assigned to both affected levels of the
determine appropriate weights for the increase (that is, if within a base MS–
LTC–DRG, a MS–LTC–DRG with MCC base MS–LTC–DRG. If nonmonotonicity
MS–LTC–DRGs affected. At the present remains an issue because the above
time, we would only include these eight has a lower relative weight than one
with CC, or the MS–LTC–DRG without process results in a proposed relative
proposed transplant MS–LTC–DRGs in weight that is still nonmonotonic to the
the GROUPER program for CC/MCC has a higher relative weight
than either of the others, they are remaining proposed MS–LTC–DRG
administrative purposes only. Because relative weight within the base MS–
we use the same GROUPER program for nonmonotonic). We continue to believe
that utilizing nonmonotonic relative LTC–DRG, we would combine all three
LTCHs as is used under the IPPS, of the severity levels to redetermine the
removing these proposed MS–LTC– weights to adjust Medicare payments
would result in inappropriate payments. proposed relative weights based on the
DRGs would be administratively
Consequently, in general, we are case-weighted average charge of the
burdensome.
Again, we note that, as this system is proposing to combine proposed MS– combined severity levels. This same
dynamic, it is entirely possible that the LTC–DRG severity levels within a base proposed relative weight is then
number of proposed MS–LTC–DRGs MS–LTC–DRG for the purpose of assigned to each of the proposed MS–
with no volume of LTCH cases based on computing a relative weight when LTC–DRGs in that base MS–LTC–DRG.
the system will vary in the future. We necessary to ensure that monotonicity is A second example of
used the most recent available claims maintained. In determining the nonmonotonically increasing relative
data in the MedPAR file to identify no- proposed FY 2009 MS–LTC–DRG weights for a base MS–LTC–DRG
volume proposed MS–LTC–DRGs and to relative weights in this proposed rule, in pertains to the situation where there are
determine the proposed relative weights general, we are proposing to use the three severity levels and one or more of
in this proposed rule. same methodology to adjust for the severity levels within a base MS–
Step 6—Adjust the proposed FY 2009 nonmonotonicity that we used to LTC–DRG has less than 25 LTCH cases
MS–LTC–DRG relative weights to determine the FY 2008 MS–LTC–DRG (that is, low-volume). In this proposed
account for nonmonotonically relative weights in the FY 2008 IPPS rule, if nonmonotonicity occurs in the
increasing relative weights. final rule with comment (72 FR 47293 case where either the highest or lowest
As discussed in section II.B. of the through 47295). However, as noted severity level (‘‘with MCC’’ or ‘‘without
preamble of this proposed rule, the MS– above, we are taking this opportunity to CC/MCC’’) has 25 LTCH cases or more
DRGs (used under the IPPS) on which refine our description to more precisely and the other two severity levels are
the MS–LTC–DRGs are based provide a explain our methodology for low-volume (and therefore the other two
significant improvement in the DRG determining the MS–LTC–DRG relative severity levels would otherwise be
system’s recognition of severity of weights in this proposed rule. assigned the proposed relative weight of
illness and resource usage. The Specifically, in determining the the applicable proposed low-volume
jlentini on PROD1PC65 with PROPOSALS2
proposed MS–DRGs contain base DRGs proposed FY 2009 MS–LTC–DRG quintile(s)), we would combine the data
that have been subdivided into one, relative weights in this proposed rule, for the cases in the two adjacent
two, or three severity levels. Where under each of the example scenarios proposed low-volume MS–LTC–DRGs
there are three severity levels, the most provided below, we would combine for the purpose of determining a
severe level has at least one code that is severity levels within a base MS–LTC– proposed relative weight. If the
referred to as an MCC. The next lower DRG as follows: combination results in at least 25 cases,
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we re-determine one proposed relative combined proposed low-volume MS– lowest severity level, the proposed
weight based on the case-weighted LTC–DRGs. Then the proposed relative cross-walk MS–LTC–DRG would be the
average charge of the combined severity weight of the affected proposed low- middle level (‘‘with CC’’) within the
levels and assign this same proposed volume quintile would be redetermined same base MS–LTC–DRG, and therefore
relative weight to each of the severity and that proposed relative weight would the proposed no-volume MS–LTC–DRG
levels. If the combination results in less be assigned to each of the affected (either the ‘‘with MCC’’ or the ‘‘without
than 25 cases, based on the case- severity levels (and all of the proposed CC/MCC’’) and the proposed cross-walk
weighted average charge of the MS–LTC–DRGs in the affected proposed MS–LTC–DRG (the ‘‘with CC’’) would
combined proposed low-volume MS– low-volume quintile). If the have the same proposed relative weight.
LTC–DRGs, both proposed MS–LTC– nonmonotonicity persists, we would Consequently, no adjustment for
DRGs would be assigned to the combine all three levels of that base monotonicity would be necessary.)
appropriate proposed low-volume MS–LTC–DRG for the purpose of However, if our proposed methodology
quintile (discussed above in section redetermining a proposed relative for determining proposed relative
II.I.3.e. of this preamble) based on the weight based on the case-weighted weights for proposed no-volume MS–
case-weighted average charge of the average charge of the combined severity LTC–DRGs results in nonmonotonicity
combined proposed low-volume MS– levels, and assign that proposed relative with the third severity level in the base-
LTC–DRGs. Then the proposed relative weight to each of the three severity MS–LTC–DRG, all three severity levels
weight of the affected proposed low- levels. If that combination of all three would be combined for the purpose of
volume quintile would be redetermined severity levels results in less than 25 redetermining one proposed relative
and that proposed relative weight would cases, we would assign that ‘‘combined’’
be assigned to each of the affected weight based on the case-weighted
base MS–LTC–DRG to the appropriate average charge of the combined severity
severity levels (and all of the proposed proposed low-volume quintile based on
MS–LTC–DRGs in the affected proposed levels. This same proposed relative
the case-weighted average charge of the weight would be assigned to each of the
low-volume quintile). If combined proposed low-volume MS–
nonmonotonicity persists, we would three severity levels in the base MS–
LTC–DRGs. Then the proposed relative
combine all three severity levels and LTC–DRG.
weight of the affected proposed low-
redetermine one proposed relative volume quintile would be redetermined Thus far in the discussion, we have
weight based on the case-weighted and that proposed relative weight would presented examples of nonmonotonicity
average charge of the combined severity be assigned to each of the affected in a base MS–LTC–DRG that has three
levels and this same proposed relative severity levels (and all of the proposed severity levels. We would apply the
weight would be assigned to each of the MS–LTC–DRGs in the affected proposed same process where the base MS–LTC–
three levels. low-volume quintile). DRG contains only two severity levels.
Similarly, in nonmonotonic cases For example, if nonmonotonicity occurs
where the middle level has 25 cases or Another example of nonmonotonicity
involves a base MS–LTC–DRG with in a base MS–LTC–DRG with two
more but either or both of the lowest or severity levels (that is, the proposed
highest severity level has less than 25 three severity levels where at least one
of the severity levels has no cases. As relative weight of the higher severity
cases (that is, low volume), we would level is less than the lower severity
combine the nonmonotonic proposed discussed above in greater detail in Step
5, based on resource use intensity and level), where both of the proposed MS–
low-volume MS–LTC–DRG with the LTC–DRGs have at least 25 cases or
middle level proposed MS–LTC–DRG of clinical similarity, we propose to cross-
walk a proposed no-volume MS–LTC– where one or both of the proposed MS–
the base MS–LTC–DRG. We would LTC–DRGs is low volume (that is, less
redetermine one proposed relative DRG to a proposed MS–LTC–DRG that
has at least one case. Under our than 25 cases), we would combine the
weight based on the case-weighted two proposed MS–LTC–DRGs of that
average charge of the combined severity proposed methodology for the treatment
of proposed no-volume MS–LTC–DRGs, base MS–LTC–DRG for the purpose of
levels and assign this same proposed
the proposed no-volume MS–LTC–DRG redetermining a proposed relative
relative weight to each of the affected
would be assigned the same proposed weight based on the combined case-
proposed MS–LTC–DRGs. If
relative weight as the proposed MS– weighted average charge for both
nonmonotonicity persists, we would
LTC–DRG to which the proposed no- severity levels. This same proposed
combine all three levels for the purpose
of redetermining a proposed relative volume MS–LTC–DRG is cross-walked. relative weight would be assigned to
weight based on the case-weighted For many proposed no-volume MS– each of the two severity levels in the
average charge of the combined severity LTC–DRGs, as shown in the chart above base MS–LTC–DRG. Specifically, if the
levels, and assign that proposed relative in Step 5, the application of our combination of the two severity levels
weight to each of the three severity proposed methodology results in a would result in at least 25 cases, we
levels. proposed cross-walk MS–LTC–DRG that would redetermine one proposed
In the case where all three severity is the adjacent severity level in the same relative weight based on the case-
levels in the base MS–LTC–DRGs are base MS–LTC–DRG. Consequently, in weighted average charge and assign that
proposed low-volume MS–LTC–DRGs most instances, the proposed no-volume proposed relative weight to each of the
and two of the severity levels are MS–LTC–DRG and the adjacent two proposed MS–LTC–DRGs. If the
nonmonotonic in relation to each other, proposed MS–LTC–DRG to which it is combination results in less than 25
we would combine the two adjacent cross-walked would not result in cases, we would assign both proposed
nonmonotonic severity levels. If that nonmonotonicity because both of these MS–LTC–DRGs to the appropriate
combination results in less than 25 severity levels would have the same proposed low-volume quintile
jlentini on PROD1PC65 with PROPOSALS2
cases, both proposed low-volume MS– proposed relative weight. (In this (discussed above in section II.I.3.e. of
LTC–DRGs would be assigned to the proposed rule, under our proposed this preamble) based on their combined
appropriate proposed low-volume methodology for the treatment of case-weighted average charge. Then the
quintile (discussed above in section proposed no-volume MS–LTC–DRGs, in proposed relative weight of the affected
II.I.3.e. of this preamble) based on the the case where the proposed no-volume proposed low-volume quintile would be
case-weighted average charge of the MS–LTC–DRG is either the highest or redetermined and that proposed relative
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23608 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
weight would be assigned to each of the methodology as described in detail in determining the proposed FY 2009
affected severity levels. Steps 1 through 6 above, we would budget neutrality adjustment in this
Step 7—Calculate the proposed FY calculate and apply a normalization proposed rule, using the following
2009 budget neutrality factor. factor to those relative weights to ensure steps: (1) We simulate estimated total
As we established in the RY 2008 that estimated payments are not payments using the normalized
LTCH PPS final rule (72 FR 26882), influenced by changes in the proposed relative weights under
under the broad authority conferred composition of case types or the GROUPER Version 26.0 (as described
upon the Secretary under section 123 of changes being proposed to the above); (2) we simulate estimated total
Pub. L. 106–113 as amended by section classification system. That is, the payments using the FY 2008 GROUPER
307(b) of Pub. L. 106–554 to develop the proposed normalization adjustment is (Version 25.0) and FY 2008 MS–LTC–
LTCH PPS, beginning with the MS– intended to ensure that the recalibration DRG relative weights (as established in
LTC–DRG update for FY 2008, the of the proposed MS–LTC–DRG relative the FY 2008 IPPS final rule (72 FR
annual update to the MS–LTC–DRG weights (that is, the process itself) 47295 through 47296)); (3) we calculate
classifications and relative weights will neither increases nor decreases total the ratio of these estimated total
be done in a budget neutral manner estimated payments. payments by dividing the estimated
such that estimated aggregate LTCH PPS To calculate the proposed total payments determined in step (2) by
payments would be unaffected, that is, normalization factor for FY 2009, we the estimated total payments
would be neither greater than nor less would use the following steps: (1) We determined in step (1). Then, each of the
than the estimated aggregate LTCH PPS use the most recent available claims normalized proposed relative weights is
payments that would have been made data (FY 2007) and the proposed MS– multiplied by the proposed budget
without the MS–LTC–DRG classification LTC–DRG relative weights (determined neutrality factor to determine the budget
and relative weight changes. above in Steps 1 through 6 above) to neutral proposed relative weight for
Specifically, in that same final rule, we calculate the average CMI; (2) we group each proposed MS–LTC–DRG.
established under § 412.517(b) that the the same claims data (FY 2007) using Accordingly, in determining the
annual update to the MS–LTC–DRG the FY 2008 GROUPER (Version 25.0) proposed MS–LTC–DRG relative
classifications and relative weights be and FY 2008 relative weights weights for FY 2009 in this proposed
done in a budget neutral manner. For a (established in the FY 2008 IPPS final rule, based on the most recent available
detailed discussion on the rule with comment period (72 FR 47295 LTCH claims data, we are proposing a
establishment of the requirement to through 47296)) and calculate the budget neutrality factor of 0.99965,
update the MS–LTC–DRG classifications average CMI; and (3), we compute the which would be applied to the
and relative weights in a budget neutral ratio of these average CMIs by dividing normalized proposed relative weights
manner, we refer readers to the RY 2008 the average CMI determined in step (2) (described above). The proposed FY
LTCH PPS final rule (72 FR 26880 by the average CMI determined in step 2009 MS–LTC–DRG relative weights in
through 26884). Updating the MS–LTC– (1). In determining the proposed MS– Table 11 in the Addendum of this
DRGs in a budget neutral manner results LTC–DRG relative weights for FY 2009, proposed rule reflect this proposed
in an annual update to the individual based on the latest available LTCH budget neutrality factor. Furthermore,
MS–LTC–DRG classifications and claims data, the normalization factor is we expect that we will have established
relative weights based on the most estimated as 1.038266, which would be payments rates and policies for RY 2009
recent available data to reflect changes applied in determining each proposed prior to the development of the FY 2009
in relative LTCH resource use. To MS–LTC–DRG relative weight. That is, IPPS final rule. Therefore, for purposes
accomplish this, the MS–LTC–DRG each proposed MS–LTC–DRG relative of determining the FY 2009 budget
relative weights are uniformly adjusted weight would be multiplied by 1.038266 neutrality factor in the final rule, we are
to ensure that estimated aggregate in the first step of the budget neutrality proposing that we would simulate
payments under the LTCH PPS would process. Accordingly, the proposed estimated total payments using the most
not be affected (that is, decreased or relative weights in Table 11 in the recent LTCH PPS payment policies and
increased). Consistent with that Addendum of this proposed rule reflect LTCH claims data that are available at
provision, we are proposing to update this proposed normalization factor. We
that time.
the MS–LTC–DRG classifications and also ensure that estimated aggregate Table 11 in the Addendum to this
relative weights for FY 2009 based on LTCH PPS payments (based on the most proposed rule lists the proposed MS–
the most recent available data and recent available LTCH claims data) after LTC–DRGs and their respective
include a proposed budget neutrality reclassification and recalibration (the proposed budget neutral relative
adjustment that would be applied in new proposed FY 2009 MS–LTC–DRG weights, geometric mean length of stay,
determining the proposed MS–LTC– classifications and relative weights) are and five-sixths of the geometric mean
DRG relative weights. equal to estimated aggregate LTCH PPS
To ensure budget neutrality in length of stay (used in the determination
payments (for the same most recent
updating the proposed MS–LTC–DRG of short-stay outlier payments under
available LTCH claims data) before
classifications and proposed relative § 412.529) for FY 2009.
reclassification and recalibration (the
weights under § 412.517(b), consistent existing FY 2008 MS–DRG J. Proposed Add-On Payments for New
with the budget neutrality methodology classifications and relative weights). Services and Technologies
we established in the FY 2008 IPPS final Therefore, we would calculate the
rule with comment period (72 FR 47295 1. Background
proposed budget neutrality adjustment
through 47296), in determining the factor by simulating estimated total Sections 1886(d)(5)(K) and (L) of the
proposed budget neutrality adjustment payments under both sets of GROUPERs Act establish a process of identifying
jlentini on PROD1PC65 with PROPOSALS2
for FY 2009 in this proposed rule, we and relative weights using current LTCH and ensuring adequate payment for new
are proposing to use a method that is PPS payment policies (RY 2008) and the medical services and technologies
similar to the methodology used under most recent available claims data (from (sometimes collectively referred to in
the IPPS. Specifically, for FY 2009, after the FY 2007 MedPAR file). this section as ‘‘new technologies’’)
recalibrating the proposed MS–LTC– Accordingly, we are proposing to use under the IPPS. Section
DRG relative weights as we do under the RY 2008 LTCH PPS rates and policies in 1886(d)(5)(K)(vi) of the Act specifies
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23609
that a medical service or technology will approval is received in cases where the lesser of 75 percent of the standardized
be considered new if it meets criteria product initially was generally amount (increased to reflect the
established by the Secretary after notice unavailable to Medicare patients difference between cost and charges) or
and opportunity for public comment. following FDA approval, such as in the 75 percent of one standard deviation for
Section 1886(d)(5)(K)(ii)(I) of the Act case of a national noncoverage the diagnosis-related group involved.’’
specifies that the process must apply to determination, or if there was some (We refer readers to section IV.D. of the
a new medical service or technology if, documented delay in bringing the preamble to the FY 2005 IPPS final rule
‘‘based on the estimated costs incurred product onto the market after that (69 FR 49084) for a discussion of the
with respect to discharges involving approval (for instance, component revision of the regulations to
such service or technology, the DRG production or drug production has been incorporate the change made by section
prospective payment rate otherwise postponed following FDA approval due 503(b)(1) of Pub. L. 108–173.) Table 10
applicable to such discharges under this to shelf life concerns or manufacturing in section XIX. of the interim final rule
subsection is inadequate.’’ issues). After the DRGs have been with comment period published in the
The regulations implementing this recalibrated to reflect the costs of an Federal Register on November 27, 2007,
provision establish three criteria for new otherwise new medical service or contained the final thresholds that are
medical services and technologies to technology, the medical service or being used to evaluate applications for
receive an additional payment. First, technology is no longer eligible for new technology add-on payments for FY
42CFR412.87(b)(2) states that a specific special add-on payment for new 2009 (72 FR 66888 through 66892). An
medical service or technology will be medical services or technologies applicant must demonstrate that the
considered new for purposes of new (§ 412.87(b)(2)). For example, an cost threshold is met using information
medical service or technology add-on approved new technology that received from inpatient hospital claims.
payments until such time as Medicare FDA approval in October 2007 and With regard to the issue of whether
data are available to fully reflect the cost entered the market at that time may be the HIPAA Privacy Rule at 45 CFR Parts
of the technology in the DRG weights eligible to receive add-on payments as a 160 and 164 applies to claims
through recalibration. Typically, there is new technology for discharges occurring information that providers submit with
a lag of 2 to 3 years from the point a new before October 1, 2010 (the start of FY applications for new technology add-on
medical service or technology is first 2011). Because the FY 2011 DRG
payments, we addressed this issue in
introduced on the market (generally on weights would be calculated using FY
the September 7, 2001 final rule that
the date that the technology receives 2009 MedPAR data, the costs of such a
FDA approval/clearance) and when data established the new technology add-on
new technology would be fully reflected
reflecting the use of the medical service payment regulations (66 FR 46917). In
in the FY 2011 DRG weights. Therefore,
or technology are used to calculate the the preamble to that final rule, we
the new technology would no longer be
DRG weights. For example, data from explained that health plans, including
eligible to receive add-on payments as a
discharges occurring during FY 2007 are Medicare, and providers that conduct
new technology for discharges occurring
used to calculate the FY 2009 DRG certain transactions electronically,
in FY 2011 and thereafter.
weights in this proposed rule. Section Section 412.87(b)(3) further provides including the hospitals that would be
412.87(b)(2) of our existing regulations that, to be eligible for the add-on receiving payment under the FY 2001
provides that ‘‘a medical service or payment for new medical services or IPPS final rule, are required to comply
technology may be considered new technologies, the DRG prospective with the HIPAA Privacy Rule. We
within 2 or 3 years after the point at payment rate otherwise applicable to further explained how such entities
which data begin to become available the discharge involving the new medical could meet the applicable HIPAA
reflecting the ICD–9–CM code assigned services or technologies must be requirements by discussing how the
to the new medical service or assessed for adequacy. Under the cost HIPAA Privacy Rule permitted
technology (depending on when a new criterion, to assess whether a new providers to share with health plans
code is assigned and data on the new technology would be inadequately paid information needed to ensure correct
medical service or technology become under the applicable DRG-prospective payment, if they had obtained consent
available for DRG recalibration). After payment rate, we evaluate whether the from the patient to use that patient’s
CMS has recalibrated the DRGs based on charges for cases involving the new data for treatment, payment, or health
available data to reflect the costs of an technology exceed certain threshold care operations. We also explained that
otherwise new medical service or amounts. In the FY 2004 IPPS final rule because the information to be provided
technology, the medical service or (68 FR 45385), we established the within applications for new technology
technology will no longer be considered threshold at the geometric mean add-on payment would be needed to
‘‘new’’ under the criterion for this standardized charge for all cases in the ensure correct payment, no additional
section.’’ DRG plus 75 percent of 1 standard consent would be required. The HHS
The 2-year to 3-year period during deviation above the geometric mean Office of Civil Rights has since amended
which a medical service or technology standardized charge (based on the the HIPAA Privacy Rule, but the results
can be considered new would ordinarily logarithmic values of the charges and remain. The HIPAA Privacy Rule no
begin on the date on which the medical converted back to charges) for all cases longer requires covered entities to
service or technology received FDA in the DRG to which the new medical obtain consent from patients to use or
approval or clearance. (We note that, for service or technology is assigned (or the disclose protected health information
purposes of this section of the proposed case-weighted average of all relevant for treatment, payment, or health care
rule, we refer to both FDA approval and DRGs, if the new medical service or operations, and expressly permits such
FDA clearance as FDA ‘‘approval.’’) technology occurs in more than one entities to use or to disclose protected
jlentini on PROD1PC65 with PROPOSALS2
However, in some cases, initially there DRG). health information for any of these
may be no Medicare data available for However, section 503(b)(1) of Pub. L. purposes. (We refer readers to 45 CFR
the new service or technology following 108–173 amended section 164.502(a)(1)(ii), and 164.506(c)(1) and
FDA approval. For example, the 1886(d)(5)(K)(ii)(I) of the Act to provide (c)(3), and the Standards for Privacy of
newness period could extend beyond that, beginning in FY 2005, CMS will Individually Identifiable Health
the 2-year to 3-year period after FDA apply ‘‘a threshold * * * that is the Information published in the Federal
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23610 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Register on August 14, 2002, for a full budget neutrality factor, which was to ensure that they remain up to date as
discussion of changes in consent applied to the standardized amounts new issues arise. To achieve its goals,
requirements.) and the hospital-specific amounts. the CTI works to streamline and create
Section 412.87(b)(1) of our existing However, section 503(d)(2) of Pub. L. a more transparent coding and payment
regulations provides that a new 108–173 provides that there shall be no process, improve the quality of medical
technology is an appropriate candidate reduction or adjustment in aggregate decisions, and speed patient access to
for an additional payment when it payments under the IPPS due to add-on effective new treatments. It is also
represents ‘‘an advance that payments for new medical services and dedicated to supporting better decisions
substantially improves, relative to technologies. Therefore, add-on by patients and doctors in using
technologies previously available, the payments for new medical services or Medicare-covered services through the
diagnosis or treatment of Medicare technologies for FY 2005 and later years promotion of better evidence
beneficiaries.’’ For example, a new have not been budget neutral. development, which is critical for
technology represents a substantial Applicants for add-on payments for improving the quality of care for
clinical improvement when it reduces new medical services or technologies for Medicare beneficiaries.
mortality, decreases the number of FY 2010 must submit a formal request, The agency plans to continue its Open
hospitalizations or physician visits, or including a full description of the Door forums with stakeholders who are
reduces recovery time compared to the clinical applications of the medical interested in CTI’s initiatives. In
technologies previously available. (We service or technology and the results of addition, to improve understanding of
refer readers to the September 7, 2001 any clinical evaluations demonstrating CMS processes for coverage, coding, and
final rule for a complete discussion of that the new medical service or payment and how to access them, the
this criterion (66 FR 46902).) technology represents a substantial CTI is developing an ‘‘innovator’s
The new medical service or clinical improvement, along with a guide’’ to these processes. This guide
technology add-on payment policy significant sample of data to will, for example, outline regulation
under the IPPS provides additional demonstrate the medical service or cycles and application deadlines. The
payments for cases with relatively high technology meets the high-cost intent is to consolidate this information,
costs involving eligible new medical threshold. Complete application much of which is already available in a
services or technologies while information, along with final deadlines variety of CMS documents and in
preserving some of the incentives for submitting a full application, will be various places on CMS’s Web site, in a
inherent under an average-based available on our Web site at: http:// user-friendly format. In the meantime,
prospective payment system. The www.cms.hhs.gov/AcuteInpatientPPS/ we invite any product developers with
payment mechanism is based on the 08_newtech.asp#TopOfPage. To allow specific issues involving the agency to
cost to hospitals for the new medical interested parties to identify the new contact us early in the process of
service or technology. Under § 412.88, if medical services or technologies under product development if they have
the costs of the discharge (determined review before the publication of the questions or concerns about the
by applying CCRs as described in proposed rule for FY 2010, the Web site evidence that would be needed later in
§ 412.84(h)) exceed the full DRG will also list the tracking forms the development process for the
payment, Medicare will make an add-on completed by each applicant. agency’s coverage decisions for
payment equal to the lesser of: (1) 50 The Council on Technology and Medicare.
percent of the estimated costs of the Innovation (CTI) at CMS oversees the The CTI aims to provide information
new technology (if the estimated costs agency’s cross-cutting priority on on CTI activities to stakeholders,
for the case including the new coordinating coverage, coding and including Medicare beneficiaries,
technology exceed Medicare’s payment) payment processes for Medicare with advocates, medical product
or (2) 50 percent of the difference respect to new technologies and manufacturers, providers, and health
between the full DRG payment and the procedures, including new drug policy experts, and other stakeholders
hospital’s estimated cost for the case. If therapies, as well as promoting the with useful information on CTI
the amount by which the actual costs of exchange of information on new initiatives. Stakeholders with further
a new medical service or technology technologies between CMS and other questions about Medicare’s coverage,
case exceeds the full DRG payment entities. The CTI, composed of senior coding, and payment processes, or who
(including payments for IME and DSH, CMS staff and clinicians, was want further guidance about how they
but excluding outlier payments) by established under section 942(a) of Pub. can navigate these processes, can
more than the 50-percent marginal cost L. 108–173. It is co-chaired by the contact the CTI at CTI@cms.hhs.gov or
factor, Medicare payment is limited to Director of the Center for Medicare from the ‘‘Contact Us’’ section of the CTI
the full DRG payment plus 50 percent Management (CMM), who is also home page (http://www.cms.hhs.gov/
of the estimated costs of the new designated as the CTI’s Executive CouncilonTechInnov/).
technology. Coordinator, and the Director of the
Section 1886(d)(4)(C)(iii) of the Act Office of Clinical Standards and Quality 2. Public Input Before Publication of a
requires that the adjustments to annual (OCSQ). Notice of Proposed Rulemaking on Add-
DRG classifications and relative weights The specific processes for coverage, On Payments
must be made in a manner that ensures coding, and payment are implemented Section 1886(d)(5)(K)(viii) of the Act,
that aggregate payments to hospitals are by CMM, OCSQ, and the local claims- as amended by section 503(b)(2) of Pub.
not affected. Therefore, in the past, we payment contractors (in the case of local L. 108–173, provides for a mechanism
accounted for projected payments under coverage and payment decisions). The for public input before publication of a
the new medical service and technology CTI supplements rather than replaces notice of proposed rulemaking regarding
jlentini on PROD1PC65 with PROPOSALS2
provision during the upcoming fiscal these processes by working to assure whether a medical service or technology
year at the same time we estimated the that all of these activities reflect the represents a substantial clinical
payment effect of changes to the DRG agency-wide priority to promote high- improvement or advancement. The
classifications and recalibration. The quality, innovative care, and at the same process for evaluating new medical
impact of additional payments under time to streamline, accelerate, and service and technology applications
this provision was then included in the improve coordination of these processes requires the Secretary to—
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23611
• Provide, before publication of a comments were received at the end of updates, and allow for the use of
proposed rule, for public input the discussion of each application. external data for determining new
regarding whether a new service or Comment: One commenter addressed technology payments (when CMS
technology represents an advance in the substantial clinical improvement determines that the external data are
medical technology that substantially criterion. A medical device association unbiased and valid).
improves the diagnosis or treatment of stated that CMS’ interpretation of the Response: Section 1886(d)(5)(K)(viii)
Medicare beneficiaries; statutory criteria for new technology of the Act requires that CMS accept
• Make public and periodically add-on payments is narrow and makes comments, recommendations, and data
update a list of the services and it difficult for potential applicants, from the public regarding whether a
technologies for which applications for especially small manufacturing service or technology represents a
add-on payments are pending; companies, to qualify for new substantial clinical improvement.
• Accept comments, technology add-on payments. The Because the comments above are not
recommendations, and data from the commenter urged CMS to ‘‘deem a related to the substantial clinical
public regarding whether a service or device to satisfy the substantial clinical improvement criterion of pending
technology represents a substantial improvement criteria if it was granted a applications, we are not providing a
clinical improvement; and humanitarian device exemption or response to them in this proposed rule.
• Provide, before publication of a priority review based on the fact that it
proposed rule, for a meeting at which represents breakthrough technologies, 3. FY 2009 Status of Technologies
organizations representing hospitals, which offer significant advantages over Approved for FY 2008 Add-On
physicians, manufacturers, and any existing approved alternatives, for Payments
other interested party may present which no alternatives exist, or the
comments, recommendations, and data We did not approve any applications
availability of which is in the best for new technology add-on payments for
regarding whether a new medical interests of the patients.’’ In addition,
service or technology represents a FY 2008. For additional information,
the commenter remarked that this
substantial clinical improvement to the refer to the FY 2008 IPPS final rule with
process would simplify CMS’ evaluation
clinical staff of CMS. comment period (72 FR 47305 through
of applications for new technology add-
In order to provide an opportunity for 47307).
on payments and would promote access
public input regarding add-on payments to innovative treatments, as intended by 4. FY 2009 Applications for New
for new medical services and Congress. Although the commenter also Technology Add-On Payments
technologies for FY 2009 before made remarks that were unrelated to
publication of the FY 2009 IPPS We received four applications to be
substantial clinical improvement,
proposed rule, we published a notice in because the purpose of the town hall considered for new technology add-on
the Federal Register on December 28, meeting was specifically to discuss payment for FY 2009. A discussion of
2007 (72 FR 73845 through 73847), and substantial clinical improvement of each of these applications is presented
held a town hall meeting at the CMS pending new technology applications, below. We note that, in the past, we
Headquarters Office in Baltimore, MD, those comments are not summarized in have considered applications that had
on February 21, 2008. In the this proposed rule. not yet received FDA approval, but were
announcement notice for the meeting, Response: With respect to the anticipating FDA approval prior to
we stated that the opinions and comment that CMS has a narrow publication of the IPPS final rule. In
alternatives provided during the interpretation of the statute that makes such cases, we generally provide a more
meeting would assist us in our it difficult for applicants to meet the limited discussion of those technologies
evaluations of applications by allowing statutory criteria for a new technology in the proposed rule because it is not
public discussion of the substantial add-on payment, we note that we have known if these technologies will meet
clinical improvement criterion for each already specifically addressed the issue the newness criterion in time for us to
of the FY 2009 new medical service and in the past (71 FR 47997 and 72 FR conduct a complete analysis in the final
technology add-on payment 47301). In addition, we addressed the rule. This year, three out of four
applications before the publication of comment concerning automatically applicants do not yet have FDA
the FY 2009 IPPS proposed rule. deeming technologies granted a approval. Consequently, we have
Approximately 70 individuals humanitarian device exemption (HDE) presented a limited analysis of them in
attended the town hall meeting in at 72 FR 47302. Further, because the this proposed rule.
person, while approximately 20 purpose of the new technology town a. CardioWestTM Temporary Total
additional participants listened over an hall meeting was to discuss substantial Artificial Heart System (CardioWestTM
open telephone line. Each of the four FY clinical improvement of pending TAH–t)
2009 applicants presented information applications, we are not providing a
on its technology, including a focused response to the unrelated comments in SynCardia Systems, Inc. submitted an
discussion of data reflecting the this proposed rule. application for approval of the
substantial clinical improvement aspect Comment: One commenter, a medical CardioWestTM temporary Total Artificial
of the technology. We received two technology association, submitted Heart system (TAH–t) for new
comments during the town hall meeting, comments in reference to the MS–DRGs technology add-on payments for FY
which are summarized below. We and the need to account for complexity 2009. The TAH–t is a technology that is
considered each applicant’s as well as severity in making used as a bridge to heart transplant
presentation made at the town hall refinements to the DRG classification device for heart transplant-eligible
meeting, as well as written comments system. The commenter also made the patients with end-stage biventricular
jlentini on PROD1PC65 with PROPOSALS2
submitted on each applicant’s following comments: CMS should raise failure. The TAH–t pumps up to 9.5
application, in our evaluation of the the new technology marginal cost factor, liters of blood per minute. This high
new technology add-on applications for adjust the newness policy to begin with level of perfusion helps improve
FY 2009 in this proposed rule. We have the issuance of an ICD–9–CM code hemodynamic function in patients, thus
summarized these comments below or, instead of the FDA approval date, making them better heart transplant
if applicable, indicated that no provide access to the quarterly MedPAR candidates.
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23612 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
The TAH–t was approved by the FDA 9–CM code(s) (described below in the case-weighted threshold or case-
on October 15, 2004, for use as a bridge cost threshold discussion) since the weighted standardized charge per case.
to transplant device in cardiac time of its FDA approval, because the In addition to analyzing the costs of
transplant-eligible candidates at risk of TAH–t has not been covered under the actual cases involving the TAH–t, the
imminent death from biventricular Medicare program (and, therefore, no applicant searched the FY 2006
failure. The TAH–t is intended to be Medicare payment has been made for MedPAR file to identify cases involving
used in hospital inpatients. Some of the this technology), this code is not ‘‘used patients who would have potentially
FDA’s post-approval requirements with respect to inpatient hospital been eligible to receive the TAH–t. The
include that the manufacturer agree to services for which payment’’ is made applicant submitted three different
provide a post-approval study under the IPPS, and thus we assume MedPAR analyses. The first MedPAR
demonstrating that the success of the that none of the costs associated with analysis involved a search for cases
device at one center can be reproduced this technology would be reflected in using ICD–9–CM diagnosis code 428.0
at other centers. The study was to the Medicare claims data used to (Congestive heart failure) in
include at least 50 patients who will be recalibrate the MS–DRG weights. For combination with ICD–9–CM procedure
followed up to 1 year, including (but not this reason, despite its FDA approval code 37.66 (Insertion of implantable
limited to) the following endpoints; date, it appears that this technology heart assist system), and an inpatient
survival to transplant, adverse events, would still be eligible to be considered hospital length of stay greater than or
and device malfunction. ‘‘new’’ for purposes of the new equal to 60 days. The applicant found
Presently, Medicare does not cover technology add-on payment if and when two cases that met this criterion, which
artificial heart devices, including the the proposal to reverse the national had an average standardized charge per
TAH–t. However, on February 01, 2008, noncoverage determination concerning case of $821,522. The second MedPAR
CMS proposed to reverse a national this technology is finalized. Therefore, analysis searched for cases with ICD–9–
noncoverage determination that would based on this information, it appears CM diagnosis code 428.0 (Congestive
extend coverage to this technology that the TAH–t would meet the newness heart failure) and one or more of the
within the confines of an FDA-approved criterion on the date that Medicare following ICD–9–CM procedure codes:
clinical study. (To view the proposed coverage begins, should the proposed 37.51 (Heart transplant), 37.52
National Coverage Determination (NCD), NCD be finalized. (Implantation of total heart replacement
we refer readers to the CMS Web site at In an effort to demonstrate that TAH– system), 37.64 (Removal of heart assist
http://www.cms.hhs.gov/mcd/viewdraft t would meet the cost criterion, the system), 37.66 (Insertion of implantable
decisionmemo.asp?from2= applicant submitted data based on 28 heart assist system), or 37.68 (Insertion
viewdraftdecisionmemo.asp&id=211&.) actual cases of the TAH–t. The data of percutaneous external heart assist
Should this proposal be finalized, it included 6 cases (or 21.4 percent of device), and a length of stay greater than
would become effective on May 01, cases) from 2005, 13 cases (or 46.5 or equal to 60 days. The applicant found
2008. Because Medicare’s existing percent of cases) from 2006, 7 cases (or 144 cases that met this criterion, which
coverage policy with respect to this 25 percent of cases) from 2007, and 2 had an average standardized charge per
device has precluded it from being paid cases (or 7.1 percent of cases) from case of $841,827. The final MedPAR
for by Medicare, we would not expect 2008. Currently, cases involving the analysis searched for cases with ICD–9–
the costs associated with this TAH–t are assigned to MS–DRG 215 CM procedure code 37.51 (Heart
technology to be currently reflected in (Other Heart Assist System Implant). As transplant) in combination with one of
the data used to determine MS–DRGs discussed below in this section, we are the following ICD–9–CM procedure
relative weights. As we have indicated proposing to remove the TAH–t from codes: 37.52 (Implantation of total heart
in the past, although we generally MS–DRG 215 and reassign the TAH–t to replacement system), 37.65
believe that the newness period would MS–DRGs 001 (Heart Transplant or (Implantation of external heart system),
begin on the date that FDA approval Implant of Heart Assist System with or 37.66 (Insertion of implantable heart
was granted, in cases where the MCC) and 002 (Heart Transplant or assist system). The applicant found 37
applicant can demonstrate a Implant of Heart Assist System without cases that met this criterion, which had
documented delay in market availability MCC). Therefore, to determine if the an average standardized charge per case
subsequent to FDA approval, we would technology meets the cost criterion, it is of $896,601. Because only two cases met
consider delaying the start of the appropriate to compare the average the criterion for the first analysis,
newness period. This technology’s standardized charge per case to the consistent with historical practice, we
situation represents one such case. We thresholds for MS–DRGs 001, 002, and would not consider it to be of statistical
also note that section 215 included in Table 10 of the significance and, therefore, would not
1886(d)(5)(K)(ii)(II) of the Act requires November 27, 2007 interim final rule rely upon it to demonstrate whether the
that we provide for the collection of cost (72 FR 66888 through 66889). The TAH–t would meet the cost threshold.
data for a new medical service or thresholds for MS–DRGs 001, 002, and However, both of the additional
technology for a period of at least 2 215 from Table 10 are $345,031, analyses seem to provide an adequate
years and no more than 3 years $178,142, and $151,824, respectively. number of cases to demonstrate whether
‘‘beginning on the date on which an Based on the 28 cases the applicant the TAH–t would meet the cost
inpatient hospital code is issued with submitted, the average standardized threshold. We assume that none of the
respect to the service or technology.’’ charge per case was $731,632. Because costs associated with this technology
Furthermore, the statute specifies that the average standardized charge per case would be reflected in the MedPAR
the term ‘‘inpatient hospital code’’ is much greater than the thresholds analyses that the applicant used to
jlentini on PROD1PC65 with PROPOSALS2
means any code that is used with cited above for MS–DRG 215 (and MS– demonstrate that the technology would
respect to inpatient hospital services for DRGs 001 and 002, should the proposal meet the cost criterion. We note that,
which payment may be made under the to reassign the TAH–t be finalized), the under all three of the analyses the
IPPS and includes ICD–9–CM codes and applicant asserted that the TAH–t meets applicant performed, it identified cases
any subsequent revisions. Although the the cost criterion whether or not the that would have been eligible for the
TAH–t has been described by the ICD– costs were analyzed by using either a TAH–t, but did not remove charges that
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23613
were unrelated to the TAH–t, nor did b. Emphasys Medical Zephyr standardized charge per case does not
the applicant insert a proxy of charges Endobronchial Valve (Zephyr EBV) include charges related to the Zephyr
related to the TAH–t. However, as stated Emphasys Medical submitted an EBV; therefore, it is necessary to add the
above, the average standardized charge application for new technology add-on charges related to the device to the
per case is much greater than any of the payments for FY 2009 for the Emphasys average standardized charge per case in
thresholds for MS–DRGs 001, 002, and Medical Zephyr Endobronchial Valve evaluating the cost threshold criteria.
215. Therefore, even if the applicant (Zephyr EBV). The Zephyr EBV is Although the applicant submitted data
were to approximate what the costs of intended to treat patients with related to the estimated cost of the
cases eligible to receive the TAH–t emphysema by reducing volume in the Zephyr EBV per case, the applicant
would have been by removing non- diseased, hyperinflated portion of the noted that the cost of the device was
TAH–t associated charges and inserting emphysematous lung with fewer risks proprietary information because the
charges related to the TAH–t, it appears and complications than with more device is not yet available on the open
that the average standardized charges invasive surgical alternatives. Zephyr market. The applicant estimates $23,920
per case for cases eligible for the TAH– EBV therapy involves placing small, in charges related to the Zephyr EBV
t would exceed the relevant thresholds one-way valves in the patients’ airways (based on a 100 percent charge markup
from Table 10 (as discussed above) and to allow air to flow out of, but not into, of the cost of the device). In addition to
would therefore appear to meet the cost the diseased portions of the lung thus case-weighting the data based on the
criterion. We invite public comment on reducing the hyperinflation. A typical amount of cases that the applicant
whether TAH–t meets the cost criterion. procedure involves placing three to four found in the FY 2006 MedPAR file, the
As noted in section II.G. of this valves in the target lobe using a applicant case-weighted the data based
preamble, we are proposing to remove bronchoscope, and the procedure takes on its own projections of how many
the TAH–t from MS–DRG 215 and approximately 20 to 40 minutes to Medicare cases it would expect to map
reassign the TAH–t to MS–DRGs 001 complete. The Zephyr EBVs are to MS–DRGs 190, 191, and 192 in FY
and 002. As stated earlier, CMS is designed to be relatively easy to place, 2009. The applicant projects that, 5
proposing to reverse a national and are intended to be removable so percent of the cases would map to MS–
noncoverage determination that would that, unlike more risky surgical DRG 190, 15 percent of the cases would
extend coverage to artificial heart alternatives such as Lung Volume map to MS–DRG 191, and 80 percent of
devices within the confines of an FDA- Reduction Surgery (LVRS) or Lung the cases would map to MS–DRG 192.
approved clinical study, effective May Transplant, the procedure has the Adding the charges related to the device
1, 2008. If this proposal is finalized, the potential to be fully reversible. to the average standardized charge per
MCE will require both the procedure Currently, the Zephyr EBV has yet case (based on the applicant’s projected
code 37.52 (Implantation of total to receive approval from the FDA, but case distribution) resulted in a case-
replacement heart system) and the the manufacturer indicated to CMS that weighted average standardized charge
diagnosis code reflecting clinical trial— it expects to receive its FDA approval in per case of $36,782 ($12,862 plus
V70.7 (Examination of participant in the second or third quarter of 2008. $23,920). Using the thresholds
clinical trial). As we have previously Because the technology is not yet published in Table 10 (72 FR 66889),
mentioned, the TAH–t appears to meet approved by the FDA, we will limit our the case-weighted threshold for MS–
the cost thresholds for MS–DRGs 001, discussion of this technology to data DRGs 190, 191, and 192 was $18,394.
002, and 215. Therefore, its proposed that the applicant submitted, rather than Because the case-weighted average
reassignment from MS–DRG 215 to MS– make specific proposals with respect to standardized charge per case for the
DRGs 001 and 002 should have no whether the device would meet the new applicable MS–DRGs exceed the case-
material effect on meeting the cost technology add-on criteria. weighted threshold amount, the
thresholds in MS–DRGs 001 and 002 In an effort to demonstrate that the applicant maintains that the Zephyr
should the reassignment proposal be Zephyr EBV would meet the cost EBV would meet the cost criterion. As
finalized. criterion, the applicant searched the FY noted above, the applicant also
The manufacturer states that the 2006 MedPAR file for cases with one of performed a case-weighted analysis of
TAH–t is the only mechanical the following ICD–9–CM diagnosis the data based on the 14,653 cases the
circulatory support device intended as a codes: 492.0 (Emphysematous bleb), applicant found in the FY 2006
bridge-to-transplant for patients with 492.8 (Other emphysema, NEC), or 496 MedPAR file. Based on this analysis, the
irreversible biventricular failure. It also (Chronic airway obstruction, NEC). applicant found that the case-weighted
asserts that the TAH–t improves clinical Based on the diagnosis codes searched average standardized charge per case
outcomes because it has been shown to by the applicant, cases of the Zephyr ($38,441 based on the 14,653 cases)
reduce mortality in patients who are EBV would be most prevalent in MS– exceeded the case-weighted threshold
otherwise in end-stage heart failure. In DRGs 190 (Chronic Obstructive ($20,606 based on the 14,653 cases).
addition, the manufacturer claims that Pulmonary Disease with MCC), 191 Based on both analyses described above,
the TAH–t provides greater (Chronic Obstructive Pulmonary Disease it appears that the applicant would meet
hemodynamic stability and end-organ with CC), and 192 (Chronic Obstructive the cost criterion. We invite public
perfusion, thus making patients who Pulmonary Disease without CC/MCC). comment on whether Zephyr EBV
receive it better candidates for eventual The applicant found 1,869 cases (or 12.8 meets the cost criterion.
heart transplant. We welcome percent of cases) in MS–DRG 190, 5,789 The applicant asserts that the
comments from the public regarding cases (or 39.5 percent of cases) in MS– Zephyr EBV is a substantial clinical
whether the TAH–t represents a DRG 191, and 6,995 cases (or 47.7 improvement because it provides a new
jlentini on PROD1PC65 with PROPOSALS2
substantial clinical improvement. percent of cases) in MS–DRG 192 therapy along the continuum of care for
We did not receive any written (which equals a total of 14,653 cases). patients with emphysema that offers
comments or public comments at the The average standardized charge per improvement in lung function over
town hall meeting regarding the case was $21,567 for MS–DRG 190, standard medical therapy while
substantial clinical improvement $15,494 for MS–DRG 191, and $11,826 incurring significantly less risk than
aspects of this technology. for MS–DRG 192. The average more invasive treatments such as LVRS
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23614 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
and lung transplant. Specifically, the Zephyr EBV represents a substantial several years. We also note that
applicant submitted data from the clinical improvement in the treatment of Oxiplex has been marketed as an
ongoing pivotal Endobronchial Valve for patients with emphysema. adhesion barrier in other countries
Emphysema Palliation (VENT) trial,14 We received written comments from outside of the United States. The
which compared 220 patients who the manufacturer and its presenters at manufacturer maintains that Oxiplex
received EBV treatment to 101 patients the town hall meeting clarifying some is different from adhesion barriers in
who received standard medical therapy, questions that were raised at the town several ways, including chemical
including bronchodilators, steroids, hall meeting. Specifically, these composition, method of action, surgical
mucolytics, and supplemental oxygen. commenters explained that, in general, application (that is, it is applied
At 6 months, patients who received the the target population for the Zephyr liberally to the nerve root and
Zephyr EBV had an average of 7.2 EBV device was the same population surrounding neural tissues as opposed
percent and 5.8 percent improvement that could benefit from LVRS, and also to minimally only to nerve elements),
(compared to standard medical therapy) includes some patients who were too and tissue response (noninflammatory
in the primary effectiveness endpoints sick to undergo surgery. The as opposed to inflammatory). We
of the Forced Expiratory Volume in 1 commenters also explained that patients welcome comments from the public on
second test (FEV1), and the 6 Minute with emphysema with more this issue.
Walk Test (6MWT), respectively. Both heterogeneous lung damage were more In an effort to demonstrate that the
results were determined by the likely to benefit from the device. technology meets the cost criterion, the
applicant to be statistically significant. We welcome public comments applicant searched the FY 2006
The FEV1 results were determined regarding where exactly this technology MedPAR file for cases with ICD–9–CM
using the t-test parametric confidence falls in the continuum of care of patients procedure codes 03.09 (Other
intervals (the p value determined using with emphysema, and for whom the exploration and decompression of
the one-side t-test adjusted for unequal risk/benefit ratio is most favorable. spinal canal) or 80.51 (Excision of
variance) and the 6MWT results were c. Oxiplex interveterbral disc) that mapped to CMS
determined using the Mann-Whitney DRGs 499 and 500 (CMS DRGs 499 and
FzioMed, Inc. submitted an 500 are crosswalked to MS–DRGs 490
nonparametric confidence intervals (the
application for new technology add-on and 491 (Back and Neck Procedures
p value was calculated using the one-
payments for FY 2009 for Oxiplex. except Spinal Fusion with or without
sided Wilcoxon rank sum test).
Oxiplex is an absorbable, viscoelastic CC)). Because these cases do not include
However, the data also showed that
gel made of carboxymethylcellulose charges associated with the technology,
patients who received the Zephyr EBV
(CMC) and polyethylene oxide (PEO) the applicant determined it was
experienced a number of adverse events, that is intended to be surgically
including hemoptyis, pneumonia, necessary to add an additional $7,143 in
implanted during a posterior charges to the average standardized
respiratory failure, pneumothorax, and discectomy, laminotomy, or
COPD exacerbations, as well as valve charge per case of cases that map to
laminectomy. The manufacturer asserts MS–DRGs 490 and 491. (To do this, the
migrations and expectorations that, in that the gel reduces the potential for
some cases, required repeat applicant used a methodology of
inflammatory mediators that injure, inflating the costs of the technology by
bronchoscopy. The manufacturer also tether, or antagonize the nerve root in
submitted the VENT pivotal trial 1-year the average CCR computed by using the
the epidural space by creating an average costs and charges for supplies
follow-up data, but has requested that acquiescent, semi-permeable
the data not be disclosed because it has for cases with ICD–9–CM procedure
environment to protect against localized codes 03.09 and 80.51 that map to MS–
not yet been presented publicly nor debris. These proinflammatory
published in a peer-reviewed journal. DRGs 490 and 491). Of the 221,505
mediators (phospholipase A and nitric cases the applicant found, 95,340 cases
While CMS recognizes that the
oxide), induced or extruded by (or 43 percent of cases) would map to
Zephyr EBV therapy is significantly
intervertebral discs, may be responsible MS–DRG 490, which has an average
less risky than LVRS and lung
for increased pain during these standardized charge of $60,301, and
transplant, we are concerned that the
procedures. The manufacturer also 126,165 cases (or 57 percent of cases)
benefits as shown in the VENT pivotal
asserts that Oxiplex is a unique would map to MS–DRG 491, which has
trial may not outweigh the risks when
material in that it coats tissue, such as an average standardized charge per case
compared with medical therapy alone.
the nerve root in the epidural space, to of $43,888. This resulted in a case-
Further, we note that, according to the
protect the nerve root from the effects of weighted average standardized charge
applicant, the Zephyr EBV is intended
inflammatory mediators originating per case of $50,952. The case-weighted
for use in many patients who are
from either the nucleus pulposus, from threshold for MS–DRGs 490 and 491
ineligible for LVRS and/or lung
blood derived inflammatory cells, or was $27,481. Because the case-weighted
transplant (including those too sick to
cytokines during the healing process. average standardized charge per case
undergo more invasive surgery and Oxiplex is expecting to receive exceeds the case-weighted threshold in
those with lower lobe predominant premarket approval from the FDA by MS–DRGs 490 and 491, the applicant
disease distribution), but that certain June 2008. Because the technology is maintains that Oxiplex would meet
patients (that is, those with upper lobe not yet approved by the FDA, we will the cost criterion. We invite public
predominant disease distribution) could limit our discussion of this technology comment on whether Oxiplex meets
be eligible for either surgery or the to data that the applicant submitted, the cost criterion.
Zephyr EBV. We welcome comments rather than make specific proposals The manufacturer maintains that
from the public on both the patient with respect to whether the device Oxiplex is a substantial clinical
jlentini on PROD1PC65 with PROPOSALS2
population who would be eligible for would meet the new technology add-on improvement because it ‘‘creates a
the technology, and whether the payment criteria. protective environment around the
14 Strange, Charlie., et al., design of the
With regard to the newness criterion, neural tissue that limits nerve root
Endobronchial Valve for Emphysema Palliation trial
we are concerned that Oxiplex may be exposure to post-surgical irritants and
(VENT): A Nonsurgical Method of Lung Volume substantially similar to adhesion damage and thus reduces adverse
Reduction, BMC Pulmonary Medicine. 2007; 7:10. barriers that have been on the market for outcomes associated with Failed Back
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23615
Surgery Syndrome (FBSS) following blood. The superoxygenated blood is specifically searched for cases with
surgery.’’ The manufacturer also claims delivered directly to the infarct-related primary ICD–9–CM diagnosis code
that the Oxiplex gel reduces leg and artery via the TherOx infusion catheter. 410.00 (Acute myocardial infarction of
back pain after discectomy, SSO2 therapy is a catheter laboratory- anterolateral wall with episode of care
laminectomy, and laminotomy. The based procedure. Additional time in the unspecified), 410.01 (Acute myocardial
manufacturer also asserts that the use of catheter lab area is an average of 100 infarction of anterolateral wall with
Oxiplex is consistent with fewer minutes. The manufacturer claims that initial episode of care), 410.10 (Acute
revision surgeries. (During the FDA the SSO2 therapy duration lasts 90 myocardial infarction of other anterior
Investigational Device Exemption (IDE) minutes and requires an additional 10 wall with episode of care unspecified),
trial, one Oxiplex patient required minutes post-procedure preparation for or 410.11 (Acute myocardial infarction
revision surgery compared to six control transfer time. The TherOx of other anterior wall with initial
patients.) However, as we noted Downstream System is currently not episode of care) in combination with
previously in this section, we are FDA approved; however, the ICD–9–CM procedure code of 36.06
concerned that Oxiplex may be manufacturer states that it expects to (Insertion of non-drug-eluting coronary
substantially similar to adhesion receive FDA approval in the second artery stent(s)) or 36.07 (Insertion of
barriers that have been on the market for quarter of 2008. Because the technology drug-eluting coronary artery stent(s)).
several years. We are also concerned is not yet approved by the FDA, we will The applicant’s search found 13,527
that even if we were to determine that limit our discussion of this technology cases within MS–DRGs 246, 247, 248,
Oxiplex is not substantially similar to to data that the applicant submitted, and 249 distributed as follows: 2,287
existing adhesion barriers, there may rather than make specific proposals cases (or 16.9 percent of cases) in MS–
still be insufficient evidence to support with respect to whether the device DRG 246; 9,691 cases (or 71.6 percent of
the manufacturer’s claims that Oxiplex would meet the new technology add-on cases) in MS–DRG 247; 402 cases (or 3
reduces pain associated with spinal criteria. percent of cases) in MS–DRG 248; and
surgery. In addition, we have found no In an effort to demonstrate that it 1,147 cases (or 8.5 percent of cases) in
evidence to support the manufacturer’s would meet the cost criterion, the MS–DRG 249. Not including the charges
claims regarding mode of action, degree applicant submitted two analyses. The associated with the technology, the
of dural healing, degree of wound geometric mean standardized charge per
applicant believes that cases that would
healing, and local tissue response such case for MS–DRGs 246, 247, 248, and
be eligible for the Downstream System
as might be shown in animal studies. 249 was $59,631, $42,357, $49,718 and
would most frequently group to MS–
We welcome comments from the public $37,446, respectively. Therefore, based
DRGs 246 (Percutaneous Cardiovascular
regarding whether Oxiplex represents on this analysis, the total case-weighted
Procedure with Drug-Eluting Stent with
a substantial clinical improvement. geometric mean standardized charge per
We did not receive any written MCC or 4+Vessels/Stents), 247
(Percutaneous Cardiovascular Procedure case across these MS–DRGs was
comments or public comments at the $45,080. The applicant estimated that it
town hall meeting regarding the with Drug-Eluting Stent without MCC),
248 (Percutaneous Cardiovascular was necessary to add an additional
substantial clinical improvement $21,620 in charges to the total case-
aspects of this technology. Procedure with Non-Drug-Eluting Stent
with MCC or 4+Vessels/Stents), and 249 weighted geometric mean standardized
d. TherOx Downstream System (Percutaneous Cardiovascular Procedure charge per case. The applicant included
TherOx, Inc. submitted an application with Non-Drug-Eluting Stent without charges for supplies and tests related to
for new technology add-on payments for MCC). The first analysis used data based the technology, charges for 100 minutes
FY 2009 for the TherOx Downstream on 83 clinical trial patients from 10 of additional procedure time in the
System (Downstream System). The clinical sites. Of the 83 cases, 78 were catheter laboratory and charges for the
Downstream System uses assigned to MS–DRGs 246, 247, 248, or technology itself in the additional
SuperSaturatedOxygen Therapy (SSO2) 249. The data showed that 32 of these charge amount referenced above. The
that is designed to limit myocardial patients were 65 years old or older. inclusion of these charges would result
necrosis by minimizing microvascular There were 12 cases (or 15.4 percent of in a total case-weighted geometric mean
damage in acute myocardial infarction cases) in MS–DRG 246, 56 cases (or 71.8 standardized charge per case of $66,700.
(AMI) patients following intervention percent of cases) in MS–DRG 247, 2 The case-weighted threshold for MS–
with Percutaneous Transluminal cases (or 2.6 percent of cases) in MS– DRGs 246, 247, 248, and 249 (from
Coronary Angioplasty (PTCA), and DRG 248, and 8 cases (or 10.3 percent Table 10 (72 FR 66889)) was $49,714.
coronary stent placement by perfusing of cases) in MS–DRG 249. (The Because the total case-weighted average
the affected myocardium with blood remaining five cases grouped to MS– standardized charge per case from the
that has been supersaturated with DRGs that the technology would not first analysis and the case-weighted
oxygen. SSO2 therapy refers to the frequently group to and therefore are not geometric mean standardized charge per
delivery of superoxygenated arterial included in this analysis.) The average case from the second analysis exceeds
blood directly to areas of myocardial standardized charge per case for MS– the applicable case-weighted threshold,
tissue that have been reperfused using DRGs 246, 247, 248, and 249 was the applicant maintains the
PTCA and stent placement, but which $66,730, $53,963, $54,977, and $41,594, Downstream System would meet the
may still be at risk. The desired effect respectively. The case-weighted average cost criterion. We invite public
of SSO2 therapy is to reduce infarct size standardized charge per case for the four comment on whether Downstream
and thus preserve heart muscle and MS–DRGs listed above is $54,665. Based System meets the cost criterion.
function. The DownStream System is on the threshold from Table 10 (72 FR The applicant asserts that the
jlentini on PROD1PC65 with PROPOSALS2
the console portion of a disposable 66890), the case-weighted threshold for Downstream System is a substantial
cartridge-based system that withdraws a the four MS–DRGs listed above was clinical improvement because it reduces
small amount of the patient’s arterial $49,303. The applicant also searched infarct size in acute AMI where PTCA
blood, mixes it with a small amount of the FY 2006 MedPAR file to identify and stent placement have also been
saline, and supersaturates it with cases that would be eligible for the performed. Data was submitted from the
oxygen to create highly oxygen-enriched Downstream System. The applicant Acute Myocardial Infarction Hyperbaric
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23616 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Oxygen Treatment (AMIHOT) II trial, point at which data begin to become We have advised prior and potential
which was presented at the October available reflecting the ICD–9–CM code applicants that we evaluate whether a
2007 Transcatheter Cardiovascular assigned to the new service or medical service or technology is eligible
Therapeutics conference, but has not technology. The point at which these for the new medical service or
been published in peer reviewed data become available typically begins technology add-on payments prior to
literature, that showed an average of 6.5 when the new medical service or publication of the final rule setting forth
percent reduction in infarct size as technology is first introduced on the the annual updates and changes to the
measured with Tc–99m Sestamibi market, generally on the date that the IPPS, with the results of our
imaging in patients who received medical service or technology receives determination announced in the final
supersaturated oxygen therapy. We note FDA approval. Accordingly, for rule. We announce our results in the
that those patients also showed a purposes of the new medical service or final rule for each fiscal year because we
significantly higher incidence of technology add-on payment, a medical believe predictability is an important
bleeding complications. While we service or technology cannot be aspect of the IPPS and that it is
recognize that a reduction of infarct size considered new prior to the date on important to apply a consistent payment
may correlate with improved clinical which FDA approval is granted. methodology for new medical services
outcomes, we question whether the In addition, as stated in section III.J.1. or technologies throughout the entire
degree of infarct size reduction found in of the preamble of this proposed rule, fiscal year. For example, hospitals must
the trial represents a substantial clinical § 412.87(b)(3) of our existing regulations train their billing and other staff after
improvement, particularly in light of the provides that, to be eligible for the add- publication of the final rule to properly
apparent increase in bleeding on payment for new medical services or implement the coding and payment
complications. We welcome comments technologies, the DRG prospective changes for the upcoming fiscal year set
from the public on this matter. payment rate otherwise applicable to forth in the final rule. In addition,
We received one written comment the discharge involving the new medical hospitals’ budgetary process and
from the manufacturer clarifying service or technology must be assessed clinical decisions regarding whether to
questions that were raised at the town for adequacy. Under the cost criterion, utilize new technologies are based in
hall meeting. Specifically, the to assess the adequacy of payment for a part on the applicable payment rates
commenter explained the methodology new medical service or technology paid under the IPPS for the upcoming fiscal
of Tc–99m Sestamibi scanning and under the applicable DRG prospective year, including whether the new
interpretation in the AMIHOT II trial. In payment rate, we evaluate whether the medical services or technologies qualify
addition, the commenter explained that charges for cases involving the new for the new medical service or
the AMIHOT 15 and AMIHOT II trials medical service or technology exceed technology add-on payment. If CMS
did not attempt to measure differences certain threshold amounts. were to make multiple payment changes
in heart failure outcomes nor mortality Section 412.87(b)(1) of our existing
under the IPPS during a fiscal year,
outcomes. regulations provides that, to be eligible
these changes could adversely affect the
for the add-on payment for new medical
5. Proposed Regulatory Change decisions hospitals implement at the
services or technologies, the new
beginning of the fiscal year. For these
Section 1886(d)(5)(K)(i) of the Act medical service or technology must
reasons, we believe applications for new
directs us to establish a mechanism to represent an advance that substantially
medical service or technology add-on
recognize the cost of new medical improves, relative to technologies
payments should be evaluated prior to
services and technologies under the previously available, the diagnosis or
publication of the final IPPS rule for
IPPS, with such mechanism established treatment of Medicare beneficiaries. In
each fiscal year. Therefore, if an
after notice and opportunity for public addition, § 412.87(b)(1) states that CMS
will announce its determination as to application does not meet the new
comment. In accordance with this
whether a new medical service or medical service or technology add-on
authority, we established at § 412.87(b)
technology meets the substantial payment criteria prior to publication of
of our regulations criteria that a medical
clinical improvement criteria in the the final rule, it will not be eligible for
service or technology must meet in
Federal Register as part of the annual the new medical service or technology
order to qualify for the additional
updates and changes to the IPPS. add-on payments for the fiscal year for
payment for new medical services and
Since the implementation of the which it applied for the add-on
technologies. Specifically, we evaluate
policy on add-on payments for new payments.
applications for new medical service or
technology add-on payment by medical services and technologies, we Because we make our determination
determining whether they meet the accept applications for add-on payments regarding whether a medical service or
criteria of newness, adequacy of for new medical services and technology meets the eligibility criteria
payment, and substantial clinical technologies on an annual basis by a for the new medical service or
improvement. specified deadline. For example, technology add-on payments prior to
As stated in section III.J.1. of the applications for FY 2009 were publication of the final rule, we have
preamble of this proposed rule, submitted in November 2007. After advised both past and potential
§ 412.87(b)(2) of our existing regulations accepting applications, CMS then applicants that their medical service or
provides that a specific medical service evaluates them in the annual IPPS technology must receive FDA approval
or technology will be considered new proposed and final rules to determine early enough in the IPPS rulemaking
for purposes of new medical service or whether the medical service or cycle to allow CMS enough time to fully
technology add-on payments after the technology is eligible for the new evaluate the application prior to the
medical service or technology add-on publication of the IPPS final rule.
jlentini on PROD1PC65 with PROPOSALS2
15 Oneill, WW., et al., Acute Myocardial payment. If an application meets each of Moreover, because new medical services
Infarction with Hyperoxemic Therapy (AMIHOT): A the eligibility criteria, the medical or technologies that have not received
Prospective Randomized Trial of Intracoronary service or technology is eligible for new FDA approval do not meet the newness
Hyperoxemic Reperfusion after Percutaneous
Coronary Intervention. Journal of the American
medical service or technology add-on criterion, it would not be necessary or
College of Cardiology, Vol. 50, No. 5, 2007, pp. 397– payments beginning on the first day of prudent for us to make a final
405. the new fiscal year (that is, October 1). determination regarding whether a new
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23617
medical service or technology meets the we have always given consideration to accordance with the broad discretion
cost threshold and substantial clinical whether an application meets the new conferred under the Act, we currently
improvement criteria prior to the medical service or technology eligibility define hospital labor market areas based
medical service or technology receiving criteria in the annual IPPS proposed and on the definitions of statistical areas
FDA approval. In addition, we do not final rules. Rather, this proposal simply established by the Office of Management
believe it is appropriate for CMS to codifies our current practice of fully and Budget (OMB). A discussion of the
determine whether a medical service or evaluating new medical service or proposed FY 2009 hospital wage index
technology represents a substantial technology add-on payment based on the statistical areas, including
clinical improvement over existing applications prior to publication of the OMB’s revised definitions of
technologies before the FDA makes a final rule in order to maintain Metropolitan Areas, appears under
determination as to whether the medical predictability within the IPPS for the section III.C. of this preamble.
service or technology is safe and upcoming fiscal year. Beginning October 1, 1993, section
effective. For these reasons, we first In addition, we are proposing in new 1886(d)(3)(E) of the Act requires that we
determine whether a medical service or paragraph (c) of § 412.87 to set July 1 of update the wage index annually.
technology meets the newness criteria, each year as the deadline by which IPPS Furthermore, this section provides that
and only if so, do we then make a new medical service or technology add- the Secretary base the update on a
determination as to whether the on payment applications must receive survey of wages and wage-related costs
technology meets the cost threshold and FDA approval. This proposed deadline of short-term, acute care hospitals. The
represents a substantial clinical should provide us with enough time to survey must exclude the wages and
improvement over existing medical fully consider all of the new medical wage-related costs incurred in
services or technologies. For example, service or technology add-on payment furnishing skilled nursing services. This
even if an application has FDA criteria for each application and provision also requires us to make any
approval, if the medical service or maintain predictability in the IPPS for updates or adjustments to the wage
technology is beyond the timeline of 2– the coming fiscal year. index in a manner that ensures that
3 years to be considered new, in the past Finally, under this proposal, aggregate payments to hospitals are not
we have not made a determination on applications that have not received FDA affected by the change in the wage
the cost threshold and substantial approval by July 1 would not be index. The proposed adjustment for FY
clinical improvement. Further, as we considered in the final rule, even if they 2009 is discussed in section II.B. of the
have discussed in prior final rules (69 were summarized in the corresponding Addendum to this proposed rule.
FR 49018–49019 and 70 FR 47344), it is IPPS proposed rule. However, As discussed below in section III.I. of
our past and present practice to analyze applications that receive FDA approval this preamble, we also take into account
the new medical service or technology of the medical service or technology the geographic reclassification of
add-on payment criteria in the following after July 1 would be able to reapply for hospitals in accordance with sections
sequence: Newness, cost threshold, and the new medical service or technology 1886(d)(8)(B) and 1886(d)(10) of the Act
finally substantial clinical add-on payment the following year (at when calculating IPPS payment
improvement. Under our proposal in which time they would be given full amounts. Under section 1886(d)(8)(D) of
this proposed rule, we would continue consideration in both the IPPS proposed the Act, the Secretary is required to
this practice of analyzing the eligibility and final rules). adjust the standardized amounts so as to
criteria in this sequence and announce In summary, for the reasons cited ensure that aggregate payments under
in the annual Federal Register as part of above, we are proposing to revise the IPPS after implementation of the
the annual updates and changes to the § 412.87 to remove the second sentence provisions of sections 1886(d)(8)(B) and
IPPS our determination on whether a of (b)(1) and add a new paragraph (c) to (C) and 1886(d)(10) of the Act are equal
medical service or technology meets the codify our current practice of how CMS to the aggregate prospective payments
eligibility criteria in § 412.87(b). evaluates new medical service or that would have been made absent these
In the interest of more clearly defining technology add-on payment provisions. The proposed budget
the parameters under which CMS can applications and establish in paragraph neutrality adjustment for FY 2009 is
fully and completely evaluate new (c) a deadline of July 1 of each year as discussed in section II.A.4.b. of the
medical service or technology add-on the deadline by which IPPS new Addendum to this proposed rule.
payment applications, we are proposing medical service or technology add-on Section 1886(d)(3)(E) of the Act also
to amend the regulations at § 412.87 by payment applications must receive FDA provides for the collection of data every
adding a new paragraph (c) to codify our approval in order to be fully evaluated 3 years on the occupational mix of
current policy and specify that CMS in the applicable IPPS final rule each employees for short-term, acute care
will consider whether a new medical year. hospitals participating in the Medicare
service or technology meets the program, in order to construct an
III. Proposed Changes to the Hospital
eligibility criteria in § 412.87(b) and occupational mix adjustment to the
Wage Index
announce the results in the Federal wage index. A discussion of the
Register as part of the annual updates A. Background occupational mix adjustment that we
and changes to the IPPS. As a result, we Section 1886(d)(3)(E) of the Act are proposing to apply beginning
are proposing to remove the duplicative requires that, as part of the methodology October 1, 2008 (the FY 2009 wage
text in § 412.87(b)(1) that specifies that for determining prospective payments to index) appears under section III.D. of
CMS will determine whether a new hospitals, the Secretary must adjust the this preamble.
medical service or technology meets the standardized amounts ‘‘for area B. Requirements of Section 106 of the
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23618 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
MedPAC to submit to Congress, not later • Uses wage data from all employers wage index in order to cushion the
than June 30, 2007, a report on the and industry-specific occupational effect of large wage index changes on
Medicare wage index classification weights; individual hospitals.
system applied under the Medicare • Is adjusted for geographic • MedPAC suggests that using BLS
IPPS. Section 106(b) of MIEA–TRHCA differences in the ratio of benefits to data automatically addresses
required the report to include any wages; occupational mix differences, because
alternatives that MedPAC recommends • Is adjusted at the county level and the BLS data are specific to health care
to the method to compute the wage smoothes large differences between occupations, and national industry-wide
index under section 1886(d)(3)(E) of the counties; and occupational weights are applied to all
Act. • Is implemented so that large geographic areas.
In addition, section 106(b)(2) of the changes in wage index values are • The MedPAC report does not
MIEA–TRHCA instructed the Secretary phased in over a transition period; and provide any evidence of the impact of
of Health and Human Services, taking (3) The Secretary should use the its wage index on staffing practices or
into account MedPAC’s hospital compensation index for the the quality of care and patient safety.
recommendations on the Medicare wage home health and skilled nursing facility To assist CMS in meeting the
index classification system, to include prospective payment systems and requirements of section 106(b)(2) of Pub.
in this FY 2009 IPPS proposed rule one evaluate its use in the other Medicare L. 109–432, in February 2008, CMS
or more proposals to revise the wage fee-for-service prospective payment awarded a Task Order under its
index adjustment applied under section systems. Expedited Research and Demonstration
1886(d)(3)(E) of the Act for purposes of The full June 2007 Report to Congress Contract, to Acumen, LLC. The two
the IPPS. The proposal (or proposals) is available at the Web site: http:// general responsibilities of the Task
must consider each of the following: www.medpac.gov/documents/ Order are to (1) conduct a detailed
• Problems associated with the Jun07_EntireReport.pdf). impact analysis that compares the
definition of labor markets for the wage In the presentation and analysis of its effects of MedPAC’s wage and hospital
index adjustment. alternative wage index system, MedPAC compensation indexes with the CMS
• The modification or elimination of addressed almost all of the nine points wage index and (2) assist CMS in
geographic reclassifications and other for consideration under section developing a proposal (or proposals)
adjustments. 106(b)(2) of Pub. L. 109–432. Following that addresses the nine points for
• The use of Bureau of Labor of are the highlights of the alternative wage consideration under section 106(b)(2) of
Statistics data or other data or index system recommended by Pub. L. 109–432. Specifically, the tasks
methodologies to calculate relative MedPAC: under the Task Order include, but are
wages for each geographic area. • Although the MedPAC not limited to, an evaluation of whether
• Minimizing variations in wage recommended wage index generally differences between the two types of
index adjustments between and within retains the current labor market wage data (that is, CMS cost report and
MSAs and statewide rural areas. definitions, it supplements the occupational mix data and BLS data)
• The feasibility of applying all metropolitan areas with county-level produce significant differences in wage
components of CMS’ proposal to other adjustments and eliminates single wage index values among labor market areas,
settings. index values for rural areas. a consideration of alternative methods
• Methods to minimize the volatility • In the MedPAC recommended of incorporating benefit costs into the
of wage index adjustments while wage index, the county-level construction of the wage index, a review
maintaining the principle of budget adjustments, together with a smoothing of past and current research on
neutrality. process that constrains the magnitude of alternative labor market area definitions,
• The effect that the implementation differences between and within and a consideration of how aspects of
of the proposal would have on health contiguous wage areas, serve as a the MedPAC recommended wage index
care providers on each region of the replacement for geographical can be applied to the CMS wage data in
country. reclassifications. constructing a new methodology for the
• Methods for implementing the • The MedPAC recommended wage wage index. We will present any
proposal(s) including methods to phase index uses BLS data instead of the CMS analyses and proposals resulting from
in such implementations. hospital wage data collected on the this Task Order in the FY 2009 IPPS
• Issues relating to occupational mix Medicare cost report. MedPAC adjusts final rule or in a special Federal
such as staffing practices and any the BLS data for geographic differences Register notice issued after the final rule
evidence on quality of care and patient in the ratio of benefits to wages using is published.
safety including any recommendation Medicare cost report data.
• The BLS data are collected from a 2. CMS Proposals in Response to
for alternative calculations to the
sample of all types of employers, not Requirements Under Section 106(b) of
occupational mix.
In its June 2007 Report to Congress, just hospitals. The MedPAC the MIEA–TRHCA
‘‘Report to the Congress: Promoting recommended wage index could be As discussed in section III.A. of this
Greater Efficiency in Medicare’’ adapted to other providers such as preamble, the purpose of the hospital
(Chapter 6 with Appendix), MedPAC HHAs and SNFs by replacing hospital wage index is to adjust the IPPS
made three broad recommendations occupational weights with occupational standardized payment to reflect labor
regarding the wage index: weights appropriate for other types of market area differences in wage levels.
(1) Congress should repeal the providers. The geographic reclassification system
existing hospital wage index statute, • In the MedPAC recommended exists in order to assist ‘‘hospitals which
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including reclassifications and wage index, volatility over time is are disadvantaged by their current
exceptions, and give the Secretary addressed by the use of BLS data, which geographic classification because they
authority to establish a new wage index is based on a 3-year rolling sample compete with hospitals that are located
system; design. in the geographic area to which they
(2) The Secretary should establish a • MedPAC recommends a phased seek to be reclassified’’ (56 FR 25469).
hospital compensation index that— implementation for its recommended Geographic reclassification is
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23619
established under section 1886(d)(10) of area in which the hospital is located and wage criteria for geographic
the Act and is implemented through 42 at least 84 percent of the average hourly reclassification. We ran simulations
CFR Part 412, Subpart L. (We refer wage of hospitals in the area to which with more recent wage data to
readers to section III.I. of this preamble it seeks redesignation) were adopted in determine what would be the
for a detailed discussion of the the FY 1993 IPPS final rule (57 FR appropriate average hourly wage
geographic reclassification system and 39825). In that final rule, we explained criteria. We found that the average
other area wage index exceptions.) that the 108 percent threshold ‘‘is based hospital average hourly wage as a
In its June 2007 Report to Congress, on the national average hospital wage as percentage of its area’s wage has
MedPAC discussed its findings that a percentage of its area wage (96 increased from approximately 96
geographic reclassification, and percent) plus one standard deviation (12 percent in FY 1993 to closer to 98
numerous other area wage index percent).’’ We also explained that we percent over FYs 2006, 2007, and 2008
exceptions added to the system over the would use the 84-percent threshold to (97.8, 98.2, and 98 percent,
years, have created major complexities reflect the average hospital wage of the respectively). We also determined that
and ‘‘troubling anomalies’’ in the hospital as a percentage of its area wage the standard deviation has been reduced
hospital wage index. A review of the less one standard deviation. We stated from approximately 12 percent in FY
IPPS final rules reveals a long history of that ‘‘to qualify for a wage index 1993 to closer to 10 percent over the
legislative changes that have permitted reclassification, a hospital must have an same 3-year period (10.7, 10.4, and 10.4
certain hospitals, that otherwise would average hourly wage that is more than percent, respectively); that is, assuming
not be able to reclassify under section one national standard deviation above normal distributions, approximately 68
1886(d)(10) of the Act, to receive a its original labor market area and not percent of all hospitals would have an
higher wage index than calculated for less than one national standard average hourly wage that deviates less
their geographic area. MedPAC reports deviation below its new labor market than 10 percentage points above or
that more than one-third of hospitals area’’ (57 FR 39770). In response to below the mean. This assessment
now receive a higher wage index due to numerous public comments we indicates that the new baseline criteria
geographic reclassification or other received, we expressed our policy and for reclassification should be set to 88/
wage index exceptions. We are legal justifications for adopting the 108 percent. While the 108 criterion
concerned about the integrity of the specific thresholds. Among other things, appears not to require adjustment, the
current system, and agree with MedPAC we stated that geographic current 84 percent standard appears to
that the process has become reclassifications must be viewed not just be too low a threshold to serve the
burdensome. in terms of those hospitals that are purpose of establishing wage
As noted above, MedPAC reclassifying, but also in terms of the comparability with a proximate labor
recommended the elimination of nonreclassifying hospitals that, through market area.
geographic reclassification and other a budget neutrality adjustment, are To assess the impact that these
wage index exceptions. In addition, the required to bear a financial burden changes would have had on hospitals
President’s FY 2009 Budget included a associated with the higher wage indices that reclassified in FY 2008, we ran
proposal to apply the geographic received by those hospitals that models that set urban individual
reclassification budget neutrality reclassify. We also indicated that the reclassification standards to 88/108
requirement at the State level rather Secretary has ample legal authority percent and the county group
than by adjusting the standardized rate under section 1886(d)(10) of the Act to reclassification standard to 88 percent.
for hospitals nationwide. Given the set the wage comparison thresholds and We retained the 2-percent benefit for
language in section 1886(d)(10) of the to revise such thresholds upon further rural hospitals by setting an 86/106
Act establishing the MGCRB, we believe review. We refer readers to that final percent standard. We used 3-year
a statutory change would be required to rule for a full discussion of our average hourly wage figures from the
make these changes. However, we do justifications for the standards. 2005, 2006, and 2007 wage surveys and
have the authority to make some In the FY 2000 IPPS final rule (65 FR compared them to 3-year average hourly
regulatory changes to the 47089 through 47090), the wage wage figures for CBSAs over the same 3-
reclassification system as discussed comparison criteria for rural hospitals year period.
below. We note that these proposals do seeking individual hospital Of the 295 hospitals that applied for
not preclude future consideration of reclassifications were reduced to 82 and received individual reclassifications
MedPAC’s recommendations that could percent and 106 percent to compensate in FY 2008, 45 of them (15.3 percent)
be implemented through additional for the historic economic would not meet the proposed 88/86
changes to our regulations, once our underperformance of rural hospitals. percent threshold. Of the 66 hospitals
analysis of those recommendations is The 2-percent drop in both thresholds that applied for and received county
complete (after the publication of the FY was determined to allow a significant group reclassification in FY 2008, 6
2009 IPPS proposed rule). benefit to some hospitals that were close hospitals (9.1 percent) in 3 groups
to meeting the existing criteria but would not have qualified with the new
a. Proposed Revision of the standards. We also ran comparisons for
would not make the reclassification
Reclassification Average Hourly Wage hospitals that reclassified in FY 2006
standards overly liberal for rural
Comparison Criteria and FY 2007 to determine if they would
hospitals.
Regulations at 42 CFR 413.230(d)(1) CMS has not evaluated or recalibrated have been able to reclassify in FY 2008,
set forth the average hourly wage the average hourly wage criteria for using 3-year averages available in FY
comparison criteria that an individual geographic reclassification since they 2008. We found that, of all hospitals
hospital must meet in order for the were established in FY 1993. In that were reclassified in FY 2008 (that
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MGCRB to approve a geographic consideration of the MIEA–TRHCA is, applications approved for FYs 2006
reclassification application. Our current requirements and MedPAC’s finding through 2008), 14.7 percent of
criteria (requiring an urban hospital to that over one-third of hospitals are individual reclassifications and 8.5
demonstrate that its average hourly receiving a reclassified wage index or percent of county group reclassification
wage is at least 108 percent of the other wage index adjustment, we would not have qualified to reclassify in
average hourly wage of hospitals in the decided to reevaluate the average hourly FY 2008.
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23620 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Section 106 of MIEA–TRHCA requires equal to the proposed 88 percent not be affected by the proposed criteria
us to propose revisions to the hospital standard for urban reclassifications, and change until they reapply for a
wage index system after considering the to revise the regulations at 42 CFR geographic reclassification. Therefore,
recommendations of MedPAC. To 412.232 and 412.234 to reflect the we are proposing the effective date for
address this requirement, we are change. The urban and rural county these changes would be September 1,
proposing that the 84/108 criteria for group average hourly wage standard has 2008, the deadline for hospitals to
urban hospital reclassifications and the always been equivalent for both urban submit applications for reclassification
82/106 criteria for rural hospital and rural county groups and has always for the FY 2010 wage index.
reclassifications be recalibrated using been 1 percent higher than the 84
b. Within-State Budget Neutrality
the methodology published in the FY percent urban area individual
Adjustment for the Rural and Imputed
1993 final rule and more recent wage reclassification standard. We would
Floors
data (that is, data used in computing the continue the policy of having an
FYs 2006, 2007, 2008 wage indices). We equivalent wage comparison criterion Section 4410 of the Balanced Budget
believe that hospitals that are seeking to for both urban and rural county groups, Act of 1997 (BBA) established the rural
reclassify to another area should be as these groups have always used the floor by requiring that the wage index
required to demonstrate more similarity same wage comparison criteria. We also for a hospital in an urban area of a State
to the area than the current criteria would use the individual urban hospital cannot be less than the area wage index
permit, and our recent analysis reclassification standard of 88 percent determined for that State’s rural area.
demonstrates that those criteria are no because this threshold would ensure Section 4410(b) of the BBA imposed the
longer appropriate. Therefore, we are that the hospitals in the county group budget neutrality requirement and
proposing to change the criterion for the are at least as comparable to the stated that the Secretary shall ‘‘adjust
comparison of a hospital’s average proximate area as are individual the area wage index referred to in
hourly wage to that of the area to which hospitals within their own areas. Also, subsection (a) for hospitals not
the hospital seeks reclassification to 88 we do not believe it would be described in such subsection.’’
percent for urban hospitals and 86 appropriate to have a group Therefore, in order to compensate for
percent for rural hospitals for new reclassification standard lower than the the increased wage indices of urban
reclassifications beginning with the FY individual reclassification standards, hospitals receiving the rural floor, a
2010 wage index and, accordingly, thus potentially creating a situation nationwide budget neutrality
revise our regulations at 42 CFR 412.230 where all of the hospitals in a county adjustment is applied to the wage index
to reflect these changes. The criterion could reclassify, even though no single to account for the additional payment to
for the comparison of a hospital’s hospital within such county would be these hospitals. As a result, urban
average hourly wage to that of its able to meet any average hourly wage- hospitals that qualify for their State’s
geographic area would be unchanged related comparisons for an individual rural floor wage index receive enhanced
(108 percent for urban hospitals and 106 reclassification. payments at the expense of all rural
percent for rural hospitals). We also are We considered raising the group hospitals nationwide and all other
proposing that, when there are reclassification criterion to 89 percent in urban hospitals that do not receive their
significant changes in labor market area order to preserve the historical policy of State’s rural floor. In the FY 2009
definitions, such as CMS’ adoption of the standard being set at 1 percent proposed wage index, 266 hospitals in
new OMB CBSA definitions based upon higher than the individual 27 States benefit from the rural floor.
the decennial census (69 FR 49027), we reclassification standard. However, we The first chart below lists the percentage
would again reevaluate and, if determined that making the group of total payments each State either
warranted, recalibrate these criteria. standard equal to the individual received or contributed to fund the
This would allow CMS to consider the standard would adequately address our current rural floor and imputed floor
effects of periodic changes in labor stated concerns. provisions with national budget
market boundaries and provide a regular We note that the proposed changes in neutrality adjustments (as indicated in
timeline for updating and validating the the reclassification criteria apply only to the discussion of the imputed floor
reclassification criteria. Finally, we are new reclassifications beginning with the below in this section III.B.2.b.). The
proposing to adjust the 85 percent FY 2010 wage index. Any hospital or second chart below provides a graphical
criterion for both urban and rural county group that is in the midst of a depiction of the proposed FY 2009
county group reclassifications to be 3-year reclassification in FY 2010 will impacts.
FY 2009 IPPS ESTIMATED PAYMENTS WITH PROPOSED WITHIN-STATE RURAL FLOOR AND IMPUTED FLOOR BUDGET
NEUTRALITY
Proposed policy
Current policy application of rural
application of na- floor and imputed
State tional rural floor floor budget
and imputed floor neutrality within
budget neutrality each state
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23621
FY 2009 IPPS ESTIMATED PAYMENTS WITH PROPOSED WITHIN-STATE RURAL FLOOR AND IMPUTED FLOOR BUDGET
NEUTRALITY—Continued
Proposed policy
Current policy application of rural
application of na- floor and imputed
State tional rural floor floor budget
and imputed floor neutrality within
budget neutrality each state
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23622 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
The above charts demonstrate how, at FR 47324) in which rural CAHs were status. In simulating the effect of the
a State-by-State level, the rural floor is converting to IPPS status, apparently to hospitals setting the State’s rural floor,
creating a benefit for a minority of States raise the State’s rural wage index to a we estimated that payment to hospitals
that is then funded by a majority of level whereby all urban hospitals in the in the State would increase in excess of
States, including States that are State would receive the rural floor. $220 million in a single year. The
overwhelmingly rural in character. The Medicare payments to CAHs are based MedPAC, in its June 2007 Report to the
intent behind the rural floor seems to on 101 percent of reasonable costs while Congress stated, ‘‘The fact that the
have been to address anomalous the IPPS pays hospitals a fixed rate per movement of one or two CAHs in or out
occurrences where certain urban areas discharge. In addition, as a CAH, a of the [I]PPS system can increase (or
in a State have unusually depressed hospital is guaranteed to recover its decrease) Medicare payments by $220
wages when compared to the State’s costs, while an IPPS hospital is million suggests there is a flaw in the
rural areas. However, because these provided with incentives to increase design of the wage index system.’’ (We
comparisons occur at the State level, we efficiency to cover its costs. Thus, we refer readers to page 131 of the report.)
believe it also would be sound policy to stated that the identified CAHs were For the above reasons, we are
make the budget neutrality adjustment converting back to IPPS, even though proposing to apply a State level rural
specific to the State, redistributing the conversion would not directly floor budget neutrality adjustment to the
payments among hospitals within the benefit them. Because these hospitals’ wage index beginning in FY 2009. States
jlentini on PROD1PC65 with PROPOSALS2
State, rather than adjusting payments to wage levels are higher than most, if not that have no hospitals receiving a rural
hospitals in other States. all, of the urban hospitals in the State, floor wage index would no longer have
In addition, a statewide budget the wage indices for most, if not all, of a negative budget neutrality adjustment
neutrality adjustment would address the the State’s urban hospitals would applied to their wage indices.
situation we discussed in the FY 2008 increase as a result of the rural floor Conversely, hospitals in States with
EP30AP08.018</GPH>
IPPS final rule with comment period (72 provision if the CAHs convert to IPPS hospitals receiving a rural floor would
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23623
have their wage indices downwardly prior national adjustment policy. The benefit from the reclassification are
adjusted to achieve budget neutrality full impact analysis is reflected in the located. We expect that a legislative
within the State. All hospitals within two charts presented earlier in this provision on applying geographic
each State would, in effect, be section III.B.2.b. of the preamble of this reclassification budget neutrality at the
responsible for funding the rural floor proposed rule. Tables 4D–1 and 4D–2 in State level would be applied to all
adjustment applicable within that the Addendum to this proposed rule reclassifications and wage index
specific State. reflect the proposed FY 2009 State level exceptions that are implemented
In the FY 2005 IPPS final rule and the budget neutrality adjustments for the through 42 CFR Part 412, Subpart L, and
FY 2008 IPPS final rule with comment rural and imputed floors. We are certain provisions of the Social Security
period (69 FR 49109 and 72 FR 47321, specifically requesting public comments Act that permit hospitals to receive a
respectively), we temporarily adopted from national and State hospital higher wage index than is calculated for
an ‘‘imputed’’ floor measure to address associations regarding these proposals, their geographic area. (As discussed
a concern by some individuals that particularly the national associations, as above, as a proposed regulatory matter,
hospitals in all-urban States were they represent member hospitals that there also would be a separate within-
disadvantaged by the absence of rural are both positively and negatively State budget neutrality adjustment for
hospitals. Because no rural wage index affected by our proposed policies, and the imputed and rural floors.) We expect
could be calculated, no rural floor could are, therefore, in the best position to that reclassification budget neutrality at
be applied within such States. We comment on the policy merits of these the State level would operate through
originally limited application of the proposals. We will view the absence of adjustments to the IPPS payments to
policy to FYs 2005 through 2007 and any comments from the national hospitals in the State in which the
then extended it one additional year, hospital associations as a sign that they reclassifying hospital is geographically
through FY 2008. We are proposing to do not object to our proposed policies. located.
extend the imputed floor for 3 We are seeking public comments
additional years, through FY 2011, and c. Within-State Budget Neutrality regarding MedPAC’s recommendations
to revise the introductory text of Adjustment for Geographic for reforming the wage index, our plan
§ 412.64(h)(4) of our regulations to Reclassification for our contractor’s review of the wage
reflect this extension. For FY 2009, 26 Currently, section 1886(d)(8)(D) of the index, and the regulatory proposals for
hospitals in New Jersey (33.8 percent) Act requires us to adjust the modifying the current hospital wage
would receive the imputed floor. Rhode standardized amount to ensure that the index system. We also welcome
Island, the only other all-urban State, effects of geographic reclassification do additional suggestions for reforming the
has no hospitals that would receive the not increase aggregate IPPS payments. hospital wage index.
imputed floor. In past years, we applied This means that, in the case of a
reclassification, budget neutrality is C. Core-Based Statistical Areas for the
a national budget neutrality adjustment
achieved by reducing the standardized Hospital Wage Index
to the standardized amount to ensure
that payments remained constant to amount for all hospitals nationwide. The wage index is calculated and
payments that would have occurred in The FY 2009 President’s Budget assigned to hospitals on the basis of the
the absence of the imputed floor policy. includes a legislative proposal to apply labor market area in which the hospital
As a result, payments to all other geographic reclassification budget is located. In accordance with the broad
hospitals in the Nation were adjusted neutrality at the State level (available at discretion under section 1886(d)(3)(E) of
downward to subsidize the higher the Web site: www.hhs.gov/budget/ the Act, beginning with FY 2005, we
payments to New Jersey hospitals 09budget/2009BudgetInBrief.pdf under define hospital labor market areas based
receiving the imputed floor. As the FY 2009 Medicare Proposals, page 54). on the Core-Based Statistical Areas
intent of the imputed floor is to create If this proposal is enacted by the (CBSAs) established by OMB and
a protection to all-urban States similar Congress, budget neutrality would be announced in December 2003 (69 FR
to the protection offered to urban-rural achieved by adjusting the wage index 49027). For a discussion of OMB’s
mixed States by the rural floor, and the for all hospitals within the State rather revised definitions of CBSAs and our
effect of the measure is also State- than reducing the standardized amount implementation of the CBSA
specific like the rural floor, we believe for all hospitals nationwide. definitions, we refer readers to the
that the budget neutrality adjustments As noted also in MedPAC’s June 2007 preamble of the FY 2005 IPPS final rule
for the imputed floor and the rural floor Report to Congress, over the years, there (69 FR 49026 through 49032).
should be applied in the same manner. have been many changes to the As with the FY 2008 final rule, for FY
Therefore, beginning with FY 2009, we Medicare law that are intended to 2009 we are proposing to provide that
are also proposing to apply the imputed broaden the ability for a hospital to hospitals receive 100 percent of their
floor budget neutrality adjustment to the receive a wage index that is higher than wage index based upon the CBSA
wage index and at the State level. the value that is calculated for its configurations. Specifically, for each
Based on our impact analysis of these geographic area and not be subject to the hospital, we will determine a wage
proposals for FY 2009, of the 49 States proximity or wage level criteria for index for FY 2009 employing wage
(Maryland is excluded because it is geographic reclassification established index data from FY 2005 hospital cost
under a State waiver), the District of under section 1886(d)(10) of the Act. reports and using the CBSA labor
Columbia, and Puerto Rico, 39 would These more targeted geographic market definitions. We consider CBSAs
see either no change or an increase in reclassification provisions are creating that are MSAs to be urban, and CBSAs
total Medicare payments as a result of inequities in the wage index by that are Micropolitan Statistical Areas as
applying a budget neutrality adjustment sometimes allowing hospitals to be well as areas outside of CBSAs to be
jlentini on PROD1PC65 with PROPOSALS2
to the wage index for the rural and reclassified to areas where other rural. In addition, it has been our
imputed floors at the State level rather hospitals that are closer in proximity are longstanding policy that where an MSA
than the national level. The total ineligible to reclassify. Applying budget has been divided into Metropolitan
payments of the remaining 12 States neutrality at the State level would focus Divisions, we consider the Metropolitan
would decrease 0.1 percent to 3.4 the costs of geographic reclassification Division to comprise the labor market
percent compared to continuing our closer to the areas where hospitals that areas for purposes of calculating the
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23624 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
wage index (69 FR 49029). We are D. Proposed Occupational Mix category because most of the
proposing to codify this longstanding Adjustment to the Proposed FY 2009 occupational mix adjustment is
policy into our regulations at Wage Index correlated with the nursing general
§ 412.64(b)(1)(ii)(A). As stated earlier, section 1886(d)(3)(E) service category.
On November 20, 2007, OMB of the Act provides for the collection of In addition, in response to the public
announced the revision of titles for eight data every 3 years on the occupational comments on the October 14, 2005
urban areas (OMB Bulletin No. 08–01). mix of employees for each short-term, notice, we modified the 2006 survey. On
The revised titles are as follows: acute care hospital participating in the February 10, 2006, we published a
• Hammonton, New Jersey qualifies Medicare program, in order to construct Federal Register notice (71 FR 7047)
as a new principal city of the Atlantic an occupational mix adjustment to the that solicited comments and announced
City, New Jersey CBSA. The new title is wage index, for application beginning our intent to seek OMB approval on the
Atlantic City-Hammonton, New Jersey October 1, 2004 (the FY 2005 wage revised occupational mix survey (Form
CBSA; index). The purpose of the occupational CMS–10079 (2006)). OMB approved the
• New Brunswick, New Jersey, mix adjustment is to control for the survey on April 25, 2006.
located in the Edison, New Jersey effect of hospitals’ employment choices The 2006 survey provides for the
Metropolitan Division, qualifies as a on the wage index. For example, collection of hospital-specific wages and
new principal city of the New York- hospitals may choose to employ hours data, a 6-month prospective
Northern New Jersey-Long Island, New different combinations of registered reporting period (that is, January 1,
York, New Jersey, Pennsylvania CBSA. nurses, licensed practical nurses, 2006, through June 30, 2006), the
The new title for the Metropolitan nursing aides, and medical assistants for transfer of each general service category
Division is Edison-New Brunswick, the purpose of providing nursing care to that comprised less than 4 percent of
New Jersey CBSA; their patients. The varying labor costs total hospital employees in the 2003
associated with these choices reflect survey to the ‘‘all other occupations’’
• Summerville, South Carolina
hospital management decisions rather category (the revised survey focuses
qualifies as a new principal city of the
than geographic differences in the costs only on the mix of nursing occupations),
Charleston-North Charleston, South
of labor. additional clarification of the
Carolina CBSA. The new title is
Charleston-North Charleston- 1. Development of Data for the Proposed definitions for the occupational
Summerville, South Carolina; FY 2009 Occupational Mix Adjustment categories, an expansion of the
registered nurse category to include
• Winter Haven, Florida qualifies as On October 14, 2005, we published a functional subcategories, and the
a new principal city of the Lakeland, notice in the Federal Register (70 FR exclusion of average hourly rate data
Florida CBSA. The new title is 60092) proposing to use a new survey, associated with advance practice nurses.
Lakeland-Winter Haven, Florida; the 2006 Medicare Wage Index
• Bradenton, Florida replaces Occupational Mix Survey (the 2006 The 2006 survey included only two
Sarasota, Florida as the most populous survey) to apply an occupational mix general occupational categories: nursing
principal city of the Sarasota-Bradenton- adjustment to the FY 2008 wage index. and ‘‘all other occupations.’’ The
Venice, Florida CBSA. The new title is In the proposed 2006 survey, we nursing category has four subcategories:
Bradenton-Sarasota-Venice, Florida. The included several modifications based on Registered nurses, licensed practical
new CBSA code is 14600; the comments and recommendations we nurses, aides, orderlies, attendants, and
received on the 2003 survey, including medical assistants. The registered nurse
• Frederick, Maryland replaces subcategory includes two functional
Gaithersburg, Maryland as the second (1) allowing hospitals to report their
own average hourly wage rather than subcategories: management personnel
most populous principal city in the and staff nurses or clinicians. As
Bethesda-Gaithersburg-Frederick, using BLS data; (2) extending the
prospective survey period; and (3) indicated above, the 2006 survey
Maryland CBSA. The new title is provided for a 6-month data collection
Bethesda-Frederick-Gaithersburg, reducing the number of occupational
categories but refining the subcategories period, from January 1, 2006 through
Maryland; June 30, 2006. However, we allowed
for registered nurses.
• North Myrtle Beach, South We made the changes to the flexibility for the reporting period
Carolina replaces Conway, South occupational categories in response to beginning and ending dates to
Carolina as the second most populous MedPAC comments to the FY 2005 IPPS accommodate some hospitals’ biweekly
principal city of the Myrtle Beach- final rule (69 FR 49036). Specifically, payroll and reporting systems. That is,
Conway-North Myrtle Beach, South MedPAC recommended that CMS assess the 6-month reporting period had to
Carolina CBSA. The new title is Myrtle whether including subcategories of begin on or after December 25, 2005,
Beach-North Myrtle Beach-Conway, registered nurses would result in a more and end before July 9, 2006.
South Carolina; accurate occupational mix adjustment. We are proposing to use the entire 6-
• Pasco, Washington replaces MedPAC believed that including all month 2006 survey data to calculate the
Richland, Washington as the second registered nurses in a single category occupational mix adjustment for the FY
most populous principal city of the may obscure significant wage 2009 wage index. The original timelines
Kennewick-Richland-Pasco, Washington differences among the subcategories of for the collection, review, and
CBSA. The new title is Kennewick- registered nurses, for example, the correction of the 2006 occupational mix
Pasco-Richland, Washington. wages of surgical registered nurses and data were discussed in detail in the FY
The OMB bulletin is available on the floor registered nurses may differ. Also, 2007 IPPS final rule (71 FR 48008). The
jlentini on PROD1PC65 with PROPOSALS2
OMB Web site at https:// to offset additional reporting burden for revision and correction process for all of
www.whitehouse.gov/OMB— go to hospitals, MedPAC recommended that the data, including the 2006
‘‘Bulletins’’ or ‘‘Statistical Programs and CMS should combine the general occupational mix survey data to be used
Standards.’’ CMS will apply these service categories that account for only for computing the FY 2009 wage index,
changes to the IPPS beginning October a small percentage of a hospital’s total is discussed in detail in section III.K. of
1, 2008. hours with the ‘‘all other occupations’’ the preamble of this proposed rule.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23625
2. Calculation of the Proposed hospitals in the occupational mix mix adjusted salaries and wage-related
Occupational Mix Adjustment for FY survey database. costs for the total nursing category (from
2009 Step 6—For each hospital, compute Step 7) and the portion of the hospital’s
the occupational mix adjustment factor salaries and wage-related costs for all
For FY 2009 (as we did for FY 2008), for the total nursing category by other employees (from Step 7).
we are proposing to calculate the dividing the national average hourly To compute a hospital’s occupational
occupational mix adjustment factor rate for the total nursing category (from mix adjusted average hourly wage,
using the following steps: Step 5) by the hospital’s adjusted divide the hospital’s total occupational
Step 1—For each hospital, determine average hourly rate for the total nursing mix adjusted salaries and wage-related
the percentage of the total nursing category (from Step 4). costs by the hospital’s total hours (from
category attributable to a nursing If the hospital’s adjusted average Step 4 of the unadjusted wage index
subcategory by dividing the nursing hourly rate is less than the national calculation in section III.G. of this
subcategory hours by the total nursing average hourly rate (indicating the preamble).
category’s hours (registered nurse hospital employs a less costly mix of Step 9—To compute the occupational
management personnel and registered nursing employees), the occupational mix adjusted average hourly wage for an
nurse staff nurses or clinicians are mix adjustment factor would be greater urban or rural area, sum the total
treated as separate nursing than 1.0000. If the hospital’s adjusted occupational mix adjusted salaries and
subcategories). Repeat this computation average hourly rate is greater than the wage-related costs for all hospitals in
for each of the five nursing national average hourly rate, the the area, then sum the total hours for all
subcategories: registered nurse occupational mix adjustment factor hospitals in the area. Next, divide the
management personnel; registered nurse would be less than 1.0000. area’s occupational mix adjusted
staff nurses or clinicians; licensed Step 7—For each hospital, calculate
salaries and wage-related costs by the
practical nurses; nursing aides, the occupational mix adjusted salaries
area’s hours.
orderlies, and attendants; and medical and wage-related costs for the total
nursing category by multiplying the Step 10—To compute the national
assistants. occupational mix adjusted average
Step 2—Determine a national average hospital’s total salaries and wage-related
costs (from Step 5 of the unadjusted hourly wage, sum the total occupational
hourly rate for each nursing subcategory mix adjusted salaries and wage-related
by dividing a subcategory’s total salaries wage index calculation in section III.G.
of this preamble) by the percentage of costs for all hospitals in the Nation, then
for all hospitals in the occupational mix sum the total hours for all hospitals in
survey database by the subcategory’s the hospital’s total workers attributable
to the total nursing category (using the the Nation. Next, divide the national
total hours for all hospitals in the occupational mix adjusted salaries and
occupational mix survey database. occupational mix survey data, this
percentage is determined by dividing wage-related costs by the national
Step 3—For each hospital, determine hours. The proposed FY 2009
the hospital’s total nursing category
an adjusted average hourly rate for each occupational mix adjusted national
salaries by the hospital’s total salaries
nursing subcategory by multiplying the average hourly wage is $32.2252.
for ‘‘nursing and all other’’) and by the
percentage of the total nursing category Step 11—To compute the
total nursing category’s occupational
(from Step 1) by the national average occupational mix adjusted wage index,
mix adjustment factor (from Step 6
hourly rate for that nursing subcategory above). divide each area’s occupational mix
(from Step 2). Repeat this calculation for The remaining portion of the adjusted average hourly wage (Step 9)
each of the five nursing subcategories. hospital’s total salaries and wage-related by the national occupational mix
Step 4—For each hospital, determine costs that is attributable to all other adjusted average hourly wage (Step 10).
the adjusted average hourly rate for the employees of the hospital is not Step 12—To compute the Puerto Rico
total nursing category by summing the adjusted by the occupational mix. A specific occupational mix adjusted wage
adjusted average hourly rate (from Step hospital’s all other portion is index, follow Steps 1 through 11 above.
3) for each of the nursing subcategories. determined by subtracting the hospital’s The proposed FY 2009 occupational
Step 5—Determine the national nursing category percentage from 100 mix adjusted Puerto Rico specific
average hourly rate for the total nursing percent. average hourly wage is $13.7851.
category by dividing total nursing Step 8—For each hospital, calculate The table below is an illustrative
category salaries for all hospitals in the the total occupational mix adjusted example of the proposed occupational
occupational mix survey database by salaries and wage-related costs for a mix adjustment.
total nursing category hours for all hospital by summing the occupational BILLING CODE 4120–01–P
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EP30ap08.019</GPH>
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23628 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Because the occupational mix the labor market area level. In following hospitals that do not submit
adjustment is required by statute, all these steps, for example, for CBSAs that occupational mix survey data. We stated
hospitals that are subject to payments contain providers that did not submit in the FY 2008 final rule with comment
under the IPPS, or any hospital that occupational mix survey data, the period that we may consider proposing
would be subject to the IPPS if not occupational mix adjustment factor a policy to penalize hospitals that do
granted a waiver, must complete the ranged from a low of 0.8968 (CBSA not submit occupational mix survey
occupational mix survey, unless the 39820, Redding, CA), to a high of 1.0775 data for FY 2010, the first year of the
hospital has no associated cost report (CBSA 43300, Sherman-Denison, TX). application of the new 2007–2008
wage data that are included in the Also, in computing a hospital’s occupational mix survey, and that we
proposed FY 2009 wage index. occupational mix adjusted salaries and expected that any such penalty would
For the FY 2008 wage index, if a wage-related costs for nursing be proposed in the FY 2009 IPPS
hospital did not respond to the employees (Step 7 of the calculation), in proposed rule so hospitals would be
occupational mix survey, or if we the absence of occupational mix survey aware of the policy before the deadline
determined that a hospital’s submitted data, we multiplied the hospital’s total for submitting the data to the fiscal
data were too erroneous to include in salaries and wage-related costs by the intermediaries/MAC. At this time,
the wage index, we assigned the percentage of the area’s total workers however, we are not proposing a penalty
hospital the average occupational mix attributable to the area’s total nursing for FY 2010. Rather, we are reserving
adjustment for the labor market area (72 category. For FY 2009, there was one the right to propose a penalty in the FY
FR 47314). We believed this method had CBSA for which we did not have 2010 IPPS proposed rule, once we
the least impact on the wage index for occupational mix data for any of its collect and analyze the FY 2007–2008
other hospitals in the area. For areas providers (CBSA 12020, Athens-Clark occupational mix survey data. Hospitals
where no hospital submitted data for County, GA). In the absence of any data are still on notice that any failure to
purposes of calculating the occupational in this labor market area, we applied an submit occupational mix data for the FY
mix adjustment, we applied the national occupational mix adjustment factor of 2007–2008 survey year may result in a
occupational mix factor of 1.0000 in 1.0 to all provider(s). penalty in FY 2010, thus achieving our
calculating the area’s FY 2008 In the FY 2007 IPPS final rule, we policy goal of ensuring that hospitals are
occupational mix adjusted wage index. also indicated that we would give aware of the consequences of failure to
We indicated in the FY 2008 IPPS final serious consideration to applying a submit data in response to the most
rule that we reserve the right to apply hospital-specific penalty if a hospital recent survey.
a different approach in future years, does not comply with regulations
including potentially penalizing requiring submission of occupational 3. 2007–2008 Occupational Mix Survey
nonresponsive hospitals (72 FR 47314). mix survey data in future years. We for the FY 2010 Wage Index
For the FY 2009 wage index, we are stated that we believe that section As stated earlier, section 304(c) of
proposing to handle the data for 1886(d)(5)(I)(i) of the Act provides us Pub. L. 106–554 amended section
hospitals that did not respond to the with the authority to penalize hospitals 1886(d)(3)(E) of the Act to require CMS
occupational mix survey (neither the 1st that do not submit occupational mix to collect data every 3 years on the
quarter nor 2nd quarter data) in the survey data. That section authorizes us occupational mix of employees for each
same manner as discussed above for the to provide for exceptions and short-term, acute care hospital
FY 2008 wage index. In addition, if a adjustments to the payment amounts participating in the Medicare program.
hospital submits survey data for either under IPPS as the Secretary deems We used occupational mix data
the 1st quarter or 2nd quarter, but not appropriate. We also indicated that we collected on the 2006 survey to compute
for both quarters, we are proposing to would address this issue in the FY 2008 the proposed occupational mix
use the data the hospital submitted for IPPS proposed rule. adjustment for FY 2009. In the FY 2008
one quarter to calculate the hospital’s In the FY 2008 IPPS proposed rule, IPPS final rule with comment period (72
proposed FY 2009 occupational mix we solicited comments and suggestions FR 47315), we discussed how we
adjustment factor. Lastly, if a hospital for a hospital-specific penalty for modified the occupational mix survey.
submits a survey(s), but that survey data hospitals that do not submit The revised 2007–2008 occupational
can not be used because we determine occupational mix survey data. In mix survey provides for the collection of
it to be aberrant, we will also assign the response to the FY 2008 IPPS proposed hospital-specific wages and hours data
hospital the average occupational mix rule, some commenters suggested a 1- for the 1-year period of July 1, 2007,
adjustment for its labor market area. For percent to 2-percent reduction in the through June 30, 2008, additional
example, if a hospital’s individual nurse hospital’s wage index value or a set clarifications to the survey instructions,
category average hourly wages are out of percentage of the standardized amount. the elimination of the registered nurse
range (that is, unusually high or low), We noted that any penalty that we subcategories, some refinements to the
and the hospital does not provide would determine for nonresponsive definitions of the occupational
sufficient documentation to explain the hospitals would apply to a future wage categories, and the inclusion of
aberrancy, or the hospital does not index, not the FY 2008 wage index. additional cost centers that typically
submit any registered nurse staff salaries In the FY 2008 final rule with provide nursing services. The revised
or hours data, we will assign the comment period, we assigned 2007–2008 occupational mix survey
hospital the average occupational mix nonresponsive hospitals the average will be applied beginning with the FY
adjustment for the labor market area in occupational mix adjustment for the 2010 wage index.
which it is located. labor market area. For areas where no On February 2, 2007, we published in
In calculating the average hospital submitted survey data, we the Federal Register a notice soliciting
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occupational mix adjustment factor for applied the national occupational mix comments on the proposed revisions to
a labor market area, we replicated Steps adjustment factor of 1.0000 in the occupational mix survey (72 FR
1 through 6 of the calculation for the calculating the area’s FY 2008 5055). The comment period for the
occupational mix adjustment. However, occupational mix adjusted wage index. notice ended on April 3, 2007. After
instead of performing these steps at the We appreciate the suggestions we considering the comments we received,
hospital level, we aggregated the data at received regarding future penalties for we made a few minor editorial changes
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23629
and published the final 2007–2008 20 and in the FY 2006 final rule (70 FR include in the proposed wage index,
occupational mix survey on September 47369). although if data elements for some of
14, 2007 (72 FR 52568). OMB approved these providers are corrected, we intend
2. Excluded Categories of Costs
the survey without change on February to include some of these providers in
1, 2008 (OMB Control Number 0938 Consistent with the wage index the FY 2009 final wage index. We
0907). The 2007–2008 Medicare methodology for FY 2008, the proposed instructed fiscal intermediaries/MACs
occupational mix survey (Form CMS– wage index for FY 2009 also excludes to complete their data verification of
10079 (2008)) is available on the CMS the direct and overhead salaries and questionable data elements and to
Web site at: http://www.cms.hhs.gov/ hours for services not subject to IPPS transmit any changes to the wage data
AcuteInpatientPPS/WIFN/ payment, such as SNF services, home no later than April 14, 2008. We believe
list.asp#TopOfPage, and through the health services, costs related to GME all unresolved data elements will be
fiscal intermediaries/MAC. Hospitals (teaching physicians and residents) and resolved by the date the final rule is
must submit their completed surveys to certified registered nurse anesthetists issued. The revised data will be
their fiscal intermediaries/MAC by (CRNAs), and other subprovider reflected in the FY 2009 IPPS final rule.
September 1, 2008. The preliminary, components that are not paid under the In constructing the proposed FY 2009
unaudited 2007–2008 occupational mix IPPS. The proposed FY 2009 wage index wage index, we included the wage data
survey data will be released in early also excludes the salaries, hours, and for facilities that were IPPS hospitals in
October 2008, along with the FY 2006 wage-related costs of hospital-based FY 2005; inclusive of those facilities
Worksheet S–3 wage data, for the FY rural health clinics (RHCs), and that have since terminated their
2010 wage index review and correction Federally qualified health centers participation in the program as
process. (FQHCs) because Medicare pays for hospitals, as long as those data did not
these costs outside of the IPPS (68 FR fail any of our edits for reasonableness.
E. Worksheet S–3 Wage Data for the 45395). In addition, salaries, hours, and We believe that including the wage data
Proposed FY 2009 Wage Index wage-related costs of CAHs are excluded for these hospitals is, in general,
The proposed FY 2009 wage index from the wage index, for the reasons appropriate to reflect the economic
values (to be effective for hospital explained in the FY 2004 IPPS final rule conditions in the various labor market
discharges occurring on or after October (68 FR 45397). areas during the relevant past period
1, 2008, and before October 1, 2009) in and to ensure that the current wage
3. Use of Wage Index Data by Providers
section II.B. of the Addendum to this index represents the labor market area’s
Other Than Acute Care Hospitals Under
proposed rule are based on the data current wages as compared to the
the IPPS
collected from the Medicare cost reports national average of wages. However, we
Data collected for the IPPS wage excluded the wage data for CAHs as
submitted by hospitals for cost reporting
index are also currently used to discussed in the FY 2004 IPPS final rule
periods beginning in FY 2005 (the FY
calculate wage indices applicable to (68 FR 45397). For this proposed rule,
2008 wage index was based on FY 2004
other providers, such as SNFs, home we removed 20 hospitals that converted
wage data).
health agencies, and hospices. In to CAH status between February 16,
1. Included Categories of Costs addition, they are used for prospective 2007, the cut-off date for CAH exclusion
payments to IRFs, IPFs, and LTCHs, and from the FY 2008 wage index, and
The proposed FY 2009 wage index
for hospital outpatient services. We note February 18, 2008, the cut-off date for
includes the following categories of data
that, in the IPPS rules, we do not CAH exclusion from the FY 2009 wage
associated with costs paid under the
address comments pertaining to the index. After removing hospitals with
IPPS (as well as outpatient costs):
wage indices for non-IPPS providers. aberrant data and hospitals that
• Salaries and hours from short-term,
Such comments should be made in converted to CAH status, the proposed
acute care hospitals (including paid
response to separate proposed rules for FY 2009 wage index is calculated based
lunch hours and hours associated with
those providers. on 3,533 hospitals.
military leave and jury duty).
• Home office costs and hours. F. Verification of Worksheet S–3 Wage 1. Wage Data for Multicampus Hospitals
• Certain contract labor costs and Data In the FY 2008 final rule with
hours (which includes direct patient The wage data for the proposed FY comment period (72 FR 47317), we
care, certain top management, 2009 wage index were obtained from discussed our policy for allocating a
pharmacy, laboratory, and nonteaching Worksheet S–3, Parts II and III of the FY multicampus hospital’s wages and
physician Part A services, and certain 2005 Medicare cost reports. Instructions hours data, by full-time equivalent
contract indirect patient care services for completing Worksheet S–3, Parts II (FTE) staff, among the different labor
(as discussed in the FY 2008 final rule and III are in the Provider market areas where its campuses are
with comment period (72 FR 47315). Reimbursement Manual (PRM), Part II, located. During the FY 2009 wage index
• Wage-related costs, including sections 3605.2 and 3605.3. The data desk review process, we requested fiscal
pensions and other deferred file used to construct the proposed wage intermediaries/MACs to contact
compensation costs. We note that, on index includes FY 2005 data submitted multicampus hospitals that had
March 28, 2008, CMS published a to us as of February 29, 2008. As in past campuses in different labor market areas
technical clarification to the cost years, we performed an intensive review to collect the data for the allocation. The
reporting instructions for pension and of the wage data, mostly through the use proposed FY 2009 wage index in this
deferred compensation costs (sections of edits designed to identify aberrant proposed rule includes separate wage
2140 through 2142.7 of the Provider data. data for campuses of three multicampus
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Reimbursement Manual, Part I). These We asked our fiscal intermediaries/ hospitals.
instructions are used for developing MAC to revise or verify data elements As with the FY 2008 wage index, we
pension and deferred compensation that resulted in specific edit failures. allowed hospitals the option of
costs for purposes of the wage index, as For the proposed FY 2009 wage index, allocating their wages and hours for the
discussed in the instructions for we identified and excluded 37 providers FY 2009 wage index based on either
Worksheet S–3, Part II, Lines 13 through with data that was too aberrant to FTE staff or discharge data. Again, we
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23630 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
are providing this option until a revised provide a viable alternative to local Worksheet S–3, Part II. Therefore, the
cost report is available that will allow a hospital emergency rooms for all first step in the wage index calculation
multicampus hospital to report the citizens of New Orleans, especially for FY 2009 is to compute a ‘‘revised’’
number of FTEs by location of its those who are poor and uninsured. In Line 1, by adding to the Line 1 on
different campuses. Two of the three other Department efforts, the OIG has Worksheet S–3, Part II (for wages and
multicampus hospitals chose to have performed an in-depth review of the hours respectively) the amounts on
their wage data allocated by their post-Katrina infrastructure of five New Lines 22.01, 26.01, and 27.01.) In
Medicare discharge data. One of the Orleans hospitals, including the calculating a hospital’s average salaries
hospitals provided FTE staff data for the hospitals’ staffing levels and wage costs. plus wage-related costs, we subtract
allocation. The average hourly wage The OIG’s final reports and from Line 1 (total salaries) the GME and
associated with each geographical recommendations are scheduled to be CRNA costs reported on Lines 2, 4.01,
location of a multicampus hospital is published in Spring 2008. 6, and 6.01, the Part B salaries reported
reflected in Table 2 of the Addendum to on Lines 3, 5 and 5.01, home office
G. Method for Computing the Proposed
this proposed rule. salaries reported on Line 7, and exclude
FY 2009 Unadjusted Wage Index
salaries reported on Lines 8 and 8.01
2. New Orleans’ Post-Katrina Wage The method used to compute the (that is, direct salaries attributable to
Index proposed FY 2009 wage index without SNF services, home health services, and
Since 2005 when Hurricane Katrina an occupational mix adjustment other subprovider components not
devastated the Gulf States, we have follows: subject to the IPPS). We also subtract
received numerous comments Step 1—As noted above, we based the from Line 1 the salaries for which no
suggesting that current Medicare proposed FY 2009 wage index on wage hours were reported. To determine total
payments to hospitals in New Orleans, data reported on the FY 2005 Medicare salaries plus wage-related costs, we add
Louisiana are inadequate, and the wage cost reports. We gathered data from each to the net hospital salaries the costs of
index does not accurately reflect the of the non-Federal, short-term, acute contract labor for direct patient care,
increase in labor costs experienced by care hospitals for which data were certain top management, pharmacy,
the city after the storm. The post-Katrina reported on the Worksheet S–3, Parts II laboratory, and nonteaching physician
effects on the New Orleans wage index and III of the Medicare cost report for Part A services (Lines 9 and 10), home
will not be realized in the wage index the hospital’s cost reporting period office salaries and wage-related costs
until FY 2010, when the wage index beginning on or after October 1, 2004, reported by the hospital on Lines 11 and
will be based on cost reporting periods and before October 1, 2005. In addition, 12, and nonexcluded area wage-related
beginning during FY 2006 (that is, we included data from some hospitals costs (Lines 13, 14, and 18).
beginning on or after October 1, 2005 that had cost reporting periods We note that contract labor and home
and before October 1, 2006). beginning before October 2004 and office salaries for which no
In responding to the health-related reported a cost reporting period corresponding hours are reported are
needs of people affected by the covering all of FY 2004. These data are not included. In addition, wage-related
hurricane, the Federal Government, included because no other data from costs for nonteaching physician Part A
through the Deficit Reduction Act of these hospitals would be available for employees (Line 18) are excluded if no
2005 (DRA), appropriated $2 billion in the cost reporting period described corresponding salaries are reported for
FY 2006. These funds allowed the above, and because particular labor those employees on Line 4.
Secretary to make available $160 market areas might be affected due to Step 3—Hours—With the exception of
million in February 2007 to Louisiana, the omission of these hospitals. wage-related costs, for which there are
Mississippi, and Alabama for payments However, we generally describe these no associated hours, we compute total
to hospitals and skilled nursing wage data as FY 2005 data. We note hours using the same methods as
facilities facing financial stress because that, if a hospital had more than one described for salaries in Step 2.
of changing wage rates not yet reflected cost reporting period beginning during Step 4—For each hospital reporting
in Medicare payment methodologies. In FY 2005 (for example, a hospital had both total overhead salaries and total
March and May 2007, the Department two short cost reporting periods overhead hours greater than zero, we
provided two additional DRA grants of beginning on or after October 1, 2004, then allocate overhead costs to areas of
$15 million and $35 million, and before October 1, 2005), we the hospital excluded from the wage
respectively, to Louisiana for included wage data from only one of the index calculation. First, we determine
professional health care workforce cost reporting periods, the longer, in the the ratio of excluded area hours (sum of
recruitment and sustainability in the wage index calculation. If there was Lines 8 and 8.01 of Worksheet S–3, Part
greater New Orleans area, namely the more than one cost reporting period and II) to revised total hours (Line 1 minus
Orleans, Jefferson, St. Bernard, and the periods were equal in length, we the sum of Part II, Lines 2, 3, 4.01, 5,
Plaquemines Parishes. In addition, the included the wage data from the later 5.01, 6, 6.01, 7, and Part III, Line 13 of
Department issued a supplemental period in the wage index calculation. Worksheet S–3). We then compute the
award of $60 million in provider Step 2—Salaries—The method used to amounts of overhead salaries and hours
stabilization grant funding to Louisiana, compute a hospital’s average hourly to be allocated to excluded areas by
Mississippi, and Alabama to continue to wage excludes certain costs that are not multiplying the above ratio by the total
help health care providers meet paid under the IPPS. (We note that, overhead salaries and hours reported on
changing wage rates not yet reflected by beginning with FY 2008 (72 FR 47315), Line 13 of Worksheet S–3, Part III. Next,
Medicare’s payment policies. On July we include lines 22.01, 26.01, and 27.01 we compute the amounts of overhead
23, 2007, HHS awarded to Louisiana a of Worksheet S–3, Part II for overhead wage-related costs to be allocated to
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new $100 million Primary Care Grant to services in the wage index. However, we excluded areas using three steps: (1) We
help increase access to primary care in note that the wages and hours on these determine the ratio of overhead hours
the Greater New Orleans area. The lines are not incorporated into line 101, (Part III, Line 13 minus the sum of lines
resulting stabilization and expansion of column 1 of Worksheet A, which, 22.01, 26.01, and 27.01) to revised hours
the community based primary care through the electronic cost reporting excluding the sum of lines 22.01, 26.01,
infrastructure, post Katrina, helps software, flows directly to line 1 of and 27.01 (Line 1 minus the sum of
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23631
Lines 2, 3, 4.01, 5, 5.01, 6, 6.01, 7, 8, the midpoint of the cost reporting Step 9—For each urban or rural labor
8.01, 22.01, 26.01, and 27.01). (We note period, as indicated below. market area, we calculate the hospital
that for the FY 2008 and subsequent wage index value, unadjusted for
wage index calculations, we are MIDPOINT OF COST REPORTING PERIOD occupational mix, by dividing the area
excluding the sum of lines 22.01, 26.01, average hourly wage obtained in Step 7
and 27.01 from the determination of the After Before Adjustment by the national average hourly wage
factor computed in Step 8.
ratio of overhead hours to revised hours,
since hospitals typically do not provide Step 10—Following the process set
10/14/2004 ........ 11/15/2004 1.05390
fringe benefits (wage-related costs) to 11/14/2004 ........ 12/15/2004 1.05035
forth above, we develop a separate
contract personnel. Therefore, it is not 12/14/2004 ........ 01/15/2005 1.04690 Puerto Rico-specific wage index for
necessary for the wage index calculation 01/14/2005 ........ 02/15/2005 1.04342 purposes of adjusting the Puerto Rico
to exclude overhead wage-related costs 02/14/2005 ........ 03/15/2005 1.03992 standardized amounts. (The national
for contract personnel. Further, if a 03/14/2005 ........ 04/15/2005 1.03641 Puerto Rico standardized amount is
04/14/2005 ........ 05/15/2005 1.03291 adjusted by a wage index calculated for
hospital does contribute to wage-related 05/14/2005 ........ 06/15/2005 1.02940 all Puerto Rico labor market areas based
costs for contracted personnel, the 06/14/2005 ........ 07/15/2005 1.02596 on the national average hourly wage as
instructions for lines 22.01, 26.01, and 07/14/2005 ........ 08/15/2005 1.02264 described above.) We add the total
27.01 require that associated wage- 08/14/2005 ........ 09/15/2005 1.01943
adjusted salaries plus wage-related costs
related costs be combined with wages 09/14/2005 ........ 10/15/2005 1.01627
10/14/2005 ........ 11/15/2005 1.01308 (as calculated in Step 5) for all hospitals
on the respective contract labor lines.); in Puerto Rico and divide the sum by
11/14/2005 ........ 12/15/2005 1.00987
(2) we compute overhead wage-related the total hours for Puerto Rico (as
12/14/2005 ........ 01/15/2006 1.00661
costs by multiplying the overhead hours 01/14/2006 ........ 02/15/2006 1.00333 calculated in Step 4) to arrive at an
ratio by wage-related costs reported on 02/14/2006 ........ 03/15/2006 1.00000 overall proposed average hourly wage
Part II, Lines 13, 14, and 18; and (3) we 03/14/2006 ........ 04/15/2006 0.99670 (unadjusted for occupational mix) of
multiply the computed overhead wage- $13.7956 for Puerto Rico. For each labor
related costs by the above excluded area For example, the midpoint of a cost market area in Puerto Rico, we calculate
hours ratio. Finally, we subtract the reporting period beginning January 1, the Puerto Rico-specific wage index
computed overhead salaries, wage- 2005, and ending December 31, 2005, is value by dividing the area average
related costs, and hours associated with June 30, 2005. An adjustment factor of hourly wage (as calculated in Step 7) by
excluded areas from the total salaries 1.02596 would be applied to the wages the overall Puerto Rico average hourly
(plus wage-related costs) and hours of a hospital with such a cost reporting wage.
derived in Steps 2 and 3. period. In addition, for the data for any Step 11—Section 4410 of Pub. L. 105–
Step 5—For each hospital, we adjust cost reporting period that began in FY 33 provides that, for discharges on or
2005 and covered a period of less than after October 1, 1997, the area wage
the total salaries plus wage-related costs
360 days or more than 370 days, we index applicable to any hospital that is
to a common period to determine total
annualize the data to reflect a 1-year located in an urban area of a State may
adjusted salaries plus wage-related
cost report. Dividing the data by the not be less than the area wage index
costs. To make the wage adjustment, we
number of days in the cost report and applicable to hospitals located in rural
estimate the percentage change in the
then multiplying the results by 365 areas in that State. For FY 2009, this
employment cost index (ECI) for
accomplishes annualization. proposed change would affect 266
compensation for each 30-day Step 6—Each hospital is assigned to
increment from October 14, 2003, hospitals in 69 urban areas. The areas
its appropriate urban or rural labor affected by this provision are identified
through April 15, 2005, for private market area before any reclassifications by a footnote in Table 4A in the
industry hospital workers from the BLS’ under section 1886(d)(8)(B), section Addendum of this proposed rule.
Compensation and Working Conditions. 1886(d)(8)(E), or section 1886(d)(10) of In the FY 2005 IPPS final rule (69 FR
We use the ECI because it reflects the the Act. Within each urban or rural 49109), we adopted the ‘‘imputed’’ floor
price increase associated with total labor market area, we add the total as a temporary 3-year measure to
compensation (salaries plus fringes) adjusted salaries plus wage-related costs address a concern by some individuals
rather than just the increase in salaries. obtained in Step 5 for all hospitals in that hospitals in all-urban States were
In addition, the ECI includes managers that area to determine the total adjusted disadvantaged by the absence of rural
as well as other hospital workers. This salaries plus wage-related costs for the hospitals to set a wage index floor in
methodology to compute the monthly labor market area. those States. The imputed floor was
update factors uses actual quarterly ECI Step 7—We divide the total adjusted originally set to expire in FY 2007, but
data and assures that the update factors salaries plus wage-related costs obtained we extended it an additional year in the
match the actual quarterly and annual under both methods in Step 6 by the FY 2008 IPPS final rule with comment
percent changes. We also note that, sum of the corresponding total hours period (72FR47321). As explained in
since April 2006 with the publication of (from Step 4) for all hospitals in each section III.B.2.b. of the preamble of this
March 2006 data, the BLS’ ECI uses a labor market area to determine an proposed rule, we are proposing to
different classification system, the North average hourly wage for the area. extend the imputed floor for an
American Industrial Classification Step 8—We add the total adjusted additional 3 years, through FY 2011.
System (NAICS), instead of the Standard salaries plus wage-related costs obtained
Industrial Codes (SICs), which no longer in Step5 for all hospitals in the Nation H. Analysis and Implementation of the
exist. We have consistently used the ECI and then divide the sum by the national Proposed Occupational Mix Adjustment
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as the data source for our wages and sum of total hours from Step 4 to arrive and the Proposed FY 2009 Occupational
salaries and other price proxies in the at a national average hourly wage. Using Mix Adjusted Wage Index
IPPS market basket and are not the data as described above, the As discussed in section III.D. of this
proposing to make any changes to the proposed national average hourly wage preamble, for FY 2009, we are proposing
usage at this time. The factors used to (unadjusted for occupational mix) is to apply the occupational mix
adjust the hospital’s data were based on $32.2489. adjustment to 100 percent of the FY
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23632 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
2009 wage index. We calculated the At the CBSA level, the percentage of hospitals located in that area. The
occupational mix adjustment using data hospital employees in the Nurse MGCRB issues its decisions by the end
from the 2006 occupational mix survey category ranged from a low of 27.26 of February for reclassifications that
data, using the methodology described percent in one CBSA, to a high of 85.30 become effective for the following fiscal
in section III.D.3. of this preamble. percent in another CBSA. year (beginning October 1). The
Using the 1st and 2nd quarter The proposed wage index values for regulations applicable to
occupational mix survey data and FY 2009 (except those for hospitals reclassifications by the MGCRB are
applying the occupational mix receiving wage index adjustments under located in 42 CFR 412.230 through
adjustment to 100 percent of the section 1886(d)(13) of the Act) are 412.280.
proposed FY2009 wage index results in shown in Tables 4A, 4B, 4C, and 4F in Section 1886(d)(10)(D)(v) of the Act
a proposed national average hourly the Addendum to this proposed rule. provides that, beginning with FY 2001,
wage of $32.2252 and a proposed Tables 3A and 3B in the Addendum a MGCRB decision on a hospital
Puerto-Rico specific average hourly to this proposed rule list the 3-year reclassification for purposes of the wage
wage of $13.7851. After excluding data average hourly wage for each labor index is effective for 3 fiscal years,
of hospitals that either submitted market area before the redesignation of unless the hospital elects to terminate
aberrant data that failed critical edits, or hospitals based on FYs 2007, 2008, and the reclassification. Section
that do not have FY 2005 Worksheet S– 2009 cost reporting periods. Table 3A 1886(d)(10)(D)(vi) of the Act provides
3 cost report data for use in calculating lists these data for urban areas and that the MGCRB must use average
the proposed FY2009 wage index, we Table 3B lists these data for rural areas. hourly wage data from the 3 most
calculated the proposed FY 2009 wage In addition, Table 2 in the Addendum recently published hospital wage
index using the occupational mix to this proposed rule includes the surveys in evaluating a hospital’s
survey data from 3,364 hospitals. Using adjusted average hourly wage for each reclassification application for FY 2003
the Worksheet S–3 cost report data of hospital from the FY 2003 and FY 2004 and any succeeding fiscal year.
3,533 hospitals and occupational mix cost reporting periods, as well as the FY Section 304(b) of Pub. L. 106–554
1st and/or 2nd quarter survey data from 2005 period used to calculate the provides that the Secretary must
3,364 hospitals represents a 95.2 percent proposed FY 2009 wage index. The 3- establish a mechanism under which a
survey response rate. The proposed year averages are calculated by dividing statewide entity may apply to have all
FY2009 national average hourly wages the sum of the dollars (adjusted to a of the geographic areas in the State
for each occupational mix nursing common reporting period using the treated as a single geographic area for
subcategory as calculated in Step 2 of method described previously) across all purposes of computing and applying a
the occupational mix calculation are as 3 years, by the sum of the hours. If a single wage index, for reclassifications
follows: hospital is missing data for any of the beginning in FY 2003. The
previous years, its average hourly wage implementing regulations for this
Occupational mix nursing sub- Average for the 3-year period is calculated based provision are located at 42 CFR 412.235.
category hourly wage Section 1886(d)(8)(B) of the Act
on the data available during that period.
The proposed wage index values in requires the Secretary to treat a hospital
National RN Management ........ $38.6341 located in a rural county adjacent to one
National RN Staff ...................... $33.4795 Tables 2, 4A, 4B, 4C, and 4F and the
National LPN ............................ $19.2316 average hourly wages in Tables 2, 3A, or more urban areas as being located in
National Nurse Aides, Order- and 3B in the Addendum to this the MSA to which the greatest number
lies, and Attendants .............. $13.6954 of workers in the county commute, if
proposed rule include the proposed
National Medical Assistants ..... $15.7714 the rural county would otherwise be
occupational mix adjustment. The
National Nurse Category .......... $28.7291 considered part of an urban area under
proposed wage index values in Tables 2,
the standards for designating MSAs and
The proposed national average hourly 4A, 4B, and 4C also include the
if the commuting rates used in
wage for the entire nurse category as proposed State-specific rural floor and
determining outlying counties were
computed in Step 5 of the occupational imputed floor budget neutrality
determined on the basis of the aggregate
mix calculation is $28.7291. Hospitals adjustments that are discussed in
number of resident workers who
with a nurse category average hourly section III.B.2. of this preamble. The
commute to (and, if applicable under
wage (as calculated in Step 4) of greater proposed State budget neutrality
the standards, from) the central county
than the national nurse category average adjustments for the rural and imputed
or counties of all contiguous MSAs. In
hourly wage receive an occupational floors are included in Tables 4D–1 and
light of the CBSA definitions and the
mix adjustment factor (as calculated in 4D–2 in the Addendum to this proposed
Census 2000 data that we implemented
Step 6) of less than 1.0. Hospitals with rule.
for FY 2005 (69 FR 49027), we
a nurse category average hourly wage (as I. Proposed Revisions to the Wage Index undertook to identify those counties
calculated in Step 4) of less than the Based on Hospital Redesignations meeting these criteria. Eligible counties
national nurse category average hourly are discussed and identified under
wage receive an occupational mix 1. General
section III.I.5. of this preamble.
adjustment factor (as calculated in Step Under section 1886(d)(10) of the Act,
6) of greater than 1.0. the MGCRB considers applications by 2. Effects of Reclassification/
Based on the January through June hospitals for geographic reclassification Redesignation
2006 occupational mix survey data, we for purposes of payment under the IPPS. Section 1886(d)(8)(C) of the Act
determined (in Step 7 of the Hospitals must apply to the MGCRB to provides that the application of the
occupational mix calculation) that the reclassify 13 months prior to the start of wage index to redesignated hospitals is
jlentini on PROD1PC65 with PROPOSALS2
proposed national percentage of the fiscal year for which reclassification dependent on the hypothetical impact
hospital employees in the Nurse is sought (generally by September 1). that the wage data from these hospitals
category is 42.99 percent, and the Generally, hospitals must be proximate would have on the wage index value for
proposed national percentage of to the labor market area to which they the area to which they have been
hospital employees in the All Other are seeking reclassification and must redesignated. These requirements for
Occupations category is 57.01 percent. demonstrate characteristics similar to determining the wage index values for
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23633
redesignated hospitals are applicable 3. FY 2009 MGCRB Reclassifications appeals, and the Administrator’s review
both to the hospitals deemed urban Under section 1886(d)(10) of the Act, process will be incorporated into the
under section 1886(d)(8)(B) of the Act the MGCRB considers applications by wage index values published in the FY
and hospitals that were reclassified as a hospitals for geographic reclassification 2009 final rule. These changes may
result of the MGCRB decisions under for purposes of payment under the IPPS. affect not only the wage index value for
section 1886(d)(10) of the Act. The specific procedures and rules that specific geographic areas, but also the
Therefore, as provided in section apply to the geographic reclassification wage index value redesignated hospitals
1886(d)(8)(C) of the Act, the wage index process are outlined in 42 CFR 412.230 receive; that is, whether they receive the
values were determined by considering through 412.280. wage index that includes the data for
the following: At the time this proposed rule was both the hospitals already in the area
• If including the wage data for the constructed, the MGCRB had completed and the redesignated hospitals. Further,
redesignated hospitals would reduce the its review of FY 2009 reclassification the wage index value for the area from
wage index value for the area to which requests. There were 314 hospitals which the hospitals are redesignated
the hospitals are redesignated by 1 approved for wage index may be affected.
percentage point or less, the area wage Applications for FY 2010
reclassifications by the MGCRB for FY
index value determined exclusive of the reclassifications are due to the MGCRB
2009. Because MGCRB wage index
wage data for the redesignated hospitals by September 2, 2008 (the first working
reclassifications are effective for 3 years,
applies to the redesignated hospitals. day of September 2008). We note that
hospitals reclassified during FY 2007 or this is also the deadline for canceling a
• If including the wage data for the FY 2008 are eligible to continue to be
redesignated hospitals reduces the wage previous wage index reclassification
reclassified based on prior withdrawal or termination under 42
index value for the area to which the reclassifications to current MSAs during
hospitals are redesignated by more than CFR 412.273(d). Applications and other
FY 2009. There were 175 hospitals information about MGCRB
1 percentage point, the area wage index approved for wage index
determined inclusive of the wage data reclassifications may be obtained,
reclassifications in FY 2007 and 324 beginning in mid-July 2008, via the
for the redesignated hospitals (the hospitals approved for wage index
combined wage index value) applies to CMS Internet Web site at: http://
reclassifications in FY 2008. Of all of cms.hhs.gov/providers/prrb/
the redesignated hospitals. the hospitals approved for
• If including the wage data for the mgcinfo.asp, or by calling the MGCRB at
reclassification for FY 2007, FY 2008, (410) 786-1174. The mailing address of
redesignated hospitals increases the and FY 2009, 813 hospitals are in a
wage index value for the urban area to the MGCRB is: 2520 Lord Baltimore
reclassification status for FY 2009. Drive, Suite L, Baltimore, MD 21244–
which the hospitals are redesignated, Under 42 CFR 412.273, hospitals that
both the area and the redesignated 2670.
have been reclassified by the MGCRB
hospitals receive the combined wage are permitted to withdraw their 4. FY 2008 Policy Clarifications and
index value. Otherwise, the hospitals applications within 45 days of the Revisions
located in the urban area receive a wage publication of a proposed rule. The We note below several policies related
index excluding the wage data of request for withdrawal of an application to geographic reclassification that were
hospitals redesignated into the area. for reclassification or termination of an clarified or revised in the FY 2008 IPPS
Rural areas whose wage index values existing 3-year reclassification that final rule with comment period (72 FR
would be reduced by excluding the would be effective in FY 2009 must be 47333):
wage data for hospitals that have been received by the MGCRB within 45 days • Reinstating Reclassifications—As
redesignated to another area continue to of the publication of this proposed rule. provided for in 42 CFR 412.273(b)(2),
have their wage index values calculated If a hospital elects to withdraw its wage once a hospital (or hospital group)
as if no redesignation had occurred index application after the MGCRB has accepts a newly approved
(otherwise, redesignated rural hospitals issued its decision, but within 45 days reclassification, any previous
are excluded from the calculation of the of publication of this proposed rule reclassification is permanently
rural wage index). The wage index value date, it may later cancel its withdrawal terminated.
for a redesignated rural hospital cannot in a subsequent year and request the • Geographic Reclassification for
be reduced below the wage index value MGCRB to reinstate its wage index Multicampus Hospitals—Because
for the rural areas of the State in which reclassification for the remaining fiscal campuses of a multicampus hospital can
the hospital is located. year(s) of the 3-year period (42 CFR now have their wages and hours data
CMS has also adopted the following 412.273(b)(2)(i)). The request to cancel a allocated by FTEs or discharge data, a
policies: prior withdrawal or termination must be hospital campus located in a geographic
• The wage data for a reclassified in writing to the MGCRB no later than area distinct from the geographic area
urban hospital is included in both the the deadline for submitting associated with the provider number of
wage index calculation of the area to reclassification applications for the the multicampus hospital will have
which the hospital is reclassified following fiscal year (42 CFR official wage data to supplement an
(subject to the rules described above) 412.273(d)). For further information individual or group reclassification
and the wage index calculation of the about withdrawing, terminating, or application (§ 412.230(d)(2)(v)).
urban area where the hospital is canceling a previous withdrawal or • New England Deemed Counties—
physically located. termination of a 3-year reclassification Hospitals in New England deemed
• In cases where urban hospitals have for wage index purposes, we refer the counties are treated the same as Lugar
reclassified to rural areas under 42 CFR reader to 42 CFR 412.273, as well as the hospitals in calculating the wage index.
jlentini on PROD1PC65 with PROPOSALS2
412.103, the urban hospital wage data August 1, 2002 IPPS final rule (67 FR That is, the area is considered rural, but
are: (a) Included in the rural wage index 50065), and the August 1, 2001 IPPS the hospitals within the area are deemed
calculation, unless doing so would final rule (66 FR 39887). to be urban (§ 412.64(b)(3)(ii)).
reduce the rural wage index; and (b) Changes to the wage index that result • ‘‘Fallback’’ Reclassifications—A
included in the urban area where the from withdrawals of requests for hospital will automatically be given its
hospital is physically located. reclassification, wage index corrections, most recently approved reclassification
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23634 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
(thereby permanently terminating any 5. Redesignations of Hospitals Under located in these counties have been
previously approved reclassifications) Section 1886(d)(8)(B) of the Act known as ‘‘Lugar’’ hospitals and the
unless it provides written notice to the counties themselves are often referred to
MGCRB within 45 days of publication of Section 1886(d)(8)(B) of the Act as ‘‘Lugar’’ counties. We provide the
the notice of proposed rulemaking that requires us to treat a hospital located in proposed FY 2009 chart below with the
it wishes to withdraw its most recently a rural county adjacent to one or more listing of the rural counties containing
approved reclassification and ‘‘fall urban areas as being located in the MSA the hospitals designated as urban under
back’’ to either its prior reclassification if certain criteria are met. Effective section 1886(d)(8)(B) of the Act. For
or its home area wage index for the beginning FY 2005, we use OMB’s 2000 discharges occurring on or after October
following fiscal year. CBSA standards and the Census 2000 1, 2008, hospitals located in the rural
data to identify counties in which county in the first column of this chart
hospitals qualify under section will be redesignated for purposes of
1886(d)(8)(B) of the Act to receive the using the wage index of the urban area
wage index of the urban area. Hospitals listed in the second column.
RURAL COUNTIES CONTAINING HOSPITALS REDESIGNATED AS URBAN UNDER SECTION 1886(D)(8)(B) OF THE ACT
[Based on CBSAs and Census 2000 Data]
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23635
RURAL COUNTIES CONTAINING HOSPITALS REDESIGNATED AS URBAN UNDER SECTION 1886(D)(8)(B) OF THE ACT—
Continued
[Based on CBSAs and Census 2000 Data]
As in the past, hospitals redesignated treated like reclassified hospitals for show that its average hourly wage is at
under section 1886(d)(8)(B) of the Act purposes of determining their least 106 percent of the average hourly
are also eligible to be reclassified to a applicable wage index and receive the wage of all other hospitals in the area in
different area by the MGCRB. Affected reclassified wage index (Table 4C in the which the hospital is located
hospitals are permitted to compare the Addendum to this proposed rule) for the (§ 412.230(d)(1)(iii)(C)). Under current
reclassified wage index for the labor urban area to which they have been rules, the hospital must also
market area in Table 4C in the redesignated. Because Lugar hospitals demonstrate that its average hourly
Addendum to this proposed rule into are treated like reclassified hospitals, wage is equal to at least 82 percent of
which they have been reclassified by the when they are seeking reclassification the average hourly wage of hospitals in
MGCRB to the wage index for the area by the MCGRB, they are subject to the the area to which it seeks redesignation
to which they are redesignated under rural reclassification rules set forth at 42 (§ 412.230(d)(1)(iv)(C)). However, we are
section 1886(d)(8)(B) of the Act. CFR 412.230. The procedural rules set proposing to increase this threshold to
Hospitals may withdraw from an forth at § 412.230 list the criteria that a 86 percent (as discussed in section
MCGRB reclassification within 45 days hospital must meet in order to reclassify III.B.2.a. of this preamble).
of the publication of this proposed rule. as a rural hospital. Lugar hospitals are Hospitals not located in a Lugar
jlentini on PROD1PC65 with PROPOSALS2
6. Reclassifications Under Section subject to the proximity criteria and County seeking reclassification to the
1886(d)(8)(B) of the Act payment thresholds that apply to rural urban area where the Lugar hospitals
hospitals. Specifically, the hospital have been redesignated are not
As discussed in last year’s FY 2008 must be no more than 35 miles from the permitted to measure to the Lugar
IPPS final rule with comment period (72 area to which it seeks reclassification County to demonstrate proximity (no
FR 47336–47337), Lugar hospitals are (§ 412.230(b)(1)); and the hospital must more than 15 miles for an urban
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23636 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
hospital, and no more than 35 miles for determining the out-migration redesignated under section 1886(d)(8) of
a rural hospital or the closest urban or adjustment (72 FR 47339). the Act will be deemed to have waived
rural area for RRCs or SCHs) in order to For the proposed FY 2009 wage the out-migration adjustment, unless
be reclassified to such urban area. These index, we calculated the out-migration they explicitly notify CMS within 45
hospitals must measure to the urban adjustment using the same formula days from the publication of this
area exclusive of the Lugar County to described in the FY 2005 IPPS final rule proposed rule that they elect to receive
meet the proximity or nearest urban or (69 FR 49064), with the addition of the out-migration adjustment instead.
rural area requirement. As discussed in using the post-reclassified wage indices, These notifications should be sent to the
the FY 2008 final rule with comment to calculate the out-migration following address: Centers for Medicare
period, we treat New England deemed adjustment. This adjustment is and Medicaid Services, Center for
counties in a manner consistent with calculated as follows: Medicare Management, Attention: Wage
how we treat Lugar counties. (We refer Step 1. Subtract the wage index for Index Adjustment Waivers, Division of
readers to 72 FR 47337 for a discussion the qualifying county from the wage Acute Care, Room C4–08–06, 7500
of this policy.) index of each of the higher wage area(s) Security Boulevard, Baltimore, MD
to which hospital workers commute. 21244–1850.
J. Proposed FY 2009 Wage Index Step 2. Divide the number of hospital Table 4J in the Addendum to this
Adjustment Based on Commuting employees residing in the qualifying proposed rule lists the proposed out-
Patterns of Hospital Employees county who are employed in such migration wage index adjustments for
In accordance with the broad higher wage index area by the total FY 2009. Hospitals that are not
discretion under section 1886(d)(13) of number of hospital employees residing otherwise reclassified or redesignated
the Act, as added by section 505 of Pub. in the qualifying county who are under section 1886(d)(8) or section
L. 108–173, beginning with FY 2005, we employed in any higher wage index 1886(d)(10) of the Act will
established a process to make area. For each of the higher wage index automatically receive the listed
adjustments to the hospital wage index areas, multiply this result by the result adjustment. In accordance with the
based on commuting patterns of obtained in Step 1. procedures discussed above,
hospital employees (the ‘‘out-migration’’ Step 3. Sum the products resulting redesignated/reclassified hospitals
adjustment). The process, outlined in from Step 2 (if the qualifying county has would be deemed to have waived the
the FY 2005 IPPS final rule (69 FR workers commuting to more than one out-migration adjustment unless CMS is
49061), provides for an increase in the higher wage index area). otherwise notified. Hospitals that are
wage index for hospitals located in Step 4. Multiply the result from Step eligible to receive the out-migration
certain counties that have a relatively 3 by the percentage of hospital wage index adjustment and that
high percentage of hospital employees employees who are residing in the withdraw their application for
who reside in the county but work in a qualifying county and who are reclassification would automatically
different county (or counties) with a employed in any higher wage index receive the wage index adjustment
higher wage index. Such adjustments to area. listed in Table 4J in the Addendum to
the wage index are effective for 3 years, These adjustments will be effective this proposed rule.
unless a hospital requests to waive the for each county for a period of 3 fiscal
application of the adjustment. A county years. For example, hospitals that K. Process for Requests for Wage Index
will not lose its status as a qualifying received the adjustment for the first Data Corrections
county due to wage index changes time in FY 2008 will be eligible to retain The preliminary, unaudited
during the 3-year period, and counties the adjustment for FY 2009. For Worksheet S–3 wage data and
will receive the same wage index hospitals in newly qualified counties, occupational mix survey data files for
increase for those three years. However, adjustments to the wage index are the FY 2009 wage index were made
a county that qualifies in any given year effective for 3 years, beginning with available on October 5, 2007, through
may no longer qualify after the 3-year discharges occurring on or after October the Internet on the CMS Web site at:
period, or it may qualify but receive a 1, 2008. http://www.cms.hhs.gov/
different adjustment to the wage index Hospitals receiving the wage index AcuteInpatientPPS/WIFN/
level. Hospitals that receive this adjustment under section 1886(d)(13)(F) list.asp#TopOfPage.
adjustment to their wage index are not of the Act are not eligible for In the interest of meeting the data
eligible for reclassification under reclassification under sections needs of the public, beginning with the
section 1886(d)(8) or section 1886(d)(10) 1886(d)(8) or (d)(10) of the Act unless proposed FY 2009 wage index, we
of the Act. Adjustments under this they waive the out-migration posted an additional public use file on
provision are not subject to the budget adjustment. Consistent with our FY our Web site that reflects the actual data
neutrality requirements under section 2005, 2006, 2007, and 2008 IPPS final that are used in computing the proposed
1886(d)(3)(E) of the Act. rules, we are proposing that hospitals wage index. The release of this new file
Hospitals located in counties that redesignated under section 1886(d)(8) of does not alter the current wage index
qualify for the wage index adjustment the Act or reclassified under section process or schedule. We notified the
are to receive an increase in the wage 1886(d)(10) of the Act will be deemed hospital community of the availability
index that is equal to the average of the to have chosen to retain their of these data as we do with the current
differences between the wage indices of redesignation or reclassification. Section public use wage data files through our
the labor market area(s) with higher 1886(d)(10) hospitals that wish to Hospital Open Door forum. We
wage indices and the wage index of the receive the out-migration adjustment, encourage hospitals to sign up for
resident county, weighted by the overall rather than their reclassification, should automatic notifications of information
jlentini on PROD1PC65 with PROPOSALS2
percentage of hospital workers residing follow the termination/withdrawal about hospital issues and the scheduling
in the qualifying county who are procedures specified in 42 CFR 412.273 of the Hospital Open Door forums at:
employed in any labor market area with and section III.I.3. of the preamble of http://www.cms.hhs.gov/
a higher wage index. Beginning with the this proposed rule. Otherwise, they will OpenDoorForums/.
FY 2008 wage index, we use post- be deemed to have waived the out- In a memorandum dated October 5,
reclassified wage indices when migration adjustment. Hospitals 2007, we instructed all fiscal
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23637
intermediaries/MACs to inform the IPPS submit sufficient documentation to At this point in the process, that is,
hospitals they service of the availability support their requests. after the release of the May 2008 wage
of the wage index data files and the After reviewing requested changes index data files, changes to the wage
process and timeframe for requesting submitted by hospitals, fiscal and occupational mix data will only be
revisions (including the specific intermediaries/MACs are to transmit made in those very limited situations
deadlines listed below). We also any additional revisions resulting from involving an error by the fiscal
instructed the fiscal intermediaries/ the hospitals’ reconsideration requests intermediary or the MAC or CMS that
MACs to advise hospitals that these data by April 14, 2008. The deadline for a the hospital could not have known
were also made available directly hospital to request CMS intervention in about before its review of the final wage
through their representative hospital cases where the hospital disagreed with index data files. Specifically, neither the
organizations. the fiscal intermediary’s (or, if fiscal intermediary or the MAC nor CMS
If a hospital wished to request a applicable, the MAC’s) policy will approve the following types of
change to its data as shown in the interpretations is April 21, 2008. requests:
October 5, 2007 wage and occupational Hospitals should also examine Table • Requests for wage index data
mix data files, the hospital was to 2 in the Addendum to this proposed corrections that were submitted too late
submit corrections along with complete, rule. Table 2 in the Addendum to this to be included in the data transmitted to
detailed supporting documentation to proposed rule contains each hospital’s CMS by fiscal intermediaries or the
its fiscal intermediary/MAC by adjusted average hourly wage used to MACs on or before April 21, 2008.
December 7, 2007. Hospitals were construct the wage index values for the • Requests for correction of errors
notified of this deadline and of all other past 3 years, including the FY 2005 data that were not, but could have been,
possible deadlines and requirements, used to construct the proposed FY 2009 identified during the hospital’s review
including the requirement to review and of the February 25, 2008 wage index
wage index. We note that the hospital
verify their data as posted on the public use files.
average hourly wages shown in Table 2
preliminary wage index data files on the • Requests to revisit factual
only reflect changes made to a hospital’s determinations or policy interpretations
Internet, through the October 5, 2007 data and transmitted to CMS by
memorandum referenced above. made by the fiscal intermediary or the
February 29, 2008. MAC or CMS during the wage index
In the October 5, 2007 memorandum,
we also specified that a hospital We will release the final wage index data correction process.
requesting revisions to its 1st and/or data public use files in early May 2008 Verified corrections to the wage index
2nd quarter occupational mix survey on the Internet at http:// data received timely by CMS and the
data was to copy its record(s) from the www.cms.hhs.gov/AcuteInpatientPPS/ fiscal intermediaries or the MACs (that
CY 2006 occupational mix preliminary WIFN/list.asp#TopOfPage. The May is, by June 9, 2008) will be incorporated
files posted to our Web site in October, 2008 public use files will be made into the final wage index in the FY 2009
highlight the revised cells on its available solely for the limited purpose IPPS final rule, which will be effective
spreadsheet, and submit its of identifying any potential errors made October 1, 2008.
spreadsheet(s) and complete by CMS or the fiscal intermediary/MAC We created the processes described
documentation to its fiscal in the entry of the final wage index data above to resolve all substantive wage
intermediary/MAC no later than that result from the correction process index data correction disputes before we
December 7, 2007. described above (revisions submitted to finalize the wage and occupational mix
The fiscal intermediaries (or, if CMS by the fiscal intermediaries/MACs data for the FY 2009 payment rates.
applicable, the MACs) notified the by April 14, 2008). If, after reviewing Accordingly, hospitals that do not meet
hospitals by mid-February 2008 of any the May 2008 final files, a hospital the procedural deadlines set forth above
changes to the wage index data as a believes that its wage or occupational will not be afforded a later opportunity
result of the desk reviews and the mix data are incorrect due to a fiscal to submit wage index data corrections or
resolution of the hospitals’ early- intermediary or MAC or CMS error in to dispute the fiscal intermediary’s (or,
December revision requests. The fiscal the entry or tabulation of the final data, if applicable the MAC’s) decision with
intermediaries/MACs also submitted the the hospital should send a letter to both respect to requested changes.
revised data to CMS by mid-February its fiscal intermediary or MAC and CMS Specifically, our policy is that hospitals
2008. CMS published the proposed that outlines why the hospital believes that do not meet the procedural
wage index public use files that an error exists and to provide all deadlines set forth above will not be
included hospitals’ revised wage index supporting information, including permitted to challenge later, before the
data on February 25, 2008. In a relevant dates (for example, when it first Provider Reimbursement Review Board,
memorandum also dated February 25, became aware of the error). CMS and the the failure of CMS to make a requested
2008, we instructed fiscal fiscal intermediaries (or, if applicable, data revision. (See W. A. Foote
intermediaries/MACs to notify all the MACs) must receive these requests Memorial Hospital v. Shalala, No. 99–
hospitals regarding the availability of no later than June 9, 2008. Requests CV–75202–DT (E.D. Mich. 2001) and
the proposed wage index public use mailed to CMS should be sent to: Palisades General Hospital v.
files and the criteria and process for Centers for Medicare & Medicaid Thompson, No. 99–1230 (D.D.C. 2003).)
requesting corrections and revisions to Services, Center for Medicare We refer the reader also to the FY 2000
the wage index data. Hospitals had until Management, Attention: Wage Index final rule (64 FR 41513) for a discussion
March 11, 2008 to submit requests to the Team, Division of Acute Care, C4–08– of the parameters for appealing to the
fiscal intermediaries/MACs for 06, 7500 Security Boulevard, Baltimore, PRRB for wage index data corrections.
reconsideration of adjustments made by MD 21244–1850. Again, we believe the wage index data
jlentini on PROD1PC65 with PROPOSALS2
the fiscal intermediaries/MACs as a Each request also must be sent to the correction process described above
result of the desk review, and to correct fiscal intermediary or the MAC. The provides hospitals with sufficient
errors due to CMS’s or the fiscal fiscal intermediary or the MAC will opportunity to bring errors in their wage
intermediary’s (or, if applicable, the review requests upon receipt and and occupational mix data to the fiscal
MAC’s) mishandling of the wage index contact CMS immediately to discuss its intermediary’s (or, if applicable, the
data. Hospitals were also required to findings. MAC’s) attention. Moreover, because
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23638 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
hospitals will have access to the final the fiscal intermediary (or if applicable costs as the labor-related share. The
wage index data by early May 2008, the MAC) and CMS correct the error labor-related share of the prospective
they have the opportunity to detect any using the established process and payment rate is adjusted by an index of
data entry or tabulation errors made by within the established schedule for relative labor costs, which is referred to
the fiscal intermediary or the MAC or requesting corrections to the wage index as the wage index.
CMS before the development and data, before the beginning of the fiscal Section 403 of Pub. L. 108–173
publication of the final FY 2009 wage year for the applicable IPPS update (that amended section 1886(d)(3)(E) of the
index by August 1, 2008, and the is, by the June 9, 2008 deadline for the Act to provide that the Secretary must
implementation of the FY 2009 wage FY 2009 wage index); and (3) CMS employ 62 percent as the labor-related
index on October 1, 2008. If hospitals agreed that the fiscal intermediary (or if share unless this ‘‘would result in lower
availed themselves of the opportunities applicable, the MAC) or CMS made an payments to a hospital than would
afforded to provide and make error in tabulating the hospital’s wage otherwise be made.’’ However, this
corrections to the wage and index data and the wage index should provision of Pub. L. 108–173 did not
occupational mix data, the wage index be corrected. change the legal requirement that the
implemented on October 1 should be In those circumstances where a Secretary estimate ‘‘from time to time’’
accurate. Nevertheless, in the event that hospital requested a correction to its the proportion of hospitals costs that are
errors are identified by hospitals and wage index data before CMS calculates ‘‘attributable to wages and wage-related
brought to our attention after June 9, the final wage index (that is, by the June costs.’’ We interpret this to mean that
2008, we retain the right to make deadline), and CMS acknowledges that hospitals receive payment based on
midyear changes to the wage index the error in the hospital’s wage index either a 62-percent labor-related share,
under very limited circumstances. data was caused by CMS’s or the fiscal or the labor-related share estimated from
Specifically, in accordance with 42 intermediary’s (or, if applicable, the time to time by the Secretary, depending
CFR 412.64(k)(1) of our existing MAC’s) mishandling of the data, we on which labor-related share resulted in
regulations, we make midyear believe that the hospital should not be a higher payment.
corrections to the wage index for an area penalized by our delay in publishing or We have continued our research into
only if a hospital can show that: (1) The implementing the correction. As with the assumptions employed in
fiscal intermediary or the MAC or CMS our current policy, we indicated that the calculating the labor-related share. Our
made an error in tabulating its data; and provision is not available to a hospital research involves analyzing the
(2) the requesting hospital could not seeking to revise another hospital’s data. compensation share separately for urban
have known about the error or did not In addition, the provision cannot be and rural hospitals, using regression
have an opportunity to correct the error, used to correct prior years’ wage index analysis to determine the proportion of
before the beginning of the fiscal year. data; it can only be used for the current costs influenced by the area wage index,
For purposes of this provision, ‘‘before Federal fiscal year. In other situations and exploring alternative methodologies
the beginning of the fiscal year’’ means where our policies would allow midyear to determine whether all or only a
by the June deadline for making corrections, we continue to believe that portion of professional fees and
corrections to the wage data for the it is appropriate to make prospective- nonlabor intensive services should be
following fiscal year’s wage index. This only corrections to the wage index. considered labor-related.
provision is not available to a hospital We note that, as with prospective In the FY 2006 IPPS final rule (70 FR
seeking to revise another hospital’s data changes to the wage index, the final 47392), we presented our analysis and
that may be affecting the requesting retroactive correction will be made conclusions regarding the methodology
hospital’s wage index for the labor irrespective of whether the change for updating the labor-related share for
market area. As indicated earlier, since increases or decreases a hospital’s FY 2006. We also recalculated a labor-
CMS makes the wage index data payment rate. In addition, we note that related share of 69.731 percent, using
available to hospitals on the CMS Web the policy of retroactive adjustment will the FY 2002-based PPS market basket
site prior to publishing both the still apply in those instances where a for discharges occurring on or after
proposed and final IPPS rules, and the judicial decision reverses a CMS denial October 1, 2005. In addition, we
fiscal intermediaries or the MAC notify of a hospital’s wage index data revision implemented this revised and rebased
hospitals directly of any wage index request. labor-related share in a budget neutral
data changes after completing their desk manner, but consistent with section
L. Labor-Related Share for the Proposed 1886(d)(3)(E) of the Act, we did not take
reviews, we do not expect that midyear Wage Index for FY 2009
corrections will be necessary. However, into account the additional payments
under our current policy, if the Section 1886(d)(3)(E) of the Act that would be made as a result of
correction of a data error changes the directs the Secretary to adjust the hospitals with a wage index less than or
wage index value for an area, the proportion of the national prospective equal to 1.0 being paid using a labor-
revised wage index value will be payment system base payment rates that related share lower than the labor-
effective prospectively from the date the are attributable to wages and wage- related share of hospitals with a wage
correction is made. related costs by a factor that reflects the index greater than 1.0.
In the FY 2006 IPPS final rule (70 FR relative differences in labor costs among The labor-related share is used to
47385), we revised 42 CFR 412.64(k)(2) geographic areas. It also directs the determine the proportion of the national
to specify that, effective on October 1, Secretary to estimate from time to time PPS base payment rate to which the area
2005, that is beginning with the FY 2006 the proportion of hospital costs that are wage index is applied. In this proposed
wage index, a change to the wage index labor-related: ‘‘The Secretary shall rule, we are not proposing to make any
can be made retroactive to the beginning adjust the proportion (as estimated by changes to the national average
jlentini on PROD1PC65 with PROPOSALS2
of the Federal fiscal year only when: (1) the Secretary from time to time) of proportion of operating costs that are
The fiscal intermediary (or, if hospitals’ costs which are attributable to attributable to wages and salaries, fringe
applicable, the MAC) or CMS made an wages and wage-related costs of the benefits, professional fees, contract
error in tabulating data used for the DRG prospective payment rates * * *’’ labor, and labor intensive services.
wage index calculation; (2) the hospital We refer to the portion of hospital costs Therefore, we are proposing to continue
knew about the error and requested that attributable to wages and wage-related to use a labor-related share of 69.731
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23639
percent for discharges occurring on or situations in which a patient is formally paired DRGs would be included if either
after October 1, 2008. Tables 1A and 1B released from an acute care hospital or one met the three criteria above.
in the Addendum to this proposed rule dies in the hospital. Section 412.4(b) If a DRG met the above criteria based
reflect this proposed labor-related share. defines transfers from one acute care on the Version 23.0 DRG Definitions
We note that section 403 of Pub. L. 108– hospital to another. Section 412.4(c) Manual and FY 2004 MedPAR data, we
173 amended sections 1886(d)(3)(E) and establishes the conditions under which made the DRG subject to the postacute
1886(d)(9)(C)(iv) of the Act to provide we consider a discharge to be a transfer care transfer policy. We noted in the FY
that the Secretary must employ 62 for purposes of our postacute care 2006 final rule that we would not revise
percent as the labor-related share unless transfer policy. In transfer situations, the list of DRGs subject to the postacute
this employment ‘‘would result in lower the transferring hospital is paid based care transfer policy annually unless we
payments to a hospital than would on a per diem rate for each day of the made a change to a specific CMS DRG.
otherwise be made.’’ stay, not to exceed the full MS–DRG We established this policy to promote
We also are proposing to continue to payment that would have been made if certainty and stability in the postacute
use a labor-related share for the Puerto the patient had been discharged without care transfer payment policy. Annual
Rico-specific standardized amounts of being transferred. reviews of the list of CMS DRGs subject
58.7 percent for discharges occurring on The per diem rate paid to a to the policy would likely lead to great
or after October 1, 2008. Consistent with transferring hospital is calculated by volatility in the payment methodology
our methodology for determining the dividing the full MS–DRG payment by with certain DRGs qualifying for the
national labor-related share, we added the geometric mean length of stay for policy in one year, deleted the next
the Puerto Rico-specific relative weights the MS–DRG. Based on an analysis that year, only to be reinstated the following
for wages and salaries, fringe benefits, showed that the first day of year. However, we noted that, over time,
contract labor, nonmedical professional hospitalization is the most expensive as treatment practices change, it was
fees, and other labor-intensive services (60 FR 5804), our policy generally possible that some CMS DRGs that
to determine the labor-related share. provides for payment that is double the qualified for the policy will no longer be
Puerto Rico hospitals are paid based on per diem amount for the first day, with discharged with great frequency to
75 percent of the national standardized each subsequent day paid at the per postacute care. Similarly, we explained
amounts and 25 percent of the Puerto diem amount up to the full DRG that there may be other CMS DRGs that
Rico-specific standardized amounts. For payment (§ 412.4(f)(1)). Transfer cases at that time had a low rate of discharges
Puerto Rico hospitals, the national are also eligible for outlier payments. to postacute care, but which might have
labor-related share will always be 62 The outlier threshold for transfer cases very high rates in the future.
percent because the wage index for all The regulations at § 412.4 further
is equal to the fixed-loss outlier
Puerto Rico hospitals is less than 1.0. A specify that if a DRG did not exist in
threshold for nontransfer cases (adjusted
Puerto Rico-specific wage index is Version 23.0 of the DRG Definitions
for geographic variations in costs),
applied to the Puerto Rico-specific Manual or a DRG included in Version
divided by the geometric mean length of
portion of payments to the hospitals. 23.0 of the DRG Definitions Manual is
stay for the MS–DRG, multiplied by the
The labor-related share of a hospital’s revised, the DRG will be a qualifying
length of stay for the case plus one day.
Puerto Rico-specific rate will be either DRG if it meets the following criteria
The purpose of the IPPS postacute care
62 percent or the Puerto Rico-specific based on the version of the DRG
transfer payment policy is to avoid
labor-related share depending on which Definitions Manual in use when the
providing an incentive for a hospital to
results in higher payments to the new or revised DRG first became
transfer patients to another hospital, a
hospital. If the hospital has a Puerto effective, using the most recent
SNF, or home under a written plan of
Rico-specific wage index of greater than complete year of MedPAR data:
care for home health services early in • The total number of discharges to
1.0, we will set the hospital’s rates using
the patients’’ stay in order to minimize postacute care in the DRG must equal or
a labor-related share of 62 percent for
costs while still receiving the full MS– exceed the 55th percentile for all DRGs;
the 25 percent portion of the hospital’s
payment determined by the Puerto Rico DRG payment. The transfer policy and
standardized amounts because this adjusts the payments to approximate the • The proportion of short-stay
amount will result in higher payments. reduced costs of transfer cases. discharges to postacute care to total
Conversely, a hospital with a Puerto Beginning with the FY 2006 IPPS, the discharges in the DRG exceeds the 55th
Rico-specific wage index of less than 1.0 regulations at § 412.4 specified that, percentile for all DRGs. A short-stay
will be paid using the Puerto Rico- effective October 1, 2005, a DRG would discharge is a discharge before the
specific labor-related share of 58.7 be subject to the postacute care transfer geometric mean length of stay for the
percent of the Puerto Rico-specific rates policy if, based on Version 23.0 of the DRG.
because the lower labor-related share DRG Definitions Manual (FY 2006), A DRG also is a qualifying DRG if it
will result in higher payments. The using data from the March 2005 update is paired with another DRG based on the
proposed Puerto Rico labor-related of FY 2004 MedPAR file, the DRG meets presence or absence of a CC or MCV that
share of 58.7 percent for FY 2008 is the following criteria: meets either of the above two criteria.
reflected in the Table 1C of the • The DRG had a geometric mean The MS–DRGs that we adopted for FY
Addendum to this proposed rule. length of stay of at least 3 days; 2008 were a significant revision to the
• The DRG had at least 2,050 CMS DRG system (72 FR 47141).
IV. Other Decisions and Proposed postacute care transfer cases; and Because the MS–DRGs were not
Changes to the IPPS for Operating Costs • At least 5.5 percent of the cases in reflected in Version 23.0 of the DRG
and GME Costs the DRG were discharged to postacute Definitions Manual, consistent with
jlentini on PROD1PC65 with PROPOSALS2
A. Proposed Changes to the Postacute care prior to the geometric mean length § 412.4, we established policy to
Care Transfer Policy (§ 412.4) of stay for the DRG. recalculate the 55th percentile
In addition, if the DRG was one of a thresholds in order to determine which
1. Background paired set of DRGs based on the MS–DRGs would be subject to the
Existing regulations at § 412.4(a) presence or absence of a CC or major postacute care transfer policy (72 FR
define discharges under the IPPS as cardiovascular condition (MCV), both 47186 through 47188). Further, under
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23640 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
the MS–DRGs, the subdivisions within or after October 1, 1998, a ‘‘qualified Secretary the authority to determine an
the base DRGs are different than those discharge’’ from one of DRGs selected appropriate timeframe for the
under the previous CMS DRGs. Unlike by the Secretary to a postacute care application of the postacute care
the CMS DRGs, the MS–DRGs are not provider would be treated as a transfer transfer policy in cases where home
divided based on the presence or case. This section required the Secretary health services commence subsequent to
absence of a CC or MCV. Rather, the to define and pay as transfers all cases discharge from an acute care hospital. In
MS–DRGs have up to three subdivisions assigned to one of the DRGs selected by the FY 1999 final IPPS rule, we
based on: (1) The presence of a MCC; (2) the Secretary, if the individuals are established the policy that the postacute
the presence of a CC; or (3) the absence discharged to one of the following care transfer policy would apply to
of either an MCC or CC. Consistent with postacute care settings: cases in which the home health care
our previous policy under which both • A hospital or hospital unit that is begins within 3 days of the discharge
CMS DRGs in a CC/non-CC pair were not a subsection 1886(d) hospital. from an acute care policy. We noted in
qualifying DRGs if one of the pair (Section 1886(d)(1)(B) of the Act that rule that we did not believe that it
qualified, we established that each MS– identifies the hospitals and hospital was appropriate to limit the transfer
DRG that shared a base MS–DRG will be units that are excluded from the term definition to cases in which home
a qualifying DRG if one of the MS–DRGs ‘‘subsection (d) hospital’’ as psychiatric health care begins on the same day as
that shared the base DRG qualifies. We hospitals and units, rehabilitation the patient is discharged from the
revised § 412.4(d)(3)(ii) to codify this hospitals and units, children’s hospitals, hospital. We observed that data
policy. long-term care hospitals, and cancer indicated that less than 8 percent of
Similarly, the adoption of the MS– hospitals.) discharged patients who receive home
DRGs also necessitated a revision to one • A SNF (as defined at section1819(a) health care begin receiving those
of the criteria used in § 412.4(f)(5) of the of the Act). services on the date of discharge. It is
regulations to determine whether a DRG • Home health services provided by a unreasonable to expect that patients
meets the criteria for payment under the home health agency, if the services who are discharged later in the day
‘‘special payment methodology.’’ Under relate to the condition or diagnosis for would receive a home health visit that
the special payment methodology, a which the individual received inpatient
same day. Furthermore, we believed
case subject to the special payment hospital services, and if the home health
that the financial incentive to delay
methodology that is transferred early to services are provided within an
needed home health care for only a
a postacute care setting will be paid 50 appropriate period (as determined by
matter of hours would be overwhelming
percent of the total IPPS payment plus the Secretary). In the FY 1999 IPPS final
if we limited the timeframe to one day.
the average per diem for the first day of rule (63 FR 40975 through 40976 and
At the time of that final rule, we
the stay. In addition, the hospital will 40979 through 40981), we specified that
explained that we believed that 3 days
receive 50 percent of the per diem a patient discharged to home would be
would be a more appropriate timeframe
amount for each subsequent day of the considered transferred to postacute care
because it would mitigate the incentive
stay, up to the full MS–DRG payment if the patient received home health
to delay home health services to avoid
amount. A CMS DRG was subject to the services within 3 days after the date of
the application of the postacute care
special payment methodology if it met discharge. In addition, in the FY 1999
transfer policy, and because a 3-day
the criteria of § 412.4(f)(5). Section IPPS final rule, we did not include
timeframe was consistent with existing
412.4(f)(5)(iv) specifies that, for patients transferred to a swing-bed for
patterns of care.
discharges occurring on or after October skilled nursing care in the definition of
1, 2005, and prior to October 1, 2007, if postacute care transfer cases (63 FR In that final rule, we also noted that
a DRG meets the criteria specified under 40977). a number of commenters had raised
§ 412.4(f)(5)(i) through (f)(5)(iii), any issues and questions concerning the
2. Proposed Policy Change Relating to proposal to adopt 3 days as the
DRG that is paired with it based on the
Transfers to Home with a Written Plan appropriate timeframe for the
presence or absence of a CC or MCV is
for the Provision of Home Health application of the postacute care
also subject to the special payment
Services transfer policy in these cases. While
methodology. Given that this criterion
was no longer applicable under the MS– As noted above, in the FY 1999 IPPS most of the commenters advocated
DRG system, in the FY 2008 final rule final rule (63 FR 40975 through 40976 shorter timeframes, on the grounds that
with comment period, we added a new and 40979 through 40981), we postacute care beginning 3 days after a
§ 412.4(f)(6) (42 FR 47188 and 47410). determined that 3 days is an appropriate discharge should not be considered a
Section 412.4(f)(6) provides that, for period within which home health substitute for inpatient hospital care,
discharges on or after October 1, 2007, services should begin following a others suggested that a 3-day window
if an MS–DRG meets the criteria beneficiary’s discharge to the home in might still allow for needlessly
specified under §§ 412.4(f)(6)(i) through order for the discharge to be considered prolonged hospital care or delayed
(f)(6)(iii), any other MS–DRG that is part a ‘‘qualified discharge’’ subject to the home health in order to avoid the
of the same MS–DRG group is also payment adjustment for postacute care application of the postacute care
subject to the special payment transfer cases. In that same final rule, transfer policy. Although MedPAC
methodology. We updated this criterion we noted that we would monitor agreed with the commenters who
so that it conformed to the changes whether 3 days would remain an asserted that home health care services
associated with adopting MS–DRGs for appropriate timeframe. furnished after a delay of more than one
FY 2008. The revision makes an MS– Section 1886(d)(5)(J)(ii)(III) of the Act day may not necessarily be regarded as
DRG subject to the special payment provides that the discharge of an substituting for inpatient acute care,
jlentini on PROD1PC65 with PROPOSALS2
methodology if it shares a base MS–DRG individual who receives home health they also noted that a 3-day window
with an MS–DRG that meets the criteria services upon discharge will be treated allows for the fact that most home
for receiving the special payment as a transfer if ‘‘such services are health patients do not receive care every
methodology. provided within an appropriate period day, as well as for those occasions in
Section 1886(d)(5)(J) of the Act as determined by the Secretary * * *’’. which there may be a delay in arranging
provides that, effective for discharges on The statute thus confers upon the for the provision of planned care (for
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23641
example, an intervening weekend). The they were the DRGs to which the acute inpatient care. Specifically,
commission also stated that a shorter postacute care transfer policy applied average Medicare payments per home
period may create a stronger incentive for FYs 1999 through 2003 and because health care visit are consistently higher
to delay the provision of necessary care we expect that trends that we found in for patients discharged prior to the
beyond the window so that the hospital the data with those DRGs would be geometric mean length of stay than for
will receive the full DRG payment. In likely to accurately reflect provider patients discharged at or after the
the light of these comments and, in practices after the inception of the geometric mean length of stay. The
particular, of the concern that a 3-day postacute care transfer policy. We average home health care per visit
timeframe still allowed for some expect that provider practices for the payments for patients treated for the
incentive to delay necessary home original 10 DRGs would be consistent relevant DRGs and discharged before the
health services in order to avoid the even with the expansion of the DRGs geometric mean length of stay are $204
application of the postacute care that are subject to the postacute care when the initiation of home health care
transfer policy, we indicated that we transfer policy. We note that providers began on the second day after discharge,
would continue to monitor this policy may have even a greater incentive to $199 on the third day, and $182 on the
in order to track any changes in delay the initiation of home health care sixth day, compared to $177, $163, and
practices that may indicate the need for in an effort to avoid the postacute care $171, respectively for patients
revising the window. transfer policy now that there are more discharged on or after the geometric
Since the adoption of this policy in DRGs to which the policy applies. We mean length of stay. Furthermore, the
FY 1999, we have continued to receive compared data on home health services ratio of the payments for these two
reports that some providers discharge provided to patients who were groups actually increases from 1.16 on
patients prior to the geometric mean discharged prior to the geometric mean the third day after discharge to 1.22 on
length of stay but intentionally delay length of stay to patients who were the fourth day, before falling again to
home health services beyond 3 days discharged at or beyond the geometric 1.04, 1.07, and 1.08 on the fifth, sixth,
after the acute hospital discharge in mean length of stay. For purposes of this and seventh days. This suggests the
order to avoid the postacute care analysis, we assumed that home health possibility that home health care for
transfer payment adjustment policy. was the first discharge designation from some relatively sicker patients is being
These reports, and the concerns the acute care hospital setting. delayed until just beyond the 3-day
expressed by some commenters in FY
The data showed that, on average, the window during which the postacute
1999 about the adequacy of a 3-day
window to reduce such incentives, have Medicare payment per home health visit care transfer policy applies. In the light
prompted us to examine the available was higher for patients who were of these data, we believe that it is
data concerning the initiation and discharged prior to the geometric mean appropriate to propose extending the
program payments for home health care length of stay (as compared to patients applicable timeframe in order to reduce
subsequent to discharge from postacute who were discharged at or beyond the the incentive for providers to delay
care. geometric mean length of stay). home health care when discharging
We merged the FY 2004 MedPAR file Additionally, we found some evidence patients from the acute care setting.
with postacute care bill files matching in the data suggesting that, for patients Further examination of the data
beneficiary identification numbers and discharged prior to the geometric mean indicates that the average per day
discharge and admission dates and length of stay for many DRGs, hospitals Medicare payments for home health
looked at the 10 DRGs that were subject may indeed be discharging patients care for those patients, in the DRGs to
to the postacute care transfer policy earlier than advisable, providing less which the postacute care transfer policy
from FYs 1999 through 2003 (DRG 14 than the optimal amount of acute applies, who are discharged from the
(Intracranial Hemorrhage and Stroke inpatient care, and are instead hospital prior to the geometric mean
with Infarction (formerly ‘‘Specific substituting home health care for length of stay, stabilizes at a somewhat
Cerebrovascular Disorders Except inpatient services, resulting in higher lower amount when the initiation of
Transient Ischemic Attack’’)); DRG 113 home health care payments under the home health visits begins on the seventh
(Amputation for Circulatory System Medicare program. One generally would and subsequent days after discharge.
Disorders Except Upper Limb and Toe); expect that patients discharged prior to Specifically, average payments per visit
DRG 209 (Major Joint Limb the geometric mean length of stay are for this group fall from $182 when home
Reattachment Procedures of Lower genuinely less severely ill than patients health services began on the sixth day
Extremity); DRG 210 (Hip and Femur discharged at or after the geometric after the acute care hospital discharge to
Procedures Except Major Joint mean length of stay because patients in $174 on the seventh day, and then
Procedures ≤17 with CC); DRG 211 (Hip the former group are judged to be remain relatively steady at $171, $177,
and Femur Procedures Except Major appropriate for discharge after less acute and $172 on the eighth, ninth, and tenth
Joint Procedures Age ≤17 without CC); inpatient care. However, our data paint days. This suggests that a 7-day period
DRG 236 (Fractures of Hip and Pelvis); a different picture. For example, the would be an appropriate point at which
DRG 263 (Skin Graft and/or data on the average per day Medicare to establish a new timeframe. The
Debridement for Skin Ulcer or Cellulitis payments for home health care for those stabilization of average home health
with CC); DRG 264 (Skin Graft and/or patients who are discharged from the care visit payments at and after the
Debridement for Skin Ulcer or Cellulitis hospital prior to the geometric mean seventh day suggests that this may be
without CC); DRG 429 (Organic length of stay in the DRGs to which the the point at which the incentives to
Disturbances and Mental Retardation); postacute care transfer policy applies, as delay the start of home health care in
and DRG 483 (Tracheostomy with compared to Medicare payments for order to avoid the application of the
jlentini on PROD1PC65 with PROPOSALS2
Mechanical Ventiliation 96+ Hours or patients discharged from the hospital at postacute care transfer policy are
Principal Diagnosis Except Face, Mouth, or after the geometric mean length of reduced. As a consequence of this
and Neck Diagnoses (formerly stay, show patterns other than what analysis, in this proposed rule, we are
‘‘Tracheostomy Except for Face, Mouth, might be expected if hospitals are proposing to revise § 412.4(c)(3) to
and Neck Diagnoses’’)). We selected the generally discharging patients for home extend the timeframe to within 7 days
original 10 ‘‘qualified DRGs’’ because health care only after the full amount of of discharge to home under a written
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23642 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
plan for the provision of home health DRGs and to add one new MS–DRG Modernization Act (MMA), which
services, effective October 1, 2008. We (discussed under section II.G. of this provided the full annual payment
believe that extending the applicable preamble), we are proposing to evaluate update only to ‘‘subsection (d)
timeframe will lessen the incentive for those MS–DRGs under our existing hospitals’’ (that is, hospitals paid under
providers to delay the start of home postacute care transfer criteria in order the IPPS) that successfully reported on
health care after discharging patients to determine whether any of the revised a set of widely-agreed upon quality
from the acute care hospital setting. or new MS–DRGs will meet the measures. Since FY 2007, as required by
During the comment period on this postacute care transfer criteria for FY subsequent legislation (the Deficit
proposed rule, we plan to continue to 2009. Therefore, for 2009, we are Reduction Act (DRA)) the number of
search our data on postacute care evaluating MS–DRGs 001, 002, 215, 245, quality measures and the amount of the
discharges to home health services. We 901 through 909, 913 through 923, 955 financial incentive have increased.
welcome comments and suggestions on through 959, and 963 through 965. Any As a result, the great majority of
other data analyses that can be revisions made would not constitute a hospitals now report on quality
performed to determine an appropriate change to the application of the measures for heart failure, heart disease,
timeframe for which the postacute care postacute care transfer policy. A list pneumonia, and surgical infection and
transfer policy would apply. indicating which MS–DRGs would be received the full annual update for FY
In addition to the reasons noted subject to the postacute care transfer 2008. The number of measures has
above, we believe that 7 days is policy for FY 2009 can be found in continued to grow and the types of
currently an appropriate timeframe Table 5 in the Addendum to this measures have grown as well, with the
because we believe that accommodates proposed rule. addition of outcomes measures, such as
current practices and it is sufficiently heart attack and heart failure mortality
long enough to lessen the likelihood B. Reporting of Hospital Quality Data measures, and the HCAHPS measure of
that providers would delay the for Annual Hospital Payment Update patient satisfaction. In section IV.B.2. of
initiation of necessary home health (§ 412.64(d)(2)) this preamble, we are seeking public
services. At the same time, we believe 1. Background comments on proposed additional
that 7 days is narrow enough that we a. Overview
quality measures.
would still expect the majority of the Reporting on these measures provides
home health services to be related to the CMS is transforming the Medicare hospitals a greater awareness of the
condition to which the acute inpatient program from a passive payer to an quality of care they provide and
hospital stay was necessary. Further, we active purchaser of higher quality, more provides actionable information for
note that there may be some cases for efficient health care. Such care will consumers to make more informed
which it is not clinically appropriate to contribute to the sustainability of the decisions about their health care
begin home health services immediately Medicare program, encourage the providers and treatments.
following an acute care discharge, and delivery of high quality care while Moving beyond reporting to
that even when home health services are avoiding unnecessary costs, and help performance, CMS has designed a
clinically appropriate sooner than ensure high value for beneficiaries. To Hospital Value-Based Purchasing Plan
within 7 days of acute care discharge, support this transformation, CMS has that would link hospital payments to
home health services may not be worked with stakeholders to develop their actual performance on quality
immediately available. and implement quality measures, make measures. In accordance with the DRA,
We note that, as we stated in the FY provider and plan performance public, the Plan was submitted to Congress in
2000 IPPS final rule (65 FR 47081), if link payment incentives to reporting on November 2007. We discuss the Plan
the hospital’s continuing care plan for measures, and ultimately is working to more fully in section IV.C. of this
the patient is not related to the purpose link payment to actual performance on preamble.
of the inpatient hospital admission, a these measures. Commonly referred to The ongoing CMS Premier Hospital
condition code 42 must be entered on as value-based purchasing, this policy Quality Incentive Demonstration project
the claim. If the continuing care plan is aligns payment incentives with the is another effort linking payments to
related to the purpose of the inpatient quality of care as well as the resources quality performance. Launched in 2003,
hospital admission but begins after 7 used to deliver care to encourage the the Premier Hospital Quality Incentive
days (formerly after 3 days) of discharge, delivery of high-value health care. Demonstration project promotes
a condition code 43 must be entered on The success of this transformation is measurable improvements in the quality
the claim. The presence of either of supported by and dependent upon an of care, examining whether economic
these condition codes in conjunction increasing number of widely-agreed incentives to hospitals are effective at
with patient status discharge code 06 upon quality measures. The Medicare improving the quality of care. Early
(Discharged/Transferred to Home under program has defined measures of quality evidence from the project indicates that
Care of Organized Home Health Service in almost every setting and measures linking payments to quality
Organization in Anticipation of Covered some aspect of care for almost all performance can be effective.
Skilled Care) will result in full payment Medicare beneficiaries. These measures As required by section 5001(c) the
rather than the transfer payment include clinical processes, patient DRA, CMS also has implemented a
amount. perception of their care experience, and, program intended to encourage the
increasingly, outcomes. prevention of certain avoidable or
3. Evaluation of MS–DRGs Under The Medicare program has preventable hospital-acquired
Postacute Care Transfer Policy for FY established mechanisms for collecting conditions (HACs), including infections,
2009 information on these measures, such as that may occur during a hospital stay.
jlentini on PROD1PC65 with PROPOSALS2
For FY 2009, we are not proposing to QualityNet, an Internet-based process Beginning October 1, 2007, CMS
make any changes to the criteria by that hospitals use to report all-payer required hospitals to begin reporting
which an MS–DRG would qualify for information. Initial voluntary efforts information on Medicare claims
inclusion in the postacute care transfer were supplemented beginning in FY specifying whether certain diagnoses
policy. However, because we are 2005 by a provision in the Medicare were present on admission (POA).
proposing to revise some existing MS– Prescription Drug Improvement and Beginning October 1, 2008, CMS will no
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23643
longer pay hospitals for a DRG using the Agency for Healthcare Research and security of personal health information.
higher-paying CC or MCC associated Quality (AHRQ), as well as CMS and Data from this initiative are used to
with one or more of these conditions (if others. In July 2003, CMS began the populate the Hospital Compare Web
no other condition meeting the higher National Voluntary Hospital Reporting site, www.hospitalcompare.hhs.gov.
paying CC or MCC criteria is present) Initiative. This initiative is now known This Web site assists beneficiaries and
unless the condition was POA (that is, as the Hospital Quality Alliance: the general public by providing
not acquired during the hospital stay). Improving Care through Information information on hospital quality of care
Linking a payment incentive to (HQA). for consumers who need to select a
hospitals’ prevention of avoidable or We established the following ‘‘starter hospital. It further serves to encourage
preventable HACs is a strong approach set’’ of 10 quality measures for consumers to work with their doctors
for encouraging high quality care. voluntary reporting as of November 1, and hospitals to discuss the quality of
Combating these HACs can reduce 2003: care hospitals provide to patients,
morbidity and mortality as well as thereby providing an additional
reducing unnecessary costs. In the FY Heart Attack (Acute Myocardial incentive to improve the quality of care
2008 IPPS final rule with comment Infarction or AMI) that they furnish.
period (72 FR 47217), CMS identified • Was aspirin given to the patient
c. Hospital Quality Data Reporting
eight HACs. In section II.F. of this upon arrival to the hospital?
Under Section 501(b) of Pub. L. 108–173
preamble, CMS is seeking comment on • Was aspirin prescribed when the
additional proposed conditions. patient was discharged? Section 1886(b)(3)(B)(vii) of the Act,
CMS is committed to enhancing these • Was a beta blocker given to the as added by section 501(b) of Pub. L.
value-based purchasing programs, in patient upon arrival to the hospital? 108–173, revised the mechanism used to
close collaboration with stakeholders, • Was a beta blocker prescribed when update the standardized amount of
through the development and use of the patient was discharged? payment for inpatient hospital operating
new measures for quality reporting, • Was an Angiotensin Converting costs. Specifically, the statute provided
expanded public reporting, greater and Enzyme (ACE) Inhibitor given for the for a reduction of 0.4 percentage points
more widespread incentives in the patient with heart failure? to the update percentage increase (also
payment system for reporting on such known as the market basket update) for
Heart Failure (HF) each of FYs 2005 through 2007 for any
measures, and ultimately performance
on those measures. These initiatives • Did the patient get an assessment of subsection (d) hospital that does not
hold the potential to transform the his or her heart function? submit data on a set of 10 quality
delivery of health care by rewarding • Was an Angiotensin Converting indicators established by the Secretary
quality of care and delivering higher Enzyme (ACE) Inhibitor given to the as of November 1, 2003. The statute also
value to Medicare beneficiaries. patient? provided that any reduction would
A critical element of value-based apply only to the fiscal year involved,
Pneumonia (PN)
purchasing is well-accepted measures. and would not be taken into account in
Hospitals can then measure their • Was an antibiotic given to the computing the applicable percentage
performance relative to other hospitals. patient in a timely way? increase for a subsequent fiscal year.
Further, this information can be posted • Had the patient received a This measure established an incentive
for consumers to use to make more pneumococcal vaccination? for IPPS hospitals to submit data on the
informed choices about their care. In • Was the patient’s oxygen level quality measures established by the
this section IV.B. of this preamble, we assessed? Secretary.
describe past and current efforts to make This starter set of 10 quality measures We initially implemented section
this information available and proposals was endorsed by the NQF. The NQF is 1886(b)(3)(B)(vii) of the Act in the FY
to expand these efforts and make even a voluntary consensus standard-setting 2005 IPPS final rule (69 FR 49078). In
more useful hospital quality information organization established to standardize addition, we established the Reporting
available to the public. health care quality measurement and Hospital Quality Data for Annual
reporting through its consensus Payment Update (RHQDAPU) program
b. Voluntary Hospital Quality Data development process. In addition, this and added 42 CFR 412.64(d)(2) to our
Reporting starter set is a subset of measures regulations. We adopted additional
In December 2002, the Secretary currently collected for the Joint requirements under the RHQDAPU
announced a partnership with several Commission as part of its hospital program in the FY 2006 IPPS final rule
collaborators intended to promote inpatient certification program. (70 FR 47420).
hospital quality improvement and We chose these 10 quality measures
public reporting of hospital quality in order to collect data that would: (1) d. Hospital Quality Data Reporting
information. These collaborators Provide useful and valid information Under Section 5001(a) of Pub. L. 109–
included the American Hospital about hospital quality to the public; (2) 171
Association (AHA), the Federation of provide hospitals with a sense of Section 5001(a) of the Deficit
American Hospitals (FAH), the predictability about public reporting Reduction Act of 2005, Pub. L. 109–171
Association of American Medical expectations; (3) begin to standardize (DRA), further amended section
Colleges (AAMC), the Joint Commission data and data collection mechanisms; 1886(b)(3)(B) of the Act to revise the
on Accreditation of Healthcare and (4) foster hospital quality mechanism used to update the
Organizations (the Joint Commission), improvement. standardized amount for payment for
the National Quality Forum (NQF), the Hospitals submit quality data through hospital inpatient operating costs.
jlentini on PROD1PC65 with PROPOSALS2
American Medical Association (AMA), the QualityNet secure Web site Specifically, sections
the Consumer-Purchaser Disclosure (formerly known as QualityNet 1886(b)(3)(B)(viii)(I) and (II) of the Act
Project, the American Association of Exchange) (www.qualitynet.org). This provide that the payment update for FY
Retired Persons (AARP), the American Web site meets or exceeds all current 2007 and each subsequent fiscal year be
Federation of Labor-Congress of Health Insurance Portability and reduced by 2.0 percentage points for any
Industrial Organizations (AFL–CIO), the Accountability Act requirements for subsection (d) hospital that does not
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23644 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
submit certain quality data in a form Sections 1886(b)(3)(B)(viii)(V) and only with respect to the fiscal year
and manner, and at a time, specified by (VI) of the Act require that, effective for involved, and will not be taken into
the Secretary. Section payments beginning with FY 2008, the account for computing the applicable
1886(b)(3)(B)(viii)(III) of the Act requires Secretary add other quality measures percentage increase for a subsequent
that the Secretary expand the ‘‘starter that reflect consensus among affected fiscal year.
set’’ of 10 quality measures that were parties, and to the extent feasible and In the FY 2007 IPPS final rule (71 FR
established by the Secretary as of practicable, have been set forth by one 48045), we amended our regulations at
November 1, 2003, as the Secretary or more national consensus building 42 CFR 412.64(d)(2) to reflect the 2.0
determines to be appropriate for the entities, and provide the Secretary with percentage point reduction in the
measurement of the quality of care the discretion to replace any quality payment update for FY 2007 and
furnished by a hospital in inpatient measures or indicators in appropriate subsequent fiscal years for subsection
settings. In expanding this set of cases, such as where all hospitals are (d) hospitals that do not comply with
measures, section 1886(b)(3)(B)(viii)(IV) effectively in compliance with a requirements for reporting quality data,
of the Act requires that, effective for measure, or the measures or indicators as provided for under section
payments beginning with FY 2007, the have been subsequently shown to not 1886(b)(3)(B)(viii) of the Act. In the FY
Secretary begin to adopt the baseline set represent the best clinical practice. 2007 IPPS final rule, we also added 11
of performance measures as set forth in Thus, the Secretary is granted broad additional quality measures to the 10-
a December 2005 report issued by the discretion to replace measures that are measure starter set to establish an
Institute of Medicine (IOM) of the no longer appropriate for the RHQDAPU expanded set of 21 quality measures (71
National Academy of Sciences under program. FR 48033 through 48037).
section 238(b) of the MMA.16 Section 1886(b)(3)(B)(viii)(VII) of the Commenters on the FY 2007 IPPS
The IOM measures include: 21 HQA Act requires that the Secretary establish proposed rule requested that we notify
quality measures (including the ‘‘starter procedures for making quality data the public as far in advance as possible
set’’ of 10 quality measures); the available to the public after ensuring of any proposed expansions of the
HCAHPS patient experience of care that a hospital would have the measure set and program procedures in
survey; and 3 structural measures. The opportunity to review its data before order to encourage broad collaboration
structural measures are: (1) these data are made public. In addition, and to give hospitals time to prepare for
Implementation of computerized this section requires that the Secretary any anticipated change. Taking these
provider order entry for prescriptions; report quality measures of process, concerns into account, in the CY 2007
(2) staffing of intensive care units with structure, outcome, patients’ perspective OPPS/ASC final rule with comment
intensivists; and (3) evidence-based of care, efficiency, and costs of care that period (71 FR 68201), we adopted six
hospital referrals. These structural relate to services furnished in inpatient additional quality measures for the FY
measures constitute the Leapfrog settings on the CMS Web site. 2008 IPPS update, for a total of 27
Group’s original ‘‘three leaps,’’ and are Section 1886(b)(3)(B)(viii)(I) of the measures. The measure set that we
part of the NQF’s 30 Safe Practices for Act also provides that any reduction in adopted for the FY 2008 payment
Better Healthcare. a hospital’s payment update will apply determination was as follows:
Pneumonia (PN) ....................................................................................... • Initial antibiotic received within 4 hours of hospital arrival *
• Oxygenation assessment.*
• Pneumococcal vaccination status.*
• Blood culture performed before first antibiotic received in hospital.**
• Adult smoking cessation advice/counseling.**
• Appropriate initial antibiotic selection.**
• Influenza vaccination status.**
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Surgical Care Improvement Project (SCIP)—named SIP for discharges • Prophylactic antibiotic received within 1 hour prior to surgical inci-
prior to July 2006 (3Q06). sion.**
• Prophylactic antibiotics discontinued within 24 hours after surgery
end time.**
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23645
Mortality Measures (Medicare patients) ................................................... • Acute Myocardial Infarction 30-day mortality Medicare patients***
• Heart Failure 30-day mortality Medicare patients.***
For FY 2008, hospitals were required • SCIP Infection 4: Cardiac Surgery further address adding additional
to submit data on 25 of the 27 measures. Patients with Controlled 6AM measures in the CY 2008 OPPS/ASC
No data submission was required for the Postoperative final rule and, if necessary, in the FY
two mortality outcome measures (30- 2009 IPPS proposed and final rules. We
Serum Glucose
Day Risk Standardized Mortality Rates also responded to comments we had
for Heart Failure and AMI), because • SCIP Infection 6: Surgery Patients received on the five proposed measures
they were calculated using existing with Appropriate Hair Removal (72 FR 47348 through 47351).
administrative Medicare claims data. • SCIP Infection 7: Colorectal Patients In the CY 2008 OPPS/ASC final rule
The measures used for the payment with Immediate Postoperative with comment period (72 FR 66875), we
determination included, for the first Normothermia noted that the NQF had endorsed the
time, the HCAHPS patient experience of following additional process measures
care survey as well as two outcome • SCIP Cardiovascular 2: Surgery that we had proposed to include in the
measures. These measures expanded the Patients on a Beta Blocker Prior to FY 2009 RHQDAPU program measure
types of measures available for public Arrival Who Received a Beta Blocker set:
reporting as required under section During the Perioperative Period • SCIP Infection 4: Cardiac Surgery
1886(b)(3)(B)(viii) of the Act. In We stated that we planned to formally Patients with Controlled 6AM
addition, the outcome measures, which adopt these measures a year in advance Postoperative
are claims-based measures, did not in order to provide time for hospitals to
prepare for changes related to the Serum Glucose
increase the data submission
requirements for hospitals, thereby RHQDAPU program. We also stated that • SCIP Infection 6: Surgery Patients
reducing the burden associated with we anticipated that the proposed with Appropriate Hair Removal
collection of data for quality reporting. measures would be endorsed by the As we stated in the FY 2008 IPPS
NQF, as a national consensus building proposed rule (72 FR 24805), these
In the FY 2008 IPPS proposed rule (72 entity. Finally, we stated that any measures reflect our continuing
FR 24805), we proposed to add 1 proposed measure that was not commitment to quality improvement in
outcome measure and 4 process endorsed by the NQF by the time that both clinical care and quality. These
measures to the existing 27-measure set we published the FY 2008 IPPS final quality measures reflect consensus
to establish a new set of 32 quality rule with comment period would not be among affected parties as demonstrated
measures to be used under the finalized in that final rule. by endorsement by a national consensus
RHQDAPU program for the FY 2009 At the time we published the FY 2008 building entity. The addition of these
IPPS annual payment determination. IPPS final rule with comment period, two measures for the FY 2009 measure
We proposed to add the following five only the PN 30-day mortality measure set bring the total number of measures
measures for the FY 2009 IPPS annual had been endorsed by the NQF. in that measure set to 30 (72 FR 66876).
payment determination: Therefore, we finalized only that The measure set to be used for FY
• PN 30-day mortality measure measure as part of the FY 2009 IPPS 2009 annual payment determination is
(Medicare patients) measure set and stated that we would as follows:
pital arrival**.
• Primary Percutaneous Coronary Intervention (PCI) received within
120 minutes of hospital arrival**.
• Adult smoking cessation advice/counseling**.
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23646 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Pneumonia (PN) ....................................................................................... • Initial antibiotic received within 4 hours of hospital arrival*.
• Oxygenation assessment*.
• Pneumococcal vaccination status*.
• Blood culture performed before first antibiotic received in hospital**.
• Adult smoking cessation advice/counseling**.
• Appropriate initial antibiotic selection**.
• Influenza vaccination status**.
Surgical Care Improvement Project (SCIP)—named SIP for discharges • Prophylactic antibiotic received within 1 hour prior to surgical
prior to July 2006 (3Q06). incision**.
• Prophylactic antibiotics discontinued within 24 hours after surgery
end time**.
• SCIP–VTE–1: Venous thromboembolism (VTE) prophylaxis ordered
for surgery patients***.
• SCIP–VTE–2: VTE prophylaxis within 24 hours pre/post surgery***.
• SCIP Infection 2: Prophylactic antibiotic selection for surgical
patients***.
• SCIP–Infection 4: Cardiac Surgery Patients with Controlled 6AM
Postoperative Serum Glucose*****.
• SCIP Infection 6: Surgery Patients with Appropriate Hair
Removal*****.
Mortality Measures (Medicare patients) ................................................... • Acute Myocardial Infarction 30-day mortality Medicare patients***.
• Heart Failure 30-day mortality Medicare patients***.
• Pneumonia 30-day mortality Medicare patients****.
We also stated in the FY 2008 IPPS by the publishing deadline for the CY specifically requested input concerning
final rule with comment period and the 2008 OPPS/ASC final rule with the following issues:
CY 2008 OPPS/ASC final rule with comment period, we did not adopt these • Which of the measures or measure
comment period that the RHQDAPU measures as part of the FY 2009 IPPS sets should be included in the FY 2009
program participation requirements for measure set. RHQDAPU program or in subsequent
the FY 2009 program would apply to In the FY 2008 IPPS proposed rule, years?
additional measures we adopt for the FY we also solicited public comments on • What challenges for data collection
2009 program (72 FR 47361; 72 FR 18 measures and 8 measure sets that and reporting are posed by the
66877). could be selected for future inclusion in identified measures and measure sets?
Therefore, hospitals are required to the RHQDAPU program (72 FR 24805). • What improvements could be made
start submitting data for SCIP Infection These measures and measure sets to data collection or reporting that might
4 and SCIP Infection 6 starting with first highlight our interest in improving offset or otherwise address those
quarter calendar year 2008 discharges patient safety and outcomes of care, challenges?
and subsequent quarters until further with a particular focus on the quality of In the FY 2008 IPPS final rule with
notice. Hospitals must submit their surgical care and patient outcomes. In comment period (72 FR 47351), after
aggregate population and sample size order to engender a broad review of consideration of the public comments
counts for Medicare and non-Medicare potential performance measures, the list received, we decided not to adopt any
patients. These requirements are included measures that have not yet of these measures or measure sets for FY
consistent with the requirements for the received endorsement by a national 2009. We indicated that we will
other AMI, HF, PN, and SCIP process consensus review process for public continue to consider some of these
measures included in the FY 2009 reporting. The list also included measures and measure sets for
measure set. The complete list of measures developed by organizations subsequent years.
procedures for participating in the other than CMS as well as measures that 2. Proposed Quality Measures for FY
RHQDAPU program for FY 2009 are can be calculated using administrative 2010 and Subsequent Years
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23647
Pneumonia, HCAHPS, and SCIP reached a high threshold (that is, The NQF updated these two measures
measures adopted for FY 2009. As noted performance on the measure has topped to reflect the most current consensus
above, the three outcome measures do out) even if the measure still reflects standards effective May 2007. Because
not require hospitals to submit data. In best practice? this was after we issued the FY 2008
addition, we are proposing to remove • Are there reasons to consider IPPS proposed rule, we could not adopt
the Pneumonia Oxygenation retiring a measure other than high the updated measures in the FY 2008
Assessment measure from the overall performance? IPPS final rule with comment period or
RHQDAPU program measure set. We are • When a measure is retired on the CY 2008 OPPS/ASC final rule with
proposing to discontinue requiring basis of substantially complete comment period. We also recognized
hospitals to submit data on the compliance by hospitals, should data that we did not have in place a
Pneumonia Oxygenation Assessment collection on the measure again be subregulatory process that would have
measure, effective with discharges required after 1 or 2 years to assure that permitted us to update the measures.
beginning January 1, 2009. Section a high compliance level remains, or Therefore, we announced that hospitals
1886(b)(3)(B)(viii)(VI) of the Act should some other way of monitoring could suppress the public reporting of
provides the Secretary with the continued hospital compliance be used? the quality data for the two measures for
discretion to replace any quality The specifications for two of the hospital discharges starting with April
measures or indicators in appropriate existing measures have been updated by 1, 2007 discharges. We did this because
cases, such as where all hospitals are the NQF, effective May 2007, with we believe that hospitals should not be
effectively in compliance with a respect to the applicable timing interval. held to out-of-date consensus standards
measure. We interpret this to authorize For the measures previously identified for public reporting pending the next
the Secretary to remove or retire as: regulatory cycle.
measures from the RHQDAPU program. • AMI—Primary Percutaneous We propose, in the future, to act on
In the case of the Pneumonia Coronary Intervention (PCI) received updates to existing RHQDAPU program
Oxygenation Assessment measure, the within 120 minutes of hospital arrival, measures made by a consensus building
vast majority of hospitals are performing the NQF has revised its endorsement of entity such as the NQF through a
near 100 percent. In addition, the specifications to reflect that the subregulatory process. This is necessary
oxygenation assessment is routinely timing interval has been changed to PCI to be able to utilize the most up-to-date
performed by hospitals for admitted within 90 minutes of arrival. consensus standards in the RHQDAPU
patients without regard to the specific • Pneumonia—Initial antibiotic program, and recognizes that neither
diagnosis. Thus, the measure is topped received within 4 hours of hospital scientific advances nor consensus
out so completely across virtually all arrival, the NQF has revised its building entity standard updates are
hospitals as to provide no significant endorsement of the specifications to linked to the timing of regulatory
opportunity for improvement. We reflect that the initial antibiotic must be actions. We propose to implement
believe that the burden to hospitals to received within 6 hours of arrival. updates to existing RHQDAPU program
abstract and report these data outweighs In the FY 2008 IPPS final rule with measures and provide notification
the benefit in publicly reporting comment period, one commenter ‘‘urged through the Qualitynet Web site, and
hospital level data with very little CMS to develop a policy to harmonize additionally in the CMS/Joint
variation among hospitals. We do not measures that related to payment, such Commission Specifications Manual for
expect that the retirement of the as the NQF’s move from a 4-hour National Hospital Inpatient Quality
Pneumonia Oxygenation Assessment timeframe for initial antibiotic Measures where data collection and
measure will result in the deterioration administration for pneumonia patients measure specifications changes are
of care. However, if we determine to a 6-hour timeframe (72 FR 47357).’’ necessary. We invite comment on this
otherwise, we may seek to reintroduce Another commenter raised the issue of proposal.
the measure. the timing for PCI in the AMI topic (72 Under section 1886(b)(3)(B)(viii)(III)
The proposed removal of the FR 47347–8). In response to these of the Act, the Secretary shall expand
Pneumonia Oxygenation Assessment comments, we responded that if we the RHQDAPU program measures
measure for FY 2010 represents the first believe that a change is an appropriate beyond the measures specified as of
instance of retiring a measure. We change for the RHQDAPU program, we November 1, 2003. Under section
intend to review other existing chart- would expect to adopt it. 1886(b)(3)(B)(viii)(V) of the Act, these
abstracted measures recognizing the Because the NQF is now endorsing measures, to the extent feasible and
significant burden to hospitals that chart different timing intervals with respect to practicable, shall include measures set
abstraction requires. In this way, we these measures, we are proposing to also forth by one or more national consensus
seek to maximize the value of the update these measures for the purposes building entities.
RHQDAPU program to promote quality of the FY 2010 RHQDAPU program. The We are proposing to add the following
improvement by hospitals and to report updated measures are as follows: 43 measures for the FY 2010 payment
information that the public will find • AMI—Timing of Receipt of Primary determination: a SCIP measure that we
beneficial in choosing inpatient hospital Percutaneous Coronary Intervention proposed last year; 4 nursing sensitive
services. We invite comment on the (PCI); and measures; 3 readmission measures; 6
retirement of the Pneumonia • Pneumonia—Timing of receipt of Venous Thromboembolism measures; 5
Oxygenation Assessment measure. In initial antibiotic following hospital stroke measures; 9 AHRQ measures; and
addition, we invite comment on other arrival. 15 cardiac surgery measures.
measures that may be suitable for We note that the technical We are proposing to add SCIP
retirement from the RHQDAPU program specifications for these measures will Cardiovascular 2, Surgery Patients on a
jlentini on PROD1PC65 with PROPOSALS2
measure set. Finally, we invite comment not change, and hospitals will continue Beta Blocker Prior to Arrival Who
on the following general considerations to submit the same data that they Received a Beta Blocker During the
relevant to retiring measures: currently submit. However, beginning Perioperative Period. This measure was
• Should CMS retire a RHQDAPU with discharges on or after January 1, initially proposed last year in the FY
program measure when hospital 2009, CMS will calculate the measures 2008 IPPS proposed rule, but because
performance on the measure has using the updated timing intervals. the NQF had not endorsed this measure
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23648 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
at the time we issued the FY 2008 IPPS measures, which may not be completed of morbidity and mortality among
final rule with comment period or the until late 2008. Therefore, it is possible hospitalized patients.
CY 2008 OPPS/ASC final rule with that the endorsement status of these • VTE–1: VTE Prophylaxis
comment period, we did not adopt it. measures may change in the next • VTE–2: VTE Prophylaxis in the ICU
For the purposes of proposing the FY several months. If this rigorous field • VTE–4: Patients with overlap in
2010 RHQDAPU program measure set, testing results in uncertainty as to the anticoagulation therapy
CMS believes that NQF endorsement of NQF endorsement status at the time we • VTE–5/6: (as combined measure)
a measure represents a standard for issue the FY 2009 IPPS final rule, we Patients with UFH dosages who have
consensus among affected parties as will defer our final decision on whether platelet count monitoring and
specified in section to require these measures for the adjustment of medication per protocol
1886(b)(3)(B)(viii)(V) of the Act. The RHQDAPU program for FY 2010 until or nomogram
NQF is an independent health care the time that we issue the CY 2009 • VTE–7: Discharge instructions to
quality endorsement organization with a OPPS/ASC final rule with comment address: follow-up monitoring,
diverse representation of consumer, period. This deferral is consistent with compliance, dietary restrictions and
purchaser, provider, academic, clinical, our measure expansion during the past adverse drug reactions/interactions
and other health care stakeholder 2 years, when we finalized some • VTE–8: Incidence of preventable
organizations. RHQDAPU program measures in the VTE
In November 2007, the NQF endorsed annual OPPS/ASC final rules. These VTE measures are pending
SCIP Cardiovascular 2. CMS believes We are proposing to adopt three NQF endorsement. The NQF
that this measure targets an important readmission measures for FY 2010 that endorsement decision on these
process of care, beta blocker will be calculated using Medicare measures is expected before we issue
administration for noncardiac surgery administrative claims data. The the FY 2009 IPPS final rule. We are
patients. Therefore, we are now proposed measures are: proposing to add these measures
proposing to add SCIP Cardiovascular 2 • Pneumonia (PN) 30-Day Risk contingent upon NQF endorsement. We
to the RHQDAPU program measures for Standardized Readmission Measure also are proposing to defer our decision
FY 2010. The specifications and data (Medicare patients) on whether to include these measures
collection tools are currently available • Heart Attack (AMI) 30-Day Risk until we issue the CY 2009 OPPS/ASC
through the Qualitynet Web site and in Standardized Readmission Measure final rule with comment period, in the
the CMS/Joint Commission (Medicare patients) event that NQF endorsement status is
Specifications Manual for National • Heart Failure (HF) 30-Day Risk still pending when we issue the FY
Hospital Inpatient Quality Measures for Standardized Readmission Measure 2009 IPPS final rule. This deferral is
hospitals to utilize and submit data for (Medicare patients) consistent with our measure expansion
this measure. We are proposing that These readmission measures assess during the past 2 years, when we
hospitals be required to submit data on both quality of care and efficiency of finalized some RHQDAPU program
this measure beginning with January 1, care. They also promote coordination of measures in the annual OPPS/ASC final
2009 discharges. care among hospitals and other rules. We are proposing that hospitals
We also are proposing to add four providers. They compliment the be required to submit data on these six
nursing sensitive measures to the existing 30-Day Risk Standardized measures effective with discharges
RHQDAPU program measure set for FY Mortality Measures for Pneumonia, beginning January 1, 2009.
2010. The four measures are: Heart Attack, and Heart Failure. These We also are proposing to add five
• Failure to Rescue measures require no additional data Stroke measures that will apply only to
• Pressure Ulcer Prevalence and collection from hospitals. The measures certain identified groups under specific
Incidence by Severity (Joint are risk adjusted to account for ICD–9–CM codes as specified in the
Commission developed measure; all differences between hospitals in the specifications manual. These measures
patient data from chart abstraction) characteristics of their patient comprehensively address an important
• Patient Falls Prevalence populations. condition not currently covered by the
• Patient Falls with Injury These three claims-based readmission RHQDAPU program that is associated
These measures broaden the ability of measures are pending NQF with significant morbidity and
the RHQDAPU program measure set to endorsement. The NQF endorsement mortality.
assess care generally associated with decision on these three measures is • STK–1 DVT Prophylaxis
nursing staff. In addition, these expected before we issue the FY 2009 • STK–2 Discharged on
measures are directed toward outcomes IPPS final rule. We are proposing to add Antithrombotic Therapy
that are underrepresented among the these three measures contingent upon • STK–3 Patients with Atrial
RHQDAPU program measures. These NQF endorsement. We are also Fibrillation Receiving Anticoagulation
measures apply to the vast majority of proposing to defer our decision on Therapy
inpatient stays and provide a great deal whether to include these measures until • STK–5 Antithrombotic Medication
of critical information about hospital we issue the CY 2009 OPPS/ASC final By End of Hospital Day Two
quality to consumers and stakeholders. rule, in the event that NQF endorsement • STK–7 Dysphasia Screening
The specifications and data collection status is still pending when we issue the These Stroke measures are pending
tools are scheduled to be available in FY 2009 IPPS final rule. This deferral is NQF endorsement. The NQF
the specifications manual by December consistent with our measure expansion endorsement decision on these
2008 for hospitals to utilize and submit during the past 2 years, when we measures is expected before we issue
data for these measures. We are finalized some RHQDAPU program the FY 2009 IPPS final rule. We are
jlentini on PROD1PC65 with PROPOSALS2
proposing that hospitals be required to measures in the annual OPPS/ASC final proposing to add these measures
submit data on these four measures rules. contingent upon NQF endorsement. We
effective with discharges beginning We are also proposing to add six also are proposing to defer our adoption
April 1, 2009. While these measures are Venous Thromboembolism (VTE) of these measures until we issue the CY
endorsed by NQF, the Joint Commission measures. These measures 2009 OPPS/ASC final rule with
has initiated rigorous field testing of the comprehensively address a major cause comment period in the event that NQF
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23649
endorsement status is still pending as of submitting data on a quarterly basis on the STS registry for discharges on or
the time we issue the FY 2009 IPPS final these measures to CMS by April 1, 2010 after January 1, 2009, would need to
rule. This approach is consistent with beginning with October 1, 2009 submit such data to CMS. Although we
our measure expansion during the past discharges. would accept cardiac surgery data from
2 years, when CMS finalized some However, we are aware that a large other clinical data registries, we are
RHQDAPU program measures in the number of hospitals already submit unaware of any other registries that
annual OPPS/ASC final rules. We are these data on a voluntary basis to third collect all of the data necessary to
proposing that hospitals be required to party data aggregators such as State support calculation of the proposed
submit data on these five measures health agencies or State hospital cardiac surgery measures. Hospitals and
effective with discharges beginning July associations. We seek comments on CMS would need to establish
1, 2009. whether a hospital that already submits appropriate legal arrangements, to the
We also are proposing to add the the data necessary to calculate these extent such arrangements are necessary,
following nine AHRQ Patient Safety measures to such entities should be to ensure that the transfer of these data
Indicators (PSI) and Inpatient Quality permitted to authorize such an entity to from the STS registry to CMS complies
Indicators (IQI) that have been endorsed transmit these data to CMS, in with all applicable laws. By accepting
by the NQF: accordance with applicable these registry-based data, only those
• Patient Safety Indicator (PSI) 4— confidentiality laws, on their behalf. hospitals with cardiac surgery programs
Death among surgical patients with This would relieve the hospital of the that do not already collect such data to
treatable serious complications burden of having to submit the same submit to the STS registry will have any
• PSI 6—Iatrogenic pneumothorax, data directly to CMS via the QIO additional data submission burden. All
adult Clinical Warehouse. of the proposed measures are currently
• PSI 14—Postoperative wound As an alternative to requiring that NQF-endorsed. We are proposing that
dehiscence hospitals submit all-payer claims data hospitals begin submitting data by July
• PSI 15—Accidental puncture or 1, 2009, on a quarterly basis on the
for purposes of calculating the AHRQ
laceration following 15 cardiac surgery measures
• Inpatient Quality Indicator (IQI) 4 PSI/IQI measures, CMS is considering
whether it should initially calculate the to the STS data registry or CMS for 1st
and 11—Abdominal aortic aneurysm
AHRQ PSI/IQI measures using Medicare quarter calendar year 2009 discharges:
(AAA) mortality rate (with or without
volume) claims data only, and at a subsequent • Participation in a Systematic
• IQI 19—Hip fracture morality rate date require submission of all-payer Database for Cardiac Surgery
• IQI Mortality for selected medical claims data. We also seek comment on • Pre-Operative Beta Blockade
conditions (composite) this alternative. • Prolonged Intubation
• IQI Mortality for selected surgical We also are proposing to add 15 • Deep Sternal Wound Infection Rate
procedures (composite) cardiac surgery measures. Cardiac • Stroke/CVA
• IQI Complication/patient safety for surgical procedures carry a significant • Post-Operative Renal Insufficiency
selected indicators (composite) risk of morbidity and mortality. We • Surgical Reexploration
These are claims-based outcome believe that the nationwide public
• Anti-Platelet Medication at
measures. They are important additional reporting of these cardiac surgery
Discharge
measures that can be calculated for measures would provide highly
• Beta Blockade Therapy at Discharge
hospital inpatients without the burden meaningful information for the public.
of additional chart abstraction. Currently, over 85 percent of hospitals • Anti-Lipid Treatment at Discharge
Hospitals currently collect and submit with a cardiac surgery program submit • Risk-Adjusted Operative Mortality
these data to CMS and other insurers for data on the proposed cardiac surgery for CABG
reimbursement. These measures will be measures listed below to the Society of • Risk-Adjusted Operative Mortality
calculated using all-payer claims data Thoracic Surgeons (STS) Cardiac for Aortic Valve Replacement
that hospitals currently collect with Surgery Clinical Data Registry. We are • Risk-Adjusted Operative Mortality
respect to each patient discharge. We proposing to accept these data from the for Mitral Valve Replacement/Repair
are proposing to require hospitals to STS registry beginning on July 1, 2009, • Risk-Adjusted Mortality for Mitral
submit to CMS the all-payer claims data on a quarterly basis for discharges on or Valve Replacement and CABG Surgery
that we specify in the technical after January 1, 2009. Hospitals that • Risk-Adjusted Mortality for Aortic
specifications manual as necessary to participate in the RHQDAPU program, Valve Replacement and CABG Surgery
calculate the AHRQ PSI/IQI measures. but that do not submit data on the The following table lists the 72
We are proposing that hospitals begin proposed cardiac surgery measures to proposed measures for FY 2010:
of hospital arrival**.
• AMI–4 Adult smoking cessation advice/counseling**.
• AMI–8a Timing of Receipt of Primary Percutaneous Coronary Inter-
vention (PCI).
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23650 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Surgical Care Improvement Project (SCIP)—named SIP for discharges • SCIP–1 Prophylactic antibiotic received within 1 hour prior to surgical
prior to July 2006 (3Q06). incision**.
• SCIP–3 Prophylactic antibiotics discontinued within 24 hours after
surgery end time**.
• SCIP–VTE–1: Venous thromboembolism (VTE) prophylaxis ordered
for surgery patients***.
• SCIP–VTE–2: VTE prophylaxis within 24 hours pre/post surgery***.
• SCIP Infection 2: Prophylactic antibiotic selection for surgical
patients***.
• SCIP–Infection 4: Cardiac Surgery Patients with Controlled 6AM
Postoperative Serum Glucose*****.
• SCIP Infection 6: Surgery Patients with Appropriate Hair
Removal*****.
• SCIP Cardiovascular 2: Surgery Patients on a Beta Blocker Prior to
Arrival Who Received a Beta Blocker During the Perioperative
Period******.
Mortality Measures (Medicare patients) ................................................... • MORT–30–AMI Acute Myocardial Infarction 30-day mortality Medi-
care patients***.
• MORT–30–HF Heart Failure 30-day mortality Medicare patients***.
• MORT–30–PN Pneumonia 30-day mortality Medicare patients****.
Readmission Measures (Medicare patients) ............................................ • Heart Attack (AMI) 30-Day Risk Standardized Readmission Measure
(Medicare patients)******.
• Heart Failure (HF) 30-Day Risk Standardized Readmission Measure
(Medicare patients)******.
• Pneumonia (PN) 30-Day Risk Standardized Readmission Measure
(Medicare patients) ******.
AHRQ Patient Safety Indicators ............................................................... • Death among surgical patients with treatable serious
complications******.
• Iatrogenic pneumothorax, adult******.
• Postoperative wound dehiscence******.
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AHRQ Inpatient Quality Indicators (IQI) ................................................... • Abdominal aortic aneurysm (AAA) mortality rate (with or without vol-
ume) ******.
• Hip fracture morality rate******.
AHRQ IQI Composite Measures .............................................................. • Mortality for selected surgical procedures (composite) ******.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23651
Cardiac Surgery Measures ....................................................................... • Participation in a Systematic Database for Cardiac Surgery ******.
• Pre-operative Beta Blockade******.
• Prolonged Intubation******.
• Deep Sternal Wound Infection Rate******.
• Stroke/CVA******.
• Postoperative Renal Insufficiency******.
• Surgical Reexploration******.
• Anti-platelet Medication at Discharge******.
• Beta Blockade Therapy at Discharge******.
• Anti-lipid Treatment at Discharge******.
• Risk-Adjusted Operative Mortality for CABG******.
• Risk-Adjusted Operative Mortality for Aortic Valve Replacement******.
• Risk-Adjusted Operative Mortality for Mitral Valve Replacement/
Repair******.
• Risk-Adjusted Mortality for Mitral Valve Replacement and CABG
Surgery******.
• Risk-Adjusted Mortality for Aortic Valve Replacement and CABG
Surgery ******.
*Measure included in 10 measure starter set.
**Measure included in 21 measure expanded set.
***Measure added in CY 2007 OPPS/ASC final rule with comment period.
****Measure added in FY 2008 IPPS final rule with comment period.
*****Measure added in CY 2008 OPPS/ASC final rule with comment period.
******Measure proposed in FY 2009 IPPS proposed rule.
In summary, we are proposing to to a total of 72 measures for FY 2010. the RHQDAPU program measure set
increase the RHQDAPU program The following table lists the increase in since the program’s inception:
measures from 30 measures for FY 2009
Number of
RHQDAPU
IPPS payment year program Topics covered
quality
measures
The above measures reflect our We intend to finalize the FY 2010 b. Possible New Quality Measures,
continuing commitment to quality RHQDAPU program measure set in the Measure Sets, and Program
improvement in both clinical care and FY 2009 IPPS final rule, contingent on Requirements for FY 2011 and
patient safety. These additional the endorsement status of the proposed Subsequent Years
measures also demonstrate our measures. However, to the extent that a The following table contains a list of
commitment to include in the measure has not received NQF 59 measures and 4 measure sets from
RHQDAPU program only those quality endorsement by the time we issue the which additional quality measures
measures that reflect consensus among FY 2009 IPPS final rule, we intend to could be selected for inclusion in the
the affected parties and that have been finalize that measure for the FY 2010 RHQDAPU program. It includes
reviewed by a consensus building RHQDAPU program measure set in the measures and measure sets that
process. CY 2009 OPPS/ASC final rule with highlight CMS’ interest in improving
jlentini on PROD1PC65 with PROPOSALS2
To the extent that the proposed comment period if the measure is patient safety and outcomes of care,
measures have not already been endorsed prior to the time we issue the with a particular focus on the quality of
endorsed by a consensus building entity CY–2009–OPPS/ASC final rule with surgical care and patient outcomes. In
such as the NQF, we anticipate that they comment period. We are requesting order to engender a broad review of
will be endorsed prior to the time that public comment on these measures. potential performance measures, the list
we issue the FY 2009 IPPS final rule. includes measures that have not yet
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23652 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
been considered for approval by the We are seeking public comment on • What challenges for data collection
HQA or endorsed by a consensus review the measures and measure sets that are and reporting are posed by the
process such as the NQF. It also listed as well as any critical gaps or identified measures and measure sets?
includes measures developed by missing measures or measure sets. We What improvements could be made to
organizations other than CMS as well as specifically request input concerning data collection or reporting that might
measures that are to be derived from the following: offset or otherwise address those
administrative data (such as claims) that challenges?
• Which of the measures or measure
may need to be modified for specific use We are soliciting public comment on
by the Medicare program if sets should be included in the the following measure sets for
implemented under the RHQDAPU RHQDAPU program for FY 2011 or in consideration in FY 2011 and
program. subsequent years? subsequent years:
POSSIBLE MEASURES AND MEASURE SETS FOR THE RHQDAPU PROGRAM FOR FY 2011 AND SUBSEQUENT YEARS
Topic Quality measure
Surgical Care Improvement Project (SCIP)—named SIP for discharges SCIP Infection 8—Short Half-life Prophylactic Administered Pre-
prior to July 2006 (3Q06). operatively Redosed Within 4 Hours After Preoperative Dose.
SCIP Cardiovascular 3—Surgery Patients on a Beta Blocker Prior to
Arrival Receiving a Beta Blocker on Postoperative Days 1 and 2.
Hospital Inpatient Cancer Care Measures ............................................... Patients with early stage breast cancer who have evaluation of the
axilla.
College of American Pathologists breast cancer protocol.
Surgical resection includes at least 12 nodes.
College of American Pathologists Colon and rectum protocol.
Completeness of pathologic reporting.
Serious Reportable Events in Healthcare (‘‘Never Events’’) ................... Surgery performed on the wrong body part.
Surgery performed on the wrong patient.
Wrong surgical procedure on a patient.
Retention of a foreign object in a patient after surgery or other proce-
dure.
Intraoperative or immediately post-operative death in a normal health
patient (defined as a Class 1 patient for purposes of the American
Society of Anesthesiologists patient safety initiative).
Patient death or serious disability associated with the use of contami-
nated drugs, devices, or biologics provided by the healthcare facility.
Patient death or serious disability associated with the use or function of
a device in patient care in which the device is used or functions
other than as intended.
Patient death or serious disability associated with intravascular air em-
bolism that occurs while being cared for in a healthcare facility.
Patient death or serious disability associated with patient elopement
(disappearance) for more than four hours.
Patient suicide, or attempted suicide resulting in serious disability,
while being cared for in a healthcare facility.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23653
POSSIBLE MEASURES AND MEASURE SETS FOR THE RHQDAPU PROGRAM FOR FY 2011 AND SUBSEQUENT YEARS—
Continued
Topic Quality measure
c. Considerations in Expanding and abstraction and surveying patients and based on alternative sources of data that
Updating Quality Measures Under the submission of detailed data elements. do not require chart abstraction or that
RHQDAPU Program In looking forward to further utilize data already being broadly
expansion of the RHQDAPU program, reported by hospitals, such as clinical
The RHQDAPU program has
we believe it is important to take several data registries or all-payer claims data
significantly expanded from an initial
goals into consideration. These include: bases; and (f) weighing the
set of 10 measures to 30 measures for
the FY 2009 payment determination. (a) Expanding the types of measures meaningfulness and utility of the
Initially, the conditions covered by the beyond process of care measures to measures compared to the burden on
RHQDAPU program measures were include an increased number of hospitals in submitting data under the
limited to Acute Myocardial Infarction, outcome measures, efficiency measures, RHQDAPU program.
Heart Failure, and Pneumonia, three and experience-of-care measures; (b) We request comments on how to
high-cost and high-volume conditions. expanding the scope of hospital services reduce burden on the hospitals
In expanding the process measures, to which the measures apply; (c) participating in the RHQDAPU program.
Surgical Infection Prevention was the considering the burden on hospitals in We realize that our proposal to expand
jlentini on PROD1PC65 with PROPOSALS2
first additional focus, now collecting chart-abstracted data; (d) the RHQDAPU program measure set
supplemented by the two Venous harmonizing the measures used in the from submission of 30 measures in FY
Thromboembolism SCIP measures SCIP RHQDAPU program with other CMS 2009 to 72 measures in FY 2010 is
VTE–1 and SCIP VTE–2 for surgical quality programs to align incentives and potentially burdensome. However, to
patients. Of the 30 current measures, 27 promote coordinated efforts to improve minimize hospitals’ burden, the
require data collection from chart quality; (e) seeking to use measures proposed expansion uses many existing
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23654 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
data sources, including Medicare claims common and high-cost conditions that infection prevention for outpatient
and registry data. We also request affect Medicare beneficiaries. In the surgery.
comment about which measures would proposed FY 2010 measure set,
(5) Using Alternative Data Sources Not
be most useful while minimizing measures have been expanded to
Requiring Chart Abstraction
burden. comprehensively address services
related to preventing Venous We are actively pursuing alternative
(1) Expanding the Types of Measures data sources, including data sources that
Thromboembolism, treatment of stroke,
Section 1886(b)(3)(B)(viii)(III) of the and nursing services. are electronically maintained.
Act requires the Secretary to add other Alternative data submission
quality measures that the Secretary (3) Considering the Burden on Hospitals methodologies that we are proposing in
determines to be appropriate for the in Collecting Chart-Abstracted Data for this rule include:
measurement of the quality of care Measures • Use of registry-collected clinical
furnished by hospitals in inpatient Although we are proposing to add data for which there is broad existing
settings. We intend to expand outcome additional chart-abstracted measures for hospital participation as previously
measures such as mortality measures FY 2010, we also are proposing to described with the STS registry.
and measures of complications. For FY stagger the dates for which data • Use of data collected by State data
2010, the proposed measure set collection for these measures must organizations, State hospital
includes: begin, which we believe will lessen the associations, Federal entities such as
• Patient Experience of Care. burden on hospitals as they incorporate AHRQ, and/or other data warehouses.
HCAHPS collects data regarding a these new measures into their systems. In addition, we are considering
patient’s experience of care in the We also intend to work to simplify the adopting the following methods of data
hospital and provides a very meaningful data abstraction specifications that add collection in the future and request
perspective from the patient standpoint. to the burden of data collection. comments on these methods:
• Efficiency. Efficiency is a Quality • Use of the CMS Continuity
Domain, as defined by the IOM, that (4) Harmonizing With Other CMS Assessment Record & Evaluation
relates Quality and Cost. The three Programs (CARE) tool, a standardized data
proposed readmission measures address We intend to harmonize measures collection instrument, which would
hospital efficiency. These are across settings and other CMS programs allow data to be transmitted in ‘‘real
considered efficiency measures because as evidenced by the implementation of time.’’ This recently developed,
higher hospital readmission rates are the readmission measures not only for Internet-based, quality data collection
linked to higher costs and also to lower the RHQDAPU program but also for the tool was developed as a part of the Post
quality of care received during QIOs’ 9th Scope of Work (SOW) Patient Acute Care Reform Demonstration
hospitalization and after the initial Pathways/Care Transitions Theme, Program mandated by section 5008 of
hospital stay. We are also seeking which also uses the 30-Day Readmission the DRA. The CARE tool consists of a
additional ways in which to address Measures and will provide assistance to core set of assessment items, common to
efficiency. engage hospitals in improving care. The all patients and all care settings
• Outcomes. The three 30-day 9th SOW also focuses on disparities in (meeting criteria of being predictive of
mortality measures, the STS cardiac health care, which is another important cost, utilization, outcomes, among
surgery measures, the AHRQ PSI/IQI area of interest for CMS. We plan to others), organized under five major
measures, and the four outcome-related analyze current RHQDAPU measures to domains: Medical, Functional, Social,
nursing sensitive measures represent identify particular RHQDAPU program Environmental, and Cognitive—
significant expansion of the RHQDAPU measures needed to evaluate the Continuity of Care. The Internet-based
program outcome measures. Additional existence of health care disparities, to CARE tool will communicate critical
outcome measures are provided in the require data elements that would information across settings accurately,
list under consideration for inclusion in support better identification of health quickly, and efficiently with reduced
the RHQDAPU program for FY 2010 and care disparities, and to find more time burden to providers and is
beyond. efficient ways to ascertain this intended to enhance beneficiaries’ safe
information from claims data. In transitions between settings to prevent
(2) Expanding the Scope of Hospital addition, at least some of the CY 2008 avoidable, costly events such as
Services To Which Measures Apply Physician Quality Reporting Initiative unnecessary rehospitalizations or
Many of the most common and high- (PQRI) measures align with the current medication errors. We believe that the
cost Medicare DRGs were posted on the RHQDAPU program AMI and SCIP CARE tool may provide a vehicle for
Hospital Compare Web site in March measures reported starting with the FY collection of data elements to be used
2008 as part of the President’s 2007 RHQDAPU measure set. In other for calculating RHQDAPU program
transparency initiative. We have words, there are financial incentives quality measures. CMS is considering
assessed these DRGs and have found that cover the same clinical processes of utilizing the CARE tool in this manner.
that the FY 2009 RHQDAPU program care across different providers and The Care tool is available at:
measure set does not capture data settings. For example, Aspirin for Heart www.cms.hhs.gov/PaperworkReduction
regarding care in important areas such Attack corresponds to PQRI measure Actof1995/PRAL/list.asp#TopOfPage.
as Inpatient Diabetes Care, Chronic number 28, and Surgical Infection (Viewers should select ‘‘Show only
Obstructive Pulmonary Disease (COPD), Antibiotic Timing corresponds to PQRI items with the word ‘‘10243’’, click on
and Chest Pain. These are areas for measure number 20. Outpatient quality show items, select CMS–10243, click on
which we currently do not have quality measures under the Hospital Outpatient downloads, and open Appendices A &
jlentini on PROD1PC65 with PROPOSALS2
measures but which constitute a Data Quality Data Reporting Program B, pdf files.)
significant portion of the top paying (HOP QDRP) are also aligned with the We are particularly interested in
DRGs for Medicare beneficiaries. We RHQDAPU program measures. For receiving public comment on this tool.
intend to develop measures in these example, the HOP QDRP addresses Our goal is to have a standardized,
areas in order to provide additional Acute Myocardial Infarction treatment efficient, effective, interoperable,
quality information on the most for transferred patients and surgical common assessment tool to capture key
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23655
patient characteristics that will help 3. Form and Manner and Timing of QualityNet Web site contains all of the
CMS capture information related to Quality Data Submission forms to be completed by hospitals
resource utilization; expected costs as In the FY 2007 IPPS final rule (71 FR participating in the RHQDAPU program.
well as clinical outcomes; and post- 48031 through 48045), we set out Under these requirements hospitals
discharge disposition. The CARE tool RHQDAPU program procedures for data must—
will also be useful for guiding payment • Register with QualityNet, before
submission, program withdrawal, data
and quality policies. participating hospitals initially begin
validation, attestation, public display of
Specifically, we are interested in reporting data, regardless of the method
hospitals’’ quality data, and
receiving public comments on how used for submitting data.
reconsiderations. Section › Identify a QualityNet
CARE might advance the use of health 1886(b)(3)(B)(viii)(I) of the Act requires Administrator who follows the
information technology in automating that subsection (d) hospitals submit data registration process located on the
the process for collecting and on measures selected under that clause QualityNet Web site
submitting quality data. with respect to the applicable fiscal (www.qualitynet.org).
• Submission of data derived from year. In addition, section › Complete the revised RHQDAPU
electronic versions of laboratory test 1886(b)(3)(B)(viii)(II) of the Act requires program Notice of Participation form
reports that are issued by the laboratory that each subsection (d) hospital submit (only for hospitals that did not submit
in accordance with CLIA to the ordering data on measures selected under that a form prior to August 15, 2007). For
provider and maintained by the hospital clause to the Secretary in a form and hospitals that share the same Medicare
as part of the patient’s medical record manner, and at a time, specified by the Provider Number (now CMS
during and after the patient’s course of Secretary. The technical specifications Certification Number (CCN)), report the
treatment at the hospital. We are for each RHQDAPU program measure name and address of each hospital on
considering using these data to support are listed in the CMS/Joint Commission this form.
risk adjustment for claims-based Specifications Manual for National › Collect and report data for each of
outcome measures (for example, Inpatient Hospital Quality Measures the required measures except the
mortality measures) and to develop (Specifications Manual). We update this Medicare mortality measures (AMI, HF,
other outcomes measures. This would manual semiannually or more and PN 30-day Mortality for Medicare
support use of electronically maintained frequently in unusual cases, and include Patients). Hospitals must continuously
data and our goal of reducing manual detailed instructions and calculation report these data. Hospitals must submit
data collection burden on hospitals. algorithms for hospitals to collect and the data to the QIO Clinical Warehouse
• Submission of data currently being submit the data for the required using the CMS Abstraction & Reporting
collected by clinical data registries in measures. Tool (CART), The Joint Commission
addition to the STS registry. This would The maintenance of the specifications ORYX Core Measures Performance
support and leverage existing clinical for the measures selected by the Measurement System, or another third-
data registries and existing voluntary Secretary occurs through publication of party vendor tool that has met the
clinical data collection efforts, such as: the Specifications Manual. Thus, measurement specification requirements
measure selection by the Secretary
• American College of Cardiology occurs through the rulemaking process;
for data transmission to QualityNet. All
(ACC) data registry for Cardiac submissions will be executed through
whereas the maintenance of the QualityNet. Because the information in
Measures. technical specifications for the selected
• ACC data registry for ICD. the QIO Clinical Warehouse is
measures occurs through a considered QIO information, it is
• ACC data registry for Carotid Stents. subregulatory process so as to best subject to the stringent QIO
• Vascular Surgery Registry for maintain the specifications consistent confidentiality regulations in 42 CFR
Vascular Surgical Procedures. with current science and consensus. Part 480. The QIO Clinical Warehouse
• ACC-sponsored ‘‘Get with the The data submission, Specifications will submit the data to CMS on behalf
Guidelines’’ registry for Stroke Care. Manual, and submission deadlines are of the hospitals.
posted on the QualityNet Web site at • Submit complete data regarding the
(6) Weighing the Meaningfulness and www.qualitynet.org. We require that
Utility of the Measures Compared to the quality measures in accordance with the
hospitals submit data in accordance joint CMS/Joint Commission sampling
Burden on Hospitals in Submitting Data with the specifications for the
Under the RHQDAPU Program requirements located on the QualityNet
appropriate discharge periods. When Web site for each quality measure that
We are proposing to retire one measure specifications are updated, we requires hospitals to collect and report
measure from the RHQDAPU program are proposing to require that hospitals data. These requirements specify that
for FY 2010 because we have submit all of the data required to hospitals must submit a random sample
determined that the burden on hospitals calculate the required measures as or complete population of cases for each
in abstracting the data outweighs the outlined in the Specifications Manual of the topics covered by the quality
meaningful benefit that we can ascertain current as of the patient discharge date. measures. Hospitals must meet the
from the measure. As we explained 4. Current and Proposed RHQDAPU sampling requirements for these quality
more fully above, we are seeking Program Procedures measures for discharges in each quarter.
comments on the applicability to the • Submit to CMS on a quarterly basis
RHQDAPU program of criteria currently a. RHQDAPU Program Procedures for aggregate population and sample size
described in the Hospital VBP Issues FY 2009 counts for Medicare and non-Medicare
Paper for inclusion and retirement of In the FY 2008 IPPS final rule with discharges for the four topic areas (AMI,
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measures. The Hospital VBP Issues comment period, we stated that the HF, PN, and SCIP).
Paper is located on the CMS Web site at requirements for FY 2008 would • Continuously collect and submit
the following location: http:// continue to apply for FY 2009 (72 FR HCAHPS data in accordance with the
www.cms.hhs.gov/AcuteInpatientPPS/ 47361). The ‘‘Reporting Hospital Quality HCAHPS Quality Assurance Guidelines,
downloads/hospital_VBP_plan_issues_ Data for Annual Payment Update Version 3.0, located at the Web site:
paper.pdf. Reference Checklist’’ section of the www.hcahpsonline.org. The QIO
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23656 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Clinical Warehouse has been modified hospital must still submit its total approximately 15 days before the data
to accept zero HCAHPS-eligible number of HCAHPS-eligible cases for submission deadline for the clinical
discharges. We remind the public to that month as part of its quarterly process measures, and we are proposing
refer to the QualityNet Web site for any HCAHPS data submission. We are it so that we can inform hospitals about
questions about how to submit ‘‘zero proposing to begin implementing this their data submission status for the
cases’’ information. requirement with discharges on or after quarter before the 4.5 month clinical
For the AMI 30-day, HF 30-day, and January 1, 2009. process measure deadline. We have
PN 30-day mortality measures, CMS › HF. We are proposing that a found from past experience that
uses Part A and Part B claims for hospital that has five or fewer HF hospitals need sufficient time to submit
Medicare fee-for-service patients to discharges (both Medicare and non- additional data when their counts differ
calculate the mortality measures. For FY Medicare combined) in a quarter will from Medicare claims counts generated
2009, hospital inpatient claims (Part A) not be required to submit HF patient by CMS. We will provide hospitals with
from July 1, 2006 to June 30, 2007, will level data for that quarter. However, the these Medicare claims counts and
be used to identify the relevant patients hospital must still submit its aggregate submitted patient level data counts on
and the index hospitalizations. Inpatient HF population and sample size counts the QualityNet Web site approximately
claims for the index hospitalizations to CMS for that quarter as part of its 2 weeks before the quarterly submission
and Part A and Part B claims for all quarterly RHQDAPU data submission. deadline. We plan to use the aggregate
inpatient, outpatient, and physician We are proposing to begin population and sample size data to
services received one year prior to the implementing this requirement with assess submission completeness and
index hospitalizations are used to discharges on or after January 1, 2009. adherence to sampling requirements for
determine patient comorbidity, which is › PN. We are proposing that a Medicare and non-Medicare patients.
used in the risk adjustment calculation hospital that has five or fewer PN We propose the following quarterly
(see the Web site: www.qualitynet.org/ discharges (both Medicare and non- deadlines for hospitals to submit cardiac
dcs/ContentServer?cid=1163010398556 Medicare combined) in a quarter will surgery and the AHRQ PSI/IQI measure
&pagename=QnetPublic%2FPage%2F not be required to submit PN patient data to CMS or other entities:
QnetTier2&c=Page). No other hospital level data for that quarter. However, the • The data submission deadline for
data submission is required to calculate hospital must still submit its aggregate hospitals to submit cardiac surgery
the mortality rates. PN population and sample size counts patient level measure data to CMS or
to CMS for that quarter as part of its STS data registry for 1st calendar
b. Proposed RHQDAPU Program quarterly RHQDAPU data submission.
Procedures for FY 2010 quarter of 2009 discharges would be
We are proposing to begin June 1, 2009. Data must be submitted for
We are proposing to continue implementing this requirement with each of these measures 2 months after
requiring the FY 2009 RHQDAPU discharges on or after January 1, 2009. the end of the preceding quarter. The
program procedures for FY 2010 for › SCIP. We are proposing that a
specific deadlines will be listed on the
hospitals participating in the RHQDAPU hospital that has five or fewer SCIP
QualityNet Web site.
program, with the following discharges (both Medicare and non-
• The data submission deadline for
modifications: Medicare combined) in a quarter will
hospitals to submit the AHRQ PSI/IQI
• Notice of Participation. New not be required to submit SCIP patient
measure data to CMS for 4th calendar
subsection (d) hospitals and existing level data for that quarter. However, the
quarter of 2009 discharges would be
hospitals that wish to participate in hospital must still submit its aggregate
April 1, 2010. Data must be submitted
RHQDAPU for the first time must SCIP population and sample size counts
for each of these measures 3 months
complete a revised ‘‘Reporting Hospital to CMS for that quarter as part of its
after the end of the preceding quarter.
Quality Data for Annual Payment quarterly RHQDAPU data submission.
The specific deadlines will be listed on
Update Notice of Participation’’ that We are proposing to begin
the QualityNet Web site.
includes the name and address of each implementing this requirement with
We are proposing these quarterly
hospital that shares the same CCN. discharges on or after January 1, 2009.
• Data Submission. In order to reduce In addition, we are proposing the submission deadlines for cardiac
the burden on hospitals that treat a low following quarterly deadlines for surgery and AHRQ PSI/IQI measure data
number of patients who are covered by hospitals to submit the FY 2010 AMI, to coordinate submission deadlines with
the submission requirements, we are HF, SCIP, PN, Stroke, VTE, and nursing external data registries and provide
proposing the following: sensitive measure data: more timely information to the
› AMI. We are proposing that a • The data submission deadline for consumers. We are proposing this
hospital that has five or fewer AMI hospitals to submit the patient level quarterly submission deadline for
discharges (both Medicare and non- measure data for 1st calendar quarter of cardiac surgery measure data to
Medicare combined) in a quarter will 2009 discharges would be August 15, coincide with the STS quarterly
not be required to submit AMI patient 2009. Data must be submitted for each submission deadline that is
level data for that quarter. We are of these measures 4.5 months after the approximately 2 months following the
proposing to begin implementing this end of the preceding quarter. The discharge quarter. We also propose to
requirement with discharges on or after specific deadlines will be listed on the shorten the time lag between the date of
January 1, 2009. However, the hospital QualityNet Web site. discharge and the public reporting of
must still submit its aggregate AMI • Even though data on applicable these quality measures to provide more
population and sample size counts to measures will not be due until 4.5 timely consumer information.
CMS for that quarter as part of its months after the end of the preceding 5. Current and Proposed HCAHPS
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quarterly RHQDAPU data submission. quarter, hospitals must submit their Requirements
› HCAHPS. We are proposing that a aggregate population and sample size
hospital that has five or fewer HCAHPS- counts no later than 4 months after the a. FY 2009 HCAHPS Requirements
eligible discharges in any month will end of the preceding quarter (the exact For FY 2009, hospitals must
not be required to submit HCAHPS dates will be posted on the QualityNet continuously collect and submit
surveys for that month. However, the Web site). This deadline falls HCAHPS data to the QIO Clinical
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23657
Warehouse by the data submission and data preparation and submission meet the chart validation requirements
deadlines posted on the Web site at: procedures. that we implemented in the FY 2006
www.hcahpsonline.org. The data IPPS final rule (70 FR 47421 and 47422).
b. Proposed FY 2010 HCAHPS
submission deadline for first quarter CY These requirements, as well as
Requirements
2008 (January through March) additional information on validation
discharges is July 9, 2008. To collect For FY 2010, we are proposing requirements, continue and are being
HCAHPS data, a hospital can either continuous collection of HCAHPS in placed on the QualityNet Web site.
contract with an approved HCAHPS accordance with the Quality Assurance We also stated in the FY 2008 IPPS
survey vendor that will conduct the Guidelines located at the Web site: final rule with comment period that,
survey and submit data on the hospital’s www.hcahpsonline.org, by the quarterly until further notice, hospitals must pass
behalf to the QIO Clinical Warehouse, or data submission deadlines posted on the our validation requirement that requires
a hospital can self-administer the survey Web site: www.hcahpsonline.org. As a minimum of 80-percent reliability,
without using a survey vendor, stated above, starting with January 1, based upon our chart-audit validation
provided that the hospital meets 2009 discharges, we are proposing that process (72 FR 47361).
Minimum Survey Requirements as hospitals that have five or fewer In the FY 2008 IPPS final rule with
specified on the Web site at: HCAHPS-eligible discharges in a month comment period (72 FR 47362), we
www.hcahpsonline.org. A current list of would not be required to submit indicated that, for the FY 2009 update,
approved HCAHPS survey vendors can HCAHPS patient-level data for that all FY 2008 validation requirements
be found on the Web site at: month as part of the quarterly data would apply, except for the following
www.hcahpsonline.org. submission that includes that month, modifications. We would modify the
Every hospital choosing to contract but they would still be required to validation requirement to pool the
with a survey vendor should provide submit the number of HCAHPS-eligible quarterly validation estimates for 4th
the sample frame of hospital-eligible cases for that month as part of their quarter CY 2006 through 3rd quarter
discharges to its survey vendor with HCAHPS quarterly data submission. 2007 discharges. We would also expand
sufficient time to allow the survey With respect to HCAHPS oversight, the list of validated measures in the FY
vendor to begin contacting each we are proposing that the HCAHPS 2009 update to add SCIP Infection-2,
sampled patient within 6 weeks of Project Team will continue to conduct SCIP VTE–1, and SCIP VTE–2 (starting
discharge from the hospital (see the site visits and/or conference calls with with 4th quarter CY 2006 discharges).
Quality Assurance Guidelines for details hospitals/survey vendors to ensure the We would also drop the current two-
about HCAHPS eligibility and sample hospital’s compliance with the HCAHPS step process to determine if the hospital
frame creation) and must authorize the requirements. During the onsite visit or is submitting validated data. For the FY
survey vendor to submit data via conference call, the HCAHPS Project 2009 update, we stated that we will pool
QualityNet on the hospital’s behalf. Team will review the hospital’s/survey validation estimates covering the four
CMS strongly recommends that the vendor’s survey systems and will assess quarters (4th quarter CY 2006 discharges
hospitals employing a survey vendor protocols based upon the most recent through 3rd quarter 2007 discharges) in
promptly review the two HCAHPS Quality Assurance Guidelines. All a similar manner to the current 3rd
Feedback Reports (the Provider Survey materials relevant to survey quarter pooled confidence interval.
Status Summary Report and the Data administration will be subject to review. In summary, the following chart
Submission Detail Report) that are The systems and program review validation requirements apply for the
available after the survey vendor includes, but it is not necessarily FY 2009 RHQDAPU program:
limited to: (a) survey management and • The 21-measure expanded set will
submits the data to the QIO Clinical
data systems; (b) printing and mailing be validated using 4th quarter CY 2006
Warehouse. These reports enable a
materials and facilities; (c) telephone/ (4Q06) through 3rd quarter CY 2007
hospital to ensure that its survey vendor
IVR materials and facilities; (d) data (3Q07) discharges.
has submitted the data on time and it • SCIP VTE-1, VTE-2, and SCIP
has been accepted into the Warehouse. receipt, entry and storage facilities; and
(e) written documentation of survey Infection 2 will be validated using 2nd
In the FY 2008 IPPS final rule with quarter CY 2007 and 3rd quarter CY
comment period (72 FR 47362), we processes. Organizations will be given a
defined time period in which to correct 2007 discharges.
stated that hospitals and survey vendors • SCIP Infection 4 and SCIP Infection
must participate in a quality oversight any problems and provide followup
6 must be submitted starting with 1st
process conducted by the HCAHPS documentation of corrections for
quarter CY 2008 discharges but will not
project team. Starting in July 2007, we review. Hospitals/survey vendors will
be validated.
be subject to followup site visits and/or
began asking hospitals/survey vendors • HCAHPS data must continuously be
to correct any problems that were found conference calls, as needed. If CMS
submitted and will be reviewed as
and provide followup documentation of determines that a hospital is
discussed above.
corrections for review within a defined noncompliant with HCAHPS program • AMI, HF, and PN 30-day mortality
time period. If the HCAHPS project requirements, CMS may determine that measures will be calculated as
team finds that the hospital has not the hospital is not submitting HCAHPS discussed below.
made these corrections, CMS may data that meet the requirements of the In the FY 2008 IPPS final rule with
determine that the hospital is not RHQDAPU program. comment period (72 FR 47364), we
submitting HCAHPS data that meet the 6. Current and Proposed Chart stated that, for the FY 2008 update and
requirements for the RHQDAPU Validation Requirements in subsequent years, we would revise
program. As part of these activities, and post up-to-date confidence interval
jlentini on PROD1PC65 with PROPOSALS2
HCAHPS project staff reviews and a. Chart Validation Requirements for FY information on the QualityNet Web site
discusses with survey vendors and 2009 explaining the application of the
hospitals self-administering the survey In the FY 2008 IPPS final rule with confidence interval to the overall
their specific Quality Assurance Plans, comment period (72 FR 47361), we validation results. The data are being
survey management procedures, stated that, until further notice, we validated at several levels. There are
sampling and data collection protocols, would continue to require that hospitals consistency and internal edit checks to
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23658 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
ensure the integrity of the submitted b. Proposed Chart Validation • The following 21 measures from the
data; there are external edit checks to Requirements for FY 2010 FY 2009 RHQDAPU program measure
verify expectations about the volume of For FY 2010, we are proposing the set will be validated using data from 4th
the data received. following chart validation requirements quarter 2007 through 3rd quarter 2008
to reflect the proposed 72-measure set: discharges.
Quality measure validated from 4th quarter 2007 through 3rd quarter
Topic 2008 discharges
Surgical Care Improvement Project (SCIP)—named SIP for discharges Prophylactic antibiotic received within 1 hour prior to surgical incision
prior to July 2006 (3Q06).
SCIP–VTE–1: Venous thromboembolism (VTE) prophylaxis ordered for
surgery patients***
SCIP–VTE–2: VTE prophylaxis within 24 hours pre/post surgery***
SCIP Infection 2: Prophylactic antibiotic selection for surgical
patients***
SCIP-Infection 3: Prophylactic antibiotics discontinued within 24 hours
after surgery end time
• SCIP Infection 4 and Infection 6 As explained above, will also revise validation. In addition to the measures
will be validated using data from 2nd and post up-to-date confidence interval for which hospitals must submit data for
and 3rd quarter CY 2008 discharges. information on the QualityNet Web site FY 2009 (with the exception of the
In addition, we are proposing to explaining the application of the Pneumonia Oxygenation Assessment
include the following three measures in confidence interval to the overall measure), we have proposed that
the FY 2010 RHQDAPU program validation results. hospitals will submit data on the
validation process that are included the proposed five stroke measures, six VTE
c. Chart Validation Methods and
FY 2009 RHQDAPU program measure measures, and four nursing sensitive
Requirements Under Consideration for
set but have been updated or deleted for measures for FY 2010 using chart
FY 2011 and Subsequent Years
the FY 2010 measure set: abstraction. CMS is considering the
• Pneumonia antibiotic prophylaxis Under the current and proposed addition of these measures to the
timing within 4 hours will be validated RHQDAPU program chart validation current RHQDAPU program validation
using data from 4th quarter 2007 process, we validate measures by process for FY 2011 and future years.
through 3rd quarter 2008 discharges. reabstracting on a quarterly basis a However, we are considering whether
• Percutaneous Coronary Intervention random sample of five patient records registries and other external parties that
(PCI) Timing within 120 minutes will be for each hospital. This quarterly sample may be collecting data on proposed
validated using data from 4th quarter results in an annual combined sample of RHQDAPU program measures could
2007 through 3rd quarter 2008 20 patient records across 4 calendar validate the accuracy of those measures
discharges. quarters, but because the samples are beginning in FY 2011. In addition, we
• Pneumonia Oxygenation random, they do not necessarily include note that the proposed readmission
Assessment will be validated using data patient records covering each of the measures are calculated using Medicare
from 4th quarter through 3rd quarter clinical topics. claims information and do not require
2008 discharges. We anticipate that the proposed chart validation.
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These measures will be submitted by expansion of the RHQDAPU program We are interested in receiving public
hospitals during 2008 and early 2009, measure set to include additional comments from a broad set of
and are available to be validated by clinical topics will decrease the stakeholders on the impact of adding
CMS in time for the FY 2010 RHQDAPU percentage of RHQDAPU clinical topics, measures to the validation process, as
program payment eligibility as well as the total number of measures, well as modifications to the current
determination. covered in many hospitals’ annual chart validation process that could improve
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23659
the reliability and validity of the designate an authorized contact to CMS measures combine results from two or
methodology. We specifically request for attestation in their patient-level data more hospitals.
input concerning the following: submission.
9. Proposed Reconsideration and
• Which of the measures or measure Resubmissions would continue to be Appeal Procedures
sets should be included in the FY 2010 allowed before the quarterly submission
RHQDAPU program chart validation deadline, and hospitals would be For FY 2009, we are proposing to
process or in the chart validation required to electronically update their continue the current RHQDAPU
process for subsequent years? pledges about data accuracy at the time program reconsideration and appeal
• What validation challenges are of resubmission. We welcome procedures finalized in the FY 2008
posed by the RHQDAPU program comments on this approach. IPPS final rule with comment period.
measures and measure sets? What The deadline for submitting a request
improvements could be made to 8. Public Display Requirements for reconsideration in connection with
validation or reporting that might offset Section 1886(b)(3)(B)(viii)(VII) of the the FY 2009 payment determination is
or otherwise address those challenges? Act provides that the Secretary shall November 1, 2008. We also are
• Should CMS switch from its current establish procedures for making data proposing to use the same procedural
quarterly validation sample of five submitted under the RHQDAPU rules finalized in the FY 2008 IPPS final
charts per hospital to randomly program available to the public. The rule with comment period (72 FR
selecting a sample of hospitals, and RHQDAPU program quality measures 47365). We posted these rules on the
selecting more charts on an annual basis are posted on the Hospital Compare QualityNet Web site for the FY 2008
to improve reliability of hospital level Web site (http:// RHQDAPU program reconsideration
validation estimates? www.hospitalcompare.hhs.gov). CMS process.
• Should CMS select the validation requires that hospitals sign a ‘‘Reporting Under the procedural rules, in order
sample by clinical topic to ensure that Hospital Quality Data for Annual to receive reconsideration for FY 2009,
all publicly reported measures are Payment Update Notice of the hospital must—
covered by the validation sample? Participation’’ form when they first • Submit to CMS, via QualityNet, a
register to participate in the RHQDAPU Reconsideration Request form (available
7. Data Attestation Requirements on the QualityNet Web site) containing
program. Once a hospital has submitted
a. Proposed Change to Requirements for a form, the hospital is considered to be the following information:
FY 2009 an active RHQDAPU program Æ Hospital Medicare ID number.
participant until such time as the Æ Hospital Name.
In the FY 2008 IPPS final rule with Æ CMS-identified reason for failure
comment period (72 FR 47364), we hospital submits a withdrawal form to
(as provided in the CMS notification of
stated that we would require for FY CMS (72 FR 47360). Hospitals signing
failure letter to the hospital).
2008 and subsequent years that this form agree that they will allow CMS
Æ Hospital basis for requesting
hospitals attest each quarter to the to publicly report the quality measures
reconsideration. (This must identify the
completeness and accuracy of their data, as required in the applicable year’s
hospital’s specific reason(s) for
including the volume of data, submitted RHQDAPU program requirements.
believing it met the RHQDAPU program
to the QIO Clinical Warehouse in order We are proposing to continue to requirements and should receive the full
to improve aspects of the validation display quality information for public FY 2009 IPPS annual payment update.)
checks. We stated that we would viewing as required by section Æ CEO contact information, including
provide additional information to 1886(b)(3)(B)(viii)(VII) of the Act. Before name, e-mail address, telephone
explain this attestation requirement, as we display this information, hospitals number, and mailing address (must
well as provide the relevant form to be will be permitted to review their include physical address, not just the
completed on the QualityNet Web site, information as recorded in the QIO post office box).
at the same time as the publication of Clinical Warehouse. Æ QualityNet System Administrator
the FY 2008 IPPS final rule with Currently, hospitals that share the contact information, including name, e-
comment period. same CCN (formerly known as Medicare mail address, telephone number, and
We are now proposing to defer the Provider Number (MPN)) must combine mailing address (must include physical
requirement in FY 2009 for hospitals to data collection and submission across address, not just the post office box).
separately attest to the accuracy and their multiple campuses (for both • The request must be signed by the
completeness of their submitted data clinical measures and for HCAHPS). hospital’s CEO.
due to the burden placed on hospitals These measures are then publicly • Following receipt of a request for
to report paper attestation forms on a reported as if they apply to a single reconsideration, CMS will—
quarterly basis. We continue to expect hospital. We estimate that • Provide an e-mail
that hospitals will submit quality data approximately 5 to 10 percent of the acknowledgement, using the contact
that are accurate to the best of their hospitals reported on the Hospital information provided in the
knowledge and ability. Compare Web site share CCNs. reconsideration request, to the CEO and
Beginning with the FY 2008 RHQDAPU the QualityNet Administrator that the
b. Proposed Requirements for FY 2010 program, hospitals must report the name letter has been received.
For FY 2010 and subsequent years, we and address of each hospital that shares • Provide a formal response to the
are soliciting public comment on the the same CCN. This information will be hospital CEO, using the contact
electronic implementation of the gathered through the RHQDAPU information provided in the
attestation requirement at the point of program Notice of Participation form for reconsideration request, notifying the
jlentini on PROD1PC65 with PROPOSALS2
data submission to the QIO Clinical new hospitals participating in the facility of the outcome of the
Warehouse. Hospitals would RHQDAPU program. To increase reconsideration process. CMS expects
electronically pledge to CMS that their transparency in public reporting and the process to take 60 to 90 days from
submitted data are accurate and improve the usefulness of the Hospital the due date of November 1, 2008.
complete to the best of their knowledge. Compare Web site, we will note on the If a hospital is dissatisfied with the
Hospitals would be required to Web site where publicly reported result of a RHQDAPU program
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23660 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
reconsideration decision, the hospital medical records (EMRs) that will allow include publication in the Federal
may file a claim under 42 CFR part 405, for reporting of clinical quality data Register as well as ongoing
subpart R (a Provider Reimbursement from the EMRs directly to a CMS data collaboration with external stakeholders
Review Board (PRRB) appeal). repository (70 FR 47420). We intend to such as the HQA, the AHA, the FAH,
begin working toward creating the AAMC, and the Joint Commission.
10. Proposed RHQDAPU Program
measures’ specifications, and a system We further anticipate that as HIT is
Withdrawal Deadline for FYs 2009 and
or mechanism, or both, that will accept implemented, a formal plan, including
2010
the data directly without requiring the training, will be developed to assist
We propose to accept RHQDAPU transfer of the raw data into an XML file providers in understanding and
program withdrawal forms for FY 2009 as is currently done. The Department utilizing HIT in reporting quality data.
from hospitals through August 15, 2008. continues to work cooperatively with In addition, we will assess the
We are proposing this deadline to other Federal agencies in the effectiveness of our communications
provide CMS with sufficient time to establishment of Federal Health with providers and stakeholders as it
update the RHQDAPU FY 2009 payment Architecture (FHA) data standards. We relates to all information dissemination
to hospitals starting on October 1, 2008. encouraged hospitals that are pertinent to collecting hospital quality
If a hospital withdraws from the developing systems to conform them to data as part of an independent and
program for FY 2009, it will receive a industry standards, and in particular to comprehensive external evaluation of
2.0 percentage point reduction in its FY FHA data standards, once identified, the RHQDAPU program.
2009 annual payment update. taking measures to ensure that the data We are again soliciting comments on
We also propose to accept RHQDAPU necessary for quality measures are the issues and challenges associated
program withdrawal forms for FY 2010 captured. Ideally, such systems will also with EMRs. Specifically, we invite
from hospitals through August 15, 2009. provide point-of-care decision support comment on our proposed changes to
If a hospital withdraws from the that enables detection of high levels of our data submission requirements to be
program for FY 2010, it will receive a performance on the measures. Hospitals more aligned with currently
2.0 percentage point reduction in its FY using EMRs to produce data on quality implemented HIT systems, including
2010 annual payment update. measures will be held to the same data collection from registries and
11. Requirements for New Hospitals performance expectations as hospitals laboratory data.
not using EMRs. We recognize the potential burden on
In the FY 2008 IPPS final rule with Due to the low volume of comments hospitals of increased data reporting
comment period (72 FR 47366), we we received on this issue in response to requirements for process measures that
stated that a new hospital that receives the FY 2006 proposed IPPS rule, in the require chart abstraction. In FY 2007
a provider number on or after October FY 2007 IPPS proposed (71 FR 24095), IPPS rulemaking, we listed a variety of
1 of each year (beginning with October we again invited public comment on additional possible measures for future
1, 2007) will be required to report these requirements and related options. years. The measures included and
RHQDAPU program data beginning with In the FY 2007 IPPS final rule (71 FR emphasized additional outcomes
the first day of the quarter following the 48045), we summarized and addressed measures. Additional measures were
date the hospital registers to participate the additional comments we received. included for which the data sources are
in the RHQDAPU program. For In the FY 2008 IPPS proposed rule (72 claims. For these, no additional data
example, a hospital that receives its FR 24809), we noted that we would abstraction or submission would be
CCN on October 2, 2008, and signs up welcome additional comments on this required for reporting hospitals beyond
to participate in the RHQDAPU program issue. the claims data. In proposing measures
on November 1, 2007, will be expected In the FY 2008 IPPS final rule with for FY 2010, we seek to emphasize
to meet all of the data submission comment period (72 FR 47366), we outcome measures and to minimize any
requirements for discharges on or after responded to the additional comments additional data collection burden. In
January 1, 2009. we received and noted that CMS plans addition, as provided in section
In addition, we strongly recommend to continue working with the American 1886(b)(3)(B)(viii)(VI) and discussed in
that each new hospital participate in an Health Information Community (AHIC)
section IV.B.2.a. of this proposed rule,
HCAHPS dry run, if feasible, prior to and other entities to explore processes
we are proposing to retire one measure
beginning to collect HCAHPS data on an through which an EMR could speed the
where there is no meaningful difference
ongoing basis to meet RHQDAPU collection and minimize the resources
among hospitals as a means of reducing
program requirements. We refer readers necessary for quality reporting. (The
data collection burden.
to the Web site at AHIC is a Federal advisory body,
www.hcahpsonline.org for a schedule of chartered in 2005 to make C. Medicare Hospital Value-Based
upcoming dry runs. The dry run will recommendations to the Secretary on Purchasing (VBP)
give newly participating hospitals the how to accelerate the development and
1. Medicare Hospital VBP Plan Report to
opportunity to gain first-hand adoption of health information
technology.) In addition, we noted that Congress
experience collecting and transmitting
HCAHPS data without the public we will continue to participate in Through section 5001(b) of the Deficit
reporting of results. Using the official appropriate HHS studies and Reduction Act of 2005, Congress
survey instrument and the approved workgroups, as mentioned by a GAO authorized the development of a plan to
modes of administration and data report (GAO–07–320) about hospital implement value-based purchasing
collection protocols, hospitals/survey quality data and their use of information (VBP) beginning FY 2009 for IPPS
vendors will collect HCAHPS data and technology. As appropriate, CMS will hospital services. By statute, the plan
jlentini on PROD1PC65 with PROPOSALS2
submit the data to QualityNet. inform interested parties regarding must address: (a) The ongoing
progress in the implementation of HIT development, selection, and
12. Electronic Medical Records for the collection and submission of modification process for measures of
In the FY 2006 IPPS final rule, we hospital quality data as specific steps, quality and efficiency in hospital
encouraged hospitals to take steps including timeframes and milestones, inpatient settings; (b) reporting,
toward the adoption of electronic are identified. Current mechanisms collection, and validation of quality
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23661
data; (c) the structure, size, and source expanded public reporting; and (g) an 1886(d)(5)(D)(iii) of the Act defines an
of value-based payment adjustments; approach to monitoring VBP impacts. SCH as a hospital that, by reason of
and (d) public disclosure of hospital The Medicare Hospital VBP Plan factors such as isolated location,
performance data. Report to Congress is available on the weather conditions, travel conditions,
To develop the plan, CMS created a CMS Web site at: http:// absence of other like hospitals (as
Hospital VBP Workgroup with members www.cms.hhs.gov/AcuteInpatientPPS/ determined by the Secretary), or
from various CMS components and the downloads/HospitalVBPPlanRTCFINAL historical designation by the Secretary
Office of the Assistant Secretary for SUBMITTED2007.pdf. as an essential access community
Planning and Evaluation. The hospital, is the sole source of inpatient
2. Testing and Further Development of hospital services reasonably available to
Workgroup completed an environmental the Medicare Hospital VBP Plan
scan of existing hospital VBP programs, Medicare beneficiaries. The regulations
an issue paper outlining the topics to be The Hospital VBP Workgroup has that set forth the criteria that a hospital
addressed in the plan, and an options undertaken testing of the VBP Plan. This must meet to be classified as an SCH are
paper presenting design alternatives for ‘‘dry run’’ or ‘‘simulation’’ of the Plan located in 42 CFR 412.92 of the
the plan. will use the most recent clinical regulations.
CMS hosted two public Listening process-of-care and HCAHPS Under the IPPS, separate special
Sessions in early 2007 to solicit measurement data available from the payment protections also are provided
comments from interested parties on RHQDAPU program. New information to a Medicare-dependent, small rural
outstanding design questions associated generated by the VBP Plan testing will hospital (MDH). Section
with development of the plan. The include: (a) Performance scores by 1886(d)(5)(G)(iv) of the Act defines an
perspectives expressed by stakeholders domain; (b) total performance scores; MDH as a hospital that is located in a
(including hospitals, consumers, and and (c) financial impacts. Following a rural area, has not more than 100 beds,
purchasers) during these sessions and in process similar to that used in is not an SCH, and has a high
writing assisted the Workgroup in developing the Plan, CMS will analyze percentage of Medicare discharges (not
creating the Medicare Hospital VBP this information by individual IPPS less than 60 percent in its 1987 cost
Plan Report to Congress. The Report was hospital, by segment of the hospital reporting year or in 2 of its most recent
submitted to Congress on November 21, industry (that is, geographic location, 3 audited and settled Medicare cost
2007. size, teaching status, among others), and reporting years). The regulations that set
The Medicare Hospital VBP Plan in aggregate for all IPPS hospitals. forth the criteria that a hospital must
builds on the foundation of Medicare’s The results of VBP Plan testing will be meet to be classified as an MDH are
current RHQDAPU program (discussed used to further develop the Plan. located in 42 CFR 412.108.
Priorities for Plan completion include Although SCHs and MDHs are paid
in section IV.B. of the preamble of this
addressing the small numbers issue under special payment methodologies,
proposed rule), which, since FY 2005,
(described on pages 74 and 75 of the they are hospitals that are paid under
has provided differential payments to
Hospital VBP Plan Report to Congress) section 1886(d) of the Act. Like all IPPS
hospitals that report their performance
and developing a scoring methodology hospitals paid under section 1886(d) of
on a defined set of inpatient measures
for the outcomes domain (pages 57–58 the Act, SCHs and MDHs are paid for
for public posting on the Hospital
of the Hospital VBP Plan Report to their discharges based on the DRG
Compare Web site. If authorized by
Congress), which will become an weights calculated under section
Congress, the VBP Plan would replace
additional aspect of the performance 1886(d)(4) of the Act.
the current quality reporting program Effective with hospital cost reporting
with a new program that would include model. After completion, the Plan will
be retested. periods beginning on or after October 1,
both public reporting and financial 2000, section 1886(d)(5)(D)(i) of the Act
incentives to drive improvements in We are seeking public comments on
how to take full advantage of the new (as amended by section 6003(e) of Pub.
clinical quality, patient-centeredness, L. 101–239) and section 1886(b)(3)(I) of
and efficiency. information generated through this
testing and further Plan development. the Act (as added by section 405 of Pub.
The proposed plan contains the L. 106–113 and further amended by
following key components: (a) A For example: Should the testing and
retesting results be publicly posted? If section 213 of Pub. L. 106–554), provide
performance assessment model that that SCHs are paid based on whichever
incorporates measures from different the testing results were to be posted,
would the best location be the Hospital of the following rates yields the greatest
quality domains (that is, clinical process aggregate payment to the hospital for the
of care, patient experience of care, Compare Web site or the CMS Web site
at: http://www.cms.hhs.gov? In what cost reporting period:
outcomes, among others) to calculate a • The Federal rate applicable to the
hospital’s total performance score; (b) format would public posting be most
useful to potential audiences? At what hospital;
options for translating this score into an • The updated hospital-specific rate
incentive payment that would make a level would the data be posted—
individual hospital or some higher based on FY 1982 costs per discharge;
portion of the hospital’s base DRG • The updated hospital-specific rate
payment contingent on its total level? Which data elements from the
based on FY 1987 costs per discharge;
performance score; (c) criteria for testing results would be most useful to
or
share?
selecting performance measures for the • The updated hospital-specific rate
financial incentive and candidate D. Sole Community Hospitals (SCHs) based on FY 1996 costs per discharge.
measures for FY 2009 and beyond; (d) and Medicare-Dependent, Small Rural For purposes of payment to SCHs for
a phased approach for transitioning Hospitals (MDHs): Volume Decrease which the FY 1996 hospital-specific rate
jlentini on PROD1PC65 with PROPOSALS2
from the RHQDAPU program to the VBP Adjustment (§§ 412.92 and 412.108) yields the greatest aggregate payment,
plan; (e) proposed enhancements to the payments for discharges during FYs
current data transmission and validation 1. Background 2001, 2002, and 2003 were based on a
infrastructure to support VBP program Under the IPPS, special payment blend of the FY 1996 hospital-specific
requirements; (f) refinements to the protections are provided to a sole rate and the greater of the Federal rate
Hospital Compare Web site to support community hospital (SCH). Section or the updated FY 1982 or FY 1987
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23662 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
hospital-specific rate. For discharges percent in its total number of inpatient appropriate IPPS update factor minus
during FY 2004 and subsequent fiscal discharges from one cost reporting any adjustment for excess staff. The
years, payments based on the FY 1996 period to the next, if the circumstances SCH or MDH receives the difference in
hospital-specific rate are 100 percent of leading to the decline in discharges a lump-sum payment.
the updated FY 1996 hospital-specific were beyond the SCH’s control. Section In order to determine whether or not
rate. 1886(d)(5)(G)(iii) of the Act requires that the hospital’s nurse staffing level is
Through and including FY 2006, the Secretary make a payment appropriate, the fiscal intermediary/
under section 1886(d)(5)(G) of the Act, adjustment to an MDH that experiences MAC compares the hospital’s actual
MDHs are paid based on the Federal rate a decrease of more than 5 percent in its number of nursing staff in each area
or, if higher, the Federal rate plus 50 total number of inpatient discharges with the staffing of like-size hospitals in
percent of the difference between the from one cost reporting period to the the same census region. If a hospital
Federal rate and the updated hospital- next, if the circumstances leading to the employs more than the reported average
specific rate based on FY 1982 or FY decline in discharges were beyond the number of nurses for hospitals of its size
1987 costs per discharge, whichever is MDH’s control. These adjustments were and census region, the fiscal
higher. However, section 5003 of Pub. L. designed to compensate an SCH or MDH intermediary/MAC reduces the amount
109–171 (DRA) modified these rules for for the fixed costs it incurs in the year of the adjustment by the cost of
discharges occurring on or after October in which the reduction in discharges maintaining the additional staff. The
1, 2006. Section 5003(c) changed the 50 occurred, which it may be unable to amount of the reduction is calculated by
percent adjustment to 75 percent. reduce. Such costs include the multiplying the actual number of
Section 5003(b) requires that an MDH maintenance of necessary core staff and nursing staff above the reported average
use the 2002 cost reporting year as its services. Our records indicate that less by the average nurse salary for that
base year (that is, the FY 2002 updated than 10 SCHs/MDHs request and receive hospital as reported on the Medicare
hospital-specific rate), if that use results this payment adjustment each year. cost report. The complete process for
in a higher payment. MDHs do not have We believe that not all staff costs can determining the amount of the
the option to use their FY 1996 hospital- be considered fixed costs. Using a adjustment can be found at Section
specific rate. standardized formula specified by us, 2810.1 of the PRM–1.
For each cost reporting period, the the SCH or MDH must demonstrate that Prior to FY 2007, our policy was for
fiscal intermediary/MAC determines it appropriately adjusted the number of fiscal intermediaries/MACs to obtain
which of the payment options will yield staff in inpatient areas of the hospital average nurse staffing data from the
the highest aggregate payment. Interim based on the decrease in the number of AHA HAS/Monitrend Data Book.
payments are automatically made at the inpatient days. This formula examines However, in light of concerns that the
highest rate using the best data available nursing staff in particular. If an SCH or Data Book had been published in 1989
at the time the fiscal intermediary/MAC MDH has an excess number of nursing and is no longer updated, in the FY
makes the determination. However, it staff, the cost of maintaining those staff 2007 IPPS rule, we proposed and
may not be possible for the fiscal members is deducted from the total finalized our policy to update the data
intermediary/MAC to determine in adjustment. One exception to this policy sources and methodology used to
advance precisely which of the rates is that no SCH or MDH may reduce its determine the core staffing factors (that
will yield the highest aggregate payment number of staff to a level below what is is, the average nursing staff for similar
by year’s end. In many instances, it is required by State or local law. In other bed size and census region) for purposes
not possible to forecast the outlier words, an SCH or MDH will not be of calculating the volume decrease
payments, the amount of the DSH penalized for maintaining a level of staff adjustment (71 FR 48056 through
adjustment, or the IME adjustment, all that is consistent with State or local 48060). We specified that for adjustment
of which are applicable only to requirements. requests for decreases in discharges
payments based on the Federal rate and The process for determining the beginning with FY 2007 (that is, a
not to payments based on the hospital- amount of the volume decrease decrease in discharges in 2007 as
specific rate. The fiscal intermediary/ adjustment can be found in Section compared to 2006), an SCH or MDH
MAC makes a final adjustment at the 2810.1 of the Provider Reimbursement could opt to use one of two data
close of the cost reporting period after Manual, Part 1 (PRM–1). Fiscal sources: the AHA Annual Survey or the
it determines precisely which of the intermediaries/MACs are responsible for Occupational Mix Survey, but could not
payment rates would yield the highest establishing whether an SCH or MDH is use the HAS/Monitrend Data Book. (For
aggregate payment to the hospital. eligible for a volume decrease any open adjustment requests prior to
If a hospital disagrees with the fiscal adjustment and, if so, the amount of the FY 2007, we allowed SCHs and MDHs
intermediary’s or MAC’s determination adjustment. To qualify for this the option of using the results of any of
regarding the final amount of program adjustment, the SCH or MDH must three sources: (1) The 2006
payment to which it is entitled, it has demonstrate that: (a) a decrease of more Occupational Mix Survey for cost
the right to appeal the fiscal than 5 percent in total number of reporting periods beginning in FY 2006;
intermediary’s or MAC’s decision in inpatient discharges has occurred; and (2) the AHA Annual Survey (where
accordance with the procedures set (b) the circumstance that caused the available); or (3) the AHA HAS/
forth in 42 CFR Part 405, Subpart R, decrease in discharges was beyond the Monitrend Data Book. We also specified
which concern provider payment control of the hospital. Once the fiscal a methodology for calculating those core
determinations and appeals. intermediary/MAC has established that staffing factors. For purposes of
the SCH or MDH satisfies these two explaining the methodology, we applied
2. Volume Decrease Adjustment for requirements, it will calculate the it to the 2003 Occupational Mix Survey
jlentini on PROD1PC65 with PROPOSALS2
SCHs and MDHs: Data Sources for adjustment. The adjustment amount is data. In our explanation, we recognized
Determining Core Staff Values determined by subtracting the second that some of the 2003 data seemed
Section 1886(d)(5)(D)(ii) of the Act year’s DRG payment from the lesser of: anomalous, and we solicited comments
requires that the Secretary make a (a) the second year’s costs minus any on a possible alternative methodology.
payment adjustment to an SCH that adjustment for excess staff; or (b) the However, there were no suggested
experiences a decrease of more than 5 previous year’s costs multiplied by the alternative methodologies from the
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23663
commenters. We also explained that, In the FY 2007 IPPS final rule (71 FY with the FY 2006 Medicare cost report
while we used the 2003 Occupational 48057), we stated that we would use the file. We would then eliminate all
Mix Survey data ‘‘for purposes of results of the FY 2006 Occupational Mix observations for non-IPPS providers,
describing how we would implement Survey and begin applying the providers who failed to complete the
this methodology,’’ the final policy was methodology for adjustments resulting occupational mix survey and the
to use FY 2006 Occupational Mix from a decrease in discharges in FY providers for which provider numbers,
Survey data going forward. At the time 2007. Because the occupational mix bed counts and/or days counts were
we published the proposed and final survey is conducted once every 3 years, missing. We would annualize the results
rules, however, we had not yet we would update the data set every 3 so that the nursing hours from the
processed the FY 2006 data, and could years. However, at the time of the FY Occupational Mix Survey and the
not present the core staffing figures that 2007 IPPS final rule, the FY 2006 patient days reported on the Medicare
resulted from such data. Occupational Mix Survey data were not cost report is representative of one year.
We have now processed the 2006 available. In that final rule, we For each provider in the pool, we
Occupational Mix Survey data using the described our methodology using the FY would calculate the number of nursing
methodology specified in the FY 2007 2003 occupational mix data and the FY hours by adding the number of
IPPS final rule and continue to see some 2003 Medicare cost report file. However, registered nurses, licensed practical
results that cause us to believe that the these data were used only in order to nurses, and nursing aide hours reported
methodology for calculating the core present an example of how our on the Occupational Mix Survey. We
staffing factors should be slightly methodology would work. Our final would divide the result of this
revised from the methodology discussed policy was to use FY 2006 occupational calculation by the total number of
in the FY 2007 IPPS final rule (71 FR mix and cost report data when actually patient days reported on line 12 on
48056 through 48060). The new processing adjustment requests. Worksheet S–3, Part I, Column 6 of the
methodology uses a revised formula to In the FY 2007 IPPS final rule, to Medicare cost report. This includes
remove outliers from the core staffing illustrate how we would calculate the patient days in the general acute care
values. average number of nursing hours per area and the intensive care unit area.
patient day by bed size and region, we The result is the number of nursing
a. Occupational Mix Survey
first merged the FY 2003 Occupational hours per patient day.
In the FY 2007 IPPS final rule (71 FR Mix Survey data with the FY 2003 For purposes of calculating the census
48055), we explained the methodology Medicare cost report file. We eliminated regional averages for the various bed-
we would use for calculating core all observations for non-IPPS providers, size groups, we are proposing a different
staffing values from the Occupational providers who failed to complete the method to remove outliers in the data.
Mix Survey. We stated that we would occupational mix survey and the First, we would calculate the difference
calculate the nursing hours per patient providers for which provider numbers, between the observations in the 75th
day for each SCH or MDH by dividing bed counts, and/or days counts were percentile and the 25th percentile,
the number of paid nursing hours (for missing. which is the inter-quartile range. We
registered nurses, licensed practical For each provider in the pool, we would remove observations that are
nurses and nursing aides) reported on calculated the number of nursing hours greater than the 75th percentile plus 1.5
the Occupational Mix Survey by the by adding the number of registered times the inter-quartile range and less
number of patients days reported on the nurses, licensed practical nurses, and than the 25th percentile minus 1.5 times
Medicare cost report. The results would nursing aide hours reported on the the inter-quartile range. This
be grouped in the same bed-size groups Occupational Mix Survey. We divided methodology, known as the Tukey
and census regions as were used in the the result of this calculation by the total method, is a common statistical method
HAS/Monitrend Data Book. number of inpatient days reported on used by the Office of the Actuary. Under
We indicated that we would publish the cost report to determine the number the standard deviation method
the mean number of nursing hours per of nursing hours per patient day. For described in the FY 2007 IPPS final
patient day, for each census region and purposes of calculating the census rule, the mean and standard deviation
bed-size group, in the Federal Register regional averages for the various bed- can be influenced by extreme values
and on the CMS Web site. For purposes size groups, we finalized our rule to (because the standard deviation is
of the volume decrease adjustment, the only include observations that fell increased by the very observations that
published data would be utilized in the within three standard deviations of the would otherwise be discarded from the
same way as the HAS/Monitrend data: mean of all observations, thus removing analysis). Our proposed methodology is
The fiscal intermediary/MAC would potential outliers in the data. a more robust technique because it uses
multiply the SCH’s and MDH’s number When the FY 2006 Occupational Mix the quartile values instead of variance to
of patient days by the applicable Survey data became available, our describe the spread of the data, and
published hours per patient day. This analysis of the results indicated that the quartiles are less influenced by extreme
figure would be divided by the average methodology for computing core staffing outlier values that may be present in the
number of worked hours per year per factors should be further revised in data.
nurse (for example, 2,080 for a standard order to further eliminate outlier data. Our proposed method would prevent
40-hour week). The result would be the After consulting with the Office of the the mean from being influenced by
target number of core nursing staff for Actuary on appropriate statistical extreme observations and assumes that
the particular SCH or MDH. If methods to remove outlier data, we are the middle 50 percent of the data has no
necessary, the cost of any excess staff proposing to modify our methodology outlier observations. The application of
(number of FTEs that exceed the for calculating the average nursing this methodology would result in a pool
jlentini on PROD1PC65 with PROPOSALS2
published number) would be removed hours per patient day using the FY 2006 of approximately 2,578 providers. Each
from the second year’s costs or, if Occupational Mix Survey data and FY census region and bed group category
applicable, the previous year’s costs 2006 Medicare cost report data. Similar required at least three providers in order
multiplied by the IPPS update factor to what was finalized in the FY 2007 for their average to be published. The
when determining the volume decrease IPPS rule, we are proposing to merge the results of the average nursing hours per
adjustment. FY 2006 Occupational Mix Survey data patient day by bed size and region using
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23664 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
the FY 2006 Occupational Mix Survey final rule (71 FR 48059), the results of discharges beginning with cost reporting
Data and the FY 2006 hospital cost the FY 2006 Occupational Mix Survey periods beginning in FYs 2006, 2007,
report data are shown in the table may be used for the volume decrease and 2008.
below. As stated in the FY 2007 IPPS adjustment calculations for decreases in
0–49 ........................... 25.47 20.60 21.08 24.52 20.27 25.92 22.16 24.52 20.99
50–99 ......................... 20.99 18.51 20.36 23.44 19.00 22.44 20.44 22.54 18.89
100–199 ..................... 18.12 16.31 17.31 18.87 17.43 19.50 17.01 18.70 16.25
200–399 ..................... 16.92 13.80 16.23 17.79 16.06 18.66 14.56 16.82 16.63
400+ ........................... 17.52 14.43 16.68 18.41 14.14 16.90 16.25 15.50 18.15
b. AHA Annual Survey In the FY 2007 IPPS final rule, we the difference between the observations
stated we would calculate the nursing in the 75th percentile and the 25th
In the FY 2007 IPPS final rule (71 FR hours per patient day using the AHA percentile, which is the inter-quartile
48058), we also allowed SCHs or MDHs Annual Survey data in a similar method range. Then, we are proposing to
that experienced a greater than 5 to the Occupational Mix Survey. remove observations that are greater
percent reduction in the number of Consistent with the HAS/Monitrend than the 75th percentile plus 1.5 times
discharges in a cost reporting period the Data book, we would only calculate the the inter-quartile range and less than the
option of using the AHA Annual Survey average number of nursing staff for a 25th percentile minus 1.5 times the
results, where available, to compare the bed-size/census group if there are data inter-quartile range. After removing the
number of hospital’s core staff with available for three or more hospitals. outliers, we would group the hospitals
other like-sized hospitals in its First, we would merge the AHA Annual by bed size and census area to calculate
geographic area. Our methodology for Survey Data with the corresponding the average number of nursing hours per
calculating the nursing hours per Medicare cost report. We would patient day for each category. Using the
patient day using the AHA Annual eliminate all observations for non-IPPS 2006 AHA Annual Survey data as an
Survey data and the Medicare hospital providers, providers with hospital-based example, this would result in a pool of
cost report was similar to the SNFs, and the providers for which
approximately 1,205 providers. The
methodology using the Occupational provider numbers, bed counts, and/or
results of the nursing hours per patient
Mix Survey data (eliminating outliers days counts were missing. We would
day using the 2006 AHA Annual Survey
outside of three standard deviations multiply the number of nurse, licensed
practical nurse, and nursing aide FTEs data and the Medicare cost report data
from the mean). For this reason, as with are shown below. The 2006 Survey
reported on the AHA Annual Survey by
the occupational mix data, both would be used for the volume decrease
2,080 hours to derive the number of
standard deviations and the mean could adjustment calculations for decreases in
nursing hours per year (based on a 40-
be influenced by extreme values. hour work week). We would then divide discharges occurring during cost
Therefore, we are proposing to refine this number by the total number of reporting periods beginning in FY 2006.
our methodology to calculate the core patient days reported on line 12 on As we stated in the FY 2007 IPPS final
staffing factors using the AHA Annual Worksheet S–3, Part I, Column 6 of the rule, for other years, the corresponding
Survey data as well. The AHA Annual Medicare cost report. In the FY 2007 AHA Annual Survey would be used for
Survey contains FTE counts for IPPS final rule (71 FR 48060), we had the year in which the decreased
registered nurses, practical and stated that we would eliminate all occurred. For example, if a hospital
vocational nurses, nursing assistive providers with results beyond three experienced a decrease between its 2004
personnel, and other personnel in both standard deviations from the mean. and 2005 cost reporting periods, the
inpatient and outpatient areas of the However, to be consistent with our fiscal intermediary/MAC would
hospital. This is consistent with the methodology with the Occupational Mix compare the hospital’s 2005 staffing
Occupational Mix Survey which Survey data, we are also proposing that with the results of the 2005 AHA
collects data on both the inpatient and we would remove outliers from the Annual Survey, using the methodology
outpatient areas of the hospital. AHA Annual Survey data by calculating discussed above.
New Middle South East North East South West North South Mountain Pacific
England Atlantic Atlantic Central Central Central Central
0–49 ........................... 25.82 23.48 21.77 26.12 17.25 24.75 23.66 25.44 24.50
50–99 ......................... 23.42 19.40 20.69 23.47 22.06 23.28 20.55 19.28 19.91
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23665
100–199 ..................... 18.89 17.46 18.43 20.08 19.64 20.23 19.02 18.80 18.71
200–399 ..................... 18.89 14.96 15.75 17.02 15.07 19.81 15.85 18.17 18.01
400+ ........................... 18.98 16.66 17.39 21.59 16.47 17.71 15.06 17.76 21.11
E. Rural Referral Centers (RRCs) to triennial review or MGCRB discharges criterion for an osteopathic
(§ 412.96) reclassification, but did not reinstate the hospital is at least 3,000 discharges per
Under the authority of section status of hospitals that lost RRC status year, as specified in section
1886(d)(5)(C)(i) of the Act, the because they were now urban for all 1886(d)(5)(C)(i) of the Act.)
purposes because of the OMB
regulations at § 412.96 set forth the 1. Case-Mix Index
designation of their geographic area as
criteria that a hospital must meet in
urban. However, subsequently, in the Section 412.96(c)(1) provides that
order to qualify under the IPPS as an
August 1, 2000 final rule (65 FR 47089), CMS establish updated national and
RRC. For discharges occurring before
we indicated that we were revisiting regional CMI values in each year’s
October 1, 1994, RRCs received the
that decision. Specifically, we stated annual notice of prospective payment
benefit of payment based on the other
that we would permit hospitals that rates for purposes of determining RRC
urban standardized amount rather than
previously qualified as an RRC and lost status. The methodology we used to
the rural standardized amount.
their status due to OMB redesignation of determine the national and regional CMI
Although the other urban and rural
the county in which they are located values is set forth in the regulations at
standardized amounts are the same for from rural to urban to be reinstated as
discharges occurring on or after October § 412.96(c)(1)(ii). The proposed national
an RRC. Otherwise, a hospital seeking median CMI value for FY 2009 includes
1, 1994, RRCs continue to receive RRC status must satisfy the applicable
special treatment under both the DSH all urban hospitals nationwide, and the
criteria. We used the definitions of proposed regional values for FY 2009
payment adjustment and the criteria for ‘‘urban’’ and ‘‘rural’’ specified in
geographic reclassification. are the median CMI values of urban
Subpart D of 42 CFR Part 412. hospitals within each census region,
Section 402 of Pub. L. 108–173 raised One of the criteria under which a
the DSH adjustment for other rural excluding those hospitals with
hospital may qualify as a RRC is to have approved teaching programs (that is,
hospitals with less than 500 beds and 275 or more beds available for use
RRCs. Other rural hospitals with less those hospitals that train residents in an
(§ 412.96(b)(1)(ii)). A rural hospital that approved GME program as provided in
than 500 beds are subject to a 12-percent does not meet the bed size requirement
cap on DSH payments. RRCs are not § 413.75). These values are based on
can qualify as an RRC if the hospital discharges occurring during FY 2007
subject to the 12-percent cap on DSH meets two mandatory prerequisites (a
payments that is applicable to other (October 1, 2006 through September 30,
minimum CMI and a minimum number 2007), and include bills posted to CMS’
rural hospitals (with the exception of of discharges), and at least one of three
rural hospitals with 500 or more beds). records through December 2007.
optional criteria (relating to specialty
RRCs are not subject to the proximity We are proposing that, in addition to
composition of medical staff, source of
criteria when applying for geographic meeting other criteria, if rural hospitals
inpatients, or referral volume)
reclassification, and they do not have to with fewer than 275 beds are to qualify
(§ 412.96(c)(1) through (c)(5) and the
meet the requirement that a hospital’s for initial RRC status for cost reporting
September 30, 1988 Federal Register (53
average hourly wage must exceed the periods beginning on or after October 1,
FR 38513)). With respect to the two
average hourly wage of the labor market 2008, they must have a CMI value for
mandatory prerequisites, a hospital may
area where the hospital is located by a FY 2007 that is at least—
be classified as an RRC if—
certain percentage (106/108 percent in • The hospital’s CMI is at least equal • 1.4285; or
FY 2008). to the lower of the median CMI for • The median CMI value (not
Section 4202(b) of Pub. L. 105–33 urban hospitals in its census region, transfer-adjusted) for urban hospitals
states, in part, ‘‘[a]ny hospital classified excluding hospitals with approved (excluding hospitals with approved
as an RRC by the Secretary * * * for teaching programs, or the median CMI teaching programs as identified in
fiscal year 1991 shall be classified as for all urban hospitals nationally; and § 413.75) calculated by CMS for the
such an RRC for fiscal year 1998 and • The hospital’s number of discharges census region in which the hospital is
each subsequent year.’’ In the August is at least 5,000 per year, or, if fewer, the located.
29, 1997 final rule with comment period median number of discharges for urban The proposed median CMI values by
(62 FR 45999), we reinstated RRC status hospitals in the census region in which region are set forth in the following
for all hospitals that lost the status due the hospital is located. (The number of table:
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Case-mix
Region index value
1. New England (CT, ME, MA, NH, RI, VT) .................................................................................................................................... 1.2515
2. Middle Atlantic (PA, NJ, NY) ....................................................................................................................................................... 1.2691
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) ........................................................................................................... 1.3589
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23666 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Case-mix
Region index value
4. East North Central (IL, IN, MI, OH, WI) ...................................................................................................................................... 1.3572
5. East South Central (AL, KY, MS, TN) ......................................................................................................................................... 1.3040
6. West North Central (IA, KS, MN, MO, NE, ND, SD) .................................................................................................................. 1.3557
7. West South Central (AR, LA, OK, TX) ........................................................................................................................................ 1.4405
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) ........................................................................................................................... 1.4692
9. Pacific (AK, CA, HI, OR, WA) ..................................................................................................................................................... 1.3872
The preceding numbers will be patient discharges subject to the IPPS which is the latest cost report data
revised in the FY 2009 IPPS final rule DRG-based payment. available at the time this proposed rule
to the extent required to reflect the was developed.
2. Discharges
updated FY 2007 MEDPAR file, which Therefore, we are proposing that, in
will contain data from additional bills Section 412.96(c)(2)(i) provides that addition to meeting other criteria, a
received through March 2008. CMS set forth the national and regional hospital, if it is to qualify for initial RRC
numbers of discharges in each year’s status for cost reporting periods
Hospitals seeking to qualify as RRCs
annual notice of prospective payment beginning on or after October 1, 2008,
or those wishing to know how their CMI rates for purposes of determining RRC must have as the number of discharges
value compares to the criteria should status. As specified in section for its cost reporting period that began
obtain hospital-specific CMI values (not 1886(d)(5)(C)(ii) of the Act, the national during FY 2006 a figure that is at least—
transfer-adjusted) from their fiscal standard is set at 5,000 discharges. We • 5,000 (3,000 for an osteopathic
intermediaries. Data are available on the are proposing to update the regional hospital); or
Provider Statistical and Reimbursement standards based on discharges for urban • The median number of discharges
(PS&R) System. In keeping with our hospitals’ cost reporting periods that for urban hospitals in the census region
policy on discharges, these CMI values began during FY 2006 (that is, October in which the hospital is located, as
are computed based on all Medicare 1, 2005 through September 30, 2006), indicated in the following table.
Number of
Region discharges
1. New England (CT, ME, MA, NH, RI, VT) .................................................................................................................................... 8,158
2. Middle Atlantic (PA, NJ, NY) ....................................................................................................................................................... 10,443
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) ........................................................................................................... 10,344
4. East North Central (IL, IN, MI, OH, WI) ...................................................................................................................................... 8,900
5. East South Central (AL, KY, MS, TN) ......................................................................................................................................... 7,401
6. West North Central (IA, KS, MN, MO, NE, ND, SD) .................................................................................................................. 7,988
7. West South Central (AR, LA, OK, TX) ........................................................................................................................................ 5,816
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) ........................................................................................................................... 9,919
9. Pacific (AK, CA, HI, OR, WA) ..................................................................................................................................................... 8,600
These numbers will be revised in the indirect patient care costs of teaching 2. IME Adjustment Factor for FY 2009
FY 2009 IPPS final rule based on the hospitals relative to nonteaching
latest available cost reports. hospitals. The regulations regarding the The IME adjustment to the MS–DRG
calculation of this additional payment, payment is based in part on the
We note that the median number of
known as the indirect medical applicable IME adjustment factor. The
discharges for hospitals in each census
education (IME) adjustment, are located IME adjustment factor is calculated by
region is greater than the national
at § 412.105. using a hospital’s ratio of residents to
standard of 5,000 discharges. Therefore,
The Balanced Budget Act of 1997 beds, which is represented as r, and a
5,000 discharges is the minimum
(Pub. L. 105–33) established a limit on formula multiplier, which is
criterion for all hospitals.
the number of allopathic and represented as c, in the following
We reiterate that, if an osteopathic equation: c x [{1 + r} .405 ¥ 1]. The
hospital is to qualify for RRC status for osteopathic residents that a hospital
may include in its full-time equivalent formula is traditionally described in
cost reporting periods beginning on or terms of a certain percentage increase in
after October 1, 2008, the hospital (FTE) resident count for direct GME and
IME payment purposes. Under section payment for every 10-percent increase
would be required to have at least 3,000 in the resident-to-bed ratio.
1886(h)(4)(F) of the Act, for cost
discharges for its cost reporting period
reporting periods beginning on or after Section 502(a) of Pub. L. 108–173
that began during FY 2005.
October 1, 1997, a hospital’s modified the formula multiplier (c) to be
F. Indirect Medical Education (IME) unweighted FTE count of residents for used in the calculation of the IME
Adjustment (§ 412.105) purposes of direct GME may not exceed adjustment. Prior to the enactment of
the hospital’s unweighted FTE count for Pub. L. 108–173, the formula multiplier
1. Background
its most recent cost reporting period was fixed at 1.35 for discharges
jlentini on PROD1PC65 with PROPOSALS2
Section 1886(d)(5)(B) of the Act ending on or before December 31, 1996. occurring during FY 2003 and
provides for an additional payment Under section 1886(d)(5)(B)(v) of the thereafter. In the FY 2005 IPPS final
amount under the IPPS for hospitals Act, a similar limit on the FTE resident rule, we announced the schedule of
that have residents in an approved count for IME purposes is effective for formula multipliers to be used in the
graduate medical education (GME) discharges occurring on or after October calculation of the IME adjustment and
program in order to reflect the higher 1, 1997. incorporated the schedule in our
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23667
regulations at § 412.105(d)(3)(viii) adjust IME and direct GME FTE resident organization for each beneficiary
through (d)(3)(xii). Section 502(a) caps to reflect the rotation of residents enrolled in an MA plan offered by the
modifies the formula multiplier among affiliated hospitals. organization for coverage of Medicare
beginning midway through FY 2004 and In response to circumstances in the Part A and Part B benefits. Section
provides for a new schedule of formula aftermath of Hurricanes Katrina and 1853(a)(1)(C) of the Act requires CMS to
multipliers for FYs 2005 and thereafter Rita, we supplemented regulations in adjust the monthly payment amount for
as follows: the April 12, 2006 interim final rule each enrollee to take into account the
• For discharges occurring on or after with comment period published in the health status of the MA plan’s enrollees.
April 1, 2004, and before October 1, Federal Register (71 FR 18654). The Under the CMS-Hierarchical Condition
2004, the formula multiplier is 1.47. regulatory changes allowed certain Category (HCC) risk adjustment
• For discharges occurring during FY hospitals to engage in emergency payment methodology, CMS determines
2005, the formula multiplier is 1.42. Medicare GME affiliations so that risk scores for MA enrollees for a year
• For discharges occurring during FY Medicare funding for GME is and adjusts the monthly payment
2006, the formula multiplier is 1.37. maintained while there are displaced amount using the appropriate enrollee
• For discharges occurring during FY residents training at various host risk score.
2007, the formula multiplier is 1.32. hospitals even as the hurricane-affected Under section 1853(a)(3)(B) of the
• For discharges occurring during FY hospitals are rebuilding their training Act, MA organizations are required to
2008 and fiscal years thereafter, the programs. The modifications to the ‘‘submit data regarding inpatient
formula multiplier is 1.35. regulations at § 413.75(b) and § 413.76(f) hospital services . . . and data
Accordingly, for discharges occurring provided flexibility for home hospitals regarding other services and other
during FY 2009, the formula multiplier whose residency programs have been information as the Secretary deems
would be 1.35. We estimate that disrupted due to an emergency to enter necessary’’ in order to implement a
application of this formula multiplier into emergency Medicare GME methodology for ‘‘risk adjusting’’
for FY 2009 IME adjustment will result affiliation agreements with host payments made to MA organizations.
in an increase in IME payment of 5.5 hospitals where the hospitals may not Risk adjustments to payments are made
percent for every approximately 10- otherwise meet the regulatory in order to take into account ‘‘variations
percent increase in the hospital’s requirements to form Medicare GME in per capita costs based on [the] health
resident-to-bed ratio. affiliations. (We note that on November status’’ of the Medicare beneficiaries
27, 2007, we issued a second interim enrolled in an MA plan offered by the
G. Medicare GME Affiliation Provisions final rule with comment period organization. Submission of data on
for Teaching Hospitals in Certain providing further flexibility relating to inpatient hospital services has been
Emergency Situations; Technical emergency Medicare GME affiliation required with respect to services
Correction (§ 413.79(f)(6)(iv)) agreements (72 FR 66893 through beginning on or after July 1, 1997.
1. Background 66898). We expect to address the public Submission of data on other services has
comments received on both interim been required since July 1, 1998.
Under section 1886(h) of the Act, as final rules with comment period and While we initially required the
amended by section 9202 of the finalize our policies in the FY 2009 IPPS submission of comprehensive data
Consolidated Omnibus Budget final rule scheduled to be published in regarding services provided by MA
Reconciliation Act (COBRA) of 1985 August 2008.) organizations, including comprehensive
(Pub. L. 99–272), the Secretary is inpatient hospital encounter data, we
authorized to make payments to 2. Technical Correction subsequently permitted MA
hospitals for the direct costs of In the April 12, 2006 interim final organizations to submit an
approved GME programs. Section rule, we revised § 413.79(f) by adding a ‘‘abbreviated’’ set of data. Our
1886(d)(5)(B) of the Act provides that new paragraph (6) to provide for more regulations at 42 CFR 422.310(d)(1)
prospective payment acute care flexibility in Medicare GME affiliations currently explicitly provide MA
hospitals that have residents in an for home hospitals located in section organizations with the option of
approved GME program receive an 1135 emergency areas to allow the home submitting an abbreviated data set.
additional payment for a Medicare hospitals to efficiently find training sites Under this provision, we currently
discharge to reflect the higher patient for displaced residents. We have collect limited risk adjustment data
care costs of teaching hospitals, that is, discovered that, under § 413.79(f)(6)(iv), from MA organizations, primarily
IME costs. Sections 1886(h)(4)(F) and in our provisions on the host hospital diagnosis data.
1886(d)(5)(B)(v) of the Act establish exception from the rolling average for From calendar years 2000 through
limits on the number of allopathic and the period from August 29, 2005 to June 2006, application of risk adjustment to
osteopathic residents that hospitals may 30, 2006, we included an incorrect MA payments was ‘‘phased in’’ with an
count for purposes of calculating direct cross-reference to the rolling average increasing percentage of the monthly
GME payments and the IME adjustment, requirements for direct GME as capitation payment subjected to risk
respectively, establishing hospital- ‘‘§ 413.75(d).’’ The correct citation to the adjustment. Beginning with calendar
specific direct GME and IME FTE rolling average requirements for direct year 2007, 100 percent of payments to
resident caps. Under the authority GME is § 413.79(d). We are proposing to MA organizations are risk-adjusted.
granted by section 1886(h)(4)(H)(ii) of correct the cross-reference under Given the increased importance of the
the Act, the Secretary issued rules to § 413.79(f)(6)(iv) to read ‘‘paragraph (d) accuracy of our risk adjustment
allow institutions that are members of of this section’’. methodology, we are proposing to
the same affiliated group to apply their amend § 422.310 to provide that CMS
jlentini on PROD1PC65 with PROPOSALS2
direct GME and IME FTE resident caps H. Payments to Medicare Advantage will collect data from MA organizations
on an aggregate basis through a Organizations: Collection of Risk regarding each item and service
Medicare GME affiliation agreement. Adjustment Data (§ 422.310) provided to an MA plan enrollee. This
The Medicare regulations at §§ 413.75 Section 1853 of the Act requires CMS will allow us to include utilization data
and 413.76 permit hospitals, through a to make advance monthly payments to and other factors that CMS can use in
Medicare GME affiliation agreement, to a Medicare Advantage (MA) developing the CMS–HCC risk
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23668 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
adjustment models in order to reflect Fraternal Benefit society plans, as another medical facility where
patterns of diagnoses and expenditures described at § 422.301(c). stabilization can occur.
in the MA program. Under § 422.310(g), we would The EMTALA statute also outlines the
Specifically, we are proposing to continue to provide that data that CMS obligation of hospitals to receive
revise § 422.310(a) to clarify that risk receives after the final deadline for a appropriate transfers from other
adjustment data are data used not only payment year will not be accepted for hospitals. Section 1867(g) of the Act
in the application of risk adjustment to purposes of the reconciliation. However, states that a participating hospital that
MA payments, but also in the we are proposing to revise paragraph has specialized capabilities or facilities
development of risk adjustment models. (g)(2) of § 422.310 to change the (such as burn units, shock-trauma units,
For example, once encounter data for deadline from ‘‘December 31’’ of the neonatal intensive care units, or, with
MA enrollees are available, CMS would payment year to ‘‘January 31’’ of the respect to rural areas, regional referral
have beneficiary-specific information on year following the payment year. We are centers as identified by the Secretary in
the utilization of services by MA plan also proposing to add language to regulation) shall not refuse to accept an
enrollees. These data could be used to provide that CMS may adjust deadlines appropriate transfer of an individual
calibrate the CMS–HCC risk adjustment as appropriate. who requires these specialized
models using MA patterns of diagnoses capabilities or facilities if the hospital
and expenditures. I. Hospital Emergency Services under has the capacity to treat the individual.
We are proposing to revise EMTALA (§ 489.24) The regulations implementing section
§§ 422.310(b), (c), (d)(3), and (g) to 1867 of the Act are found at 42 CFR
1. Background
clarify that the term ‘‘services’’ includes 489.24. The regulations at 42 CFR
items and services. Sections 1866(a)(1)(I), 1866(a)(1)(N), 489.20(l), (m), (q), and (r) also refer to
We are proposing to revise and 1867 of the Act impose specific certain EMTALA requirements. The
§ 422.310(d) to clarify that CMS has the obligations on certain Medicare- Interpretive Guidelines concerning
authority to require MA organizations to participating hospitals and CAHs. EMTALA are found at Appendix V of
submit encounter data for each item and (Throughout this section of this the CMS State Operations Manual.
service provided to an MA plan proposed rule, when we reference the 2. EMTALA Technical Advisory
enrollee. The proposed revision also obligation of a ‘‘hospital’’ under these Group (TAG) Recommendations
would clarify that CMS will determine sections of the Act and in our Section 945 of the Medicare
the formats for submitting encounter regulations, we mean to include CAHs Prescription Drug, Improvement, and
data, which may be more abbreviated as well.) These obligations concern Modernization Act of 2003 (MMA), Pub.
than those used for the fee-for-service individuals who come to a hospital L. 108–173, required the Secretary to
claims data submission process. emergency department and request establish a Technical Advisory Group
We are proposing to revise examination or treatment for a medical (TAG) to advise the Secretary on issues
§ 422.310(f) to clarify that one of the condition, and apply to all of these related to the regulations and
‘‘other’’ purposes for which CMS may individuals, regardless of whether they implementation of EMTALA. The MMA
use risk adjustment data collected under are beneficiaries of any program under specified that the EMTALA TAG be
this section would be to update risk the Act. composed of 19 members, including the
adjustment models with data from MA Administrator of CMS, the Inspector
enrollees. In addition, when providing The statutory provisions cited above General of HHS, hospital representatives
that CMS may use risk adjustment data are frequently referred to as the and physicians representing specific
for purposes other than adjusting Emergency Medical Treatment and specialties, patient representatives, and
payments as described at §§ 422.304(a) Labor Act (EMTALA), also known as the representatives of organizations
and (c), we are proposing to delete the patient antidumping statute. EMTALA involved in EMTALA enforcement.
phrase ‘‘except for medical records was passed in 1986 as part of the The EMTALA TAG’s functions, as
data’’ from paragraph (f). Any use of Consolidated Omnibus Budget identified in the charter for the
medical records data collected under Reconciliation Act of 1985 (COBRA), EMTALA TAG, were as follows: (1)
paragraph (e) of § 422.310 is governed Pub. L. 99–272. Congress incorporated Review EMTALA regulations; (2)
by the Privacy Act and the privacy these antidumping provisions within provide advice and recommendations to
provisions in the HIPAA. Furthermore, the Social Security Act to ensure that the Secretary concerning these
there may be occasions when we learn individuals with emergency medical regulations and their application to
from analysis of medical record review conditions are not denied essential hospitals and physicians; (3) solicit
data that some organizations have lifesaving services. Under section comments and recommendations from
misunderstood our guidance on how to 1866(a)(1)(I)(i) of the Act, a hospital that hospitals, physicians, and the public
implement an operational instruction. fails to fulfill its EMTALA obligations regarding the implementation of such
We want to be able to provide improved under these provisions may be subject regulations; and (4) disseminate
guidance to MA organizations based on to termination of its Medicare provider information concerning the application
any insights that may emerge during agreement, which would result in loss of these regulations to hospitals,
analysis of the medical record review of all Medicare and Medicaid payments. physicians, and the public. The TAG
data. Section 1867 of the Act sets forth met 7 times during its 30-month term,
In addition, we are proposing a requirements for medical screening which ended on September 30, 2007. At
technical correction to § 422.310(f) to examinations for individuals who come its meetings, the TAG heard testimony
clarify that risk adjustment data are to the hospital and request examination from representatives of physician
used not only to adjust payments to or treatment for a medical condition. groups, hospital associations, and others
jlentini on PROD1PC65 with PROPOSALS2
plans described at §§ 422.301(a)(1), The section further provides that if a regarding EMTALA issues and
(a)(2), and (a)(3) (which refer to hospital finds that such an individual concerns. During each meeting, the
coordinated care plans and private fee- has an emergency medical condition, it three subcommittees established by the
for-service plans), but also to adjust is obligated to provide that individual TAG (the On-Call Subcommittee, the
payments for ESRD enrollees and with either necessary stabilizing Action Subcommittee, and the
payments to MSA plans and Religious treatment or an appropriate transfer to Framework Subcommittee) developed
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23669
recommendations, which were then SurveyCertificationGenInfo/PMSR/ be found at the following Web site:
discussed and voted on by members of list.asp). http://www.cms.hhs.gov/
the TAG. In total, the TAG submitted 55 • That CMS clarify the intent of SurveyCertificationGenInfo/PMSR/
recommendations to the Secretary. If regulations regarding obligations under list.asp).
implemented, some of the EMTALA to receive individuals who We are considering the remaining
recommendations would require arrive by ambulance. Specifically, the recommendations of the EMTALA TAG
regulatory changes. Of the 55 TAG recommended that CMS revise a and may address them through future
recommendations developed by the letter of guidance that had been issued changes to or clarifications of the
TAG, 5 have already been implemented by the agency to clarify its position on existing regulations or the Interpretive
by CMS. A complete list of TAG the practice of delaying the transfer of Guidelines, or both.
recommendations will be available an individual from an emergency At the end of its term, the EMTALA
shortly in the Emergency Medical medical service provider’s stretcher to a TAG compiled a final report to the
Treatment and Labor Act Technical bed in a hospital’s emergency Secretary. This report includes, among
Advisory Group final report available at department. other materials, minutes from each TAG
the Web site: http://www.cms.hhs.gov/ This recommendation was adopted meeting as well as a comprehensive list
FACA/07_emtalatag.asp. The following with modification by CMS in Survey of all of the TAG’s recommendations.
recommendations have already been and Certification Letter S&C–07–20, The final report will be available shortly
implemented by CMS: which was released on April 27, 2007. at the following Web site: http://
• That CMS revise, in the EMTALA (The Survey and Certification Letter can www.cms.hhs.gov/FACA/
regulations [42 CFR 489.24(b)], the be found at the following Web site: 07_emtalatag.asp.
following sentence contained in the http://www.cms.hhs.gov/
3. Proposed Changes Relating to
definition of ‘‘labor’’: ‘‘A woman SurveyCertificationGenInfo/PMSR/
Applicability of EMTALA Requirements
experiencing contractions is in true list.asp).
• That CMS clarify that a hospital to Hospital Inpatients
labor unless a physician certifies that, While many issues pertaining to
may not refuse to accept an individual
after a reasonable time of observation, EMTALA involve individuals
appropriately transferred under
the woman is in false labor.’’ presenting to a hospital’s dedicated
EMTALA on the grounds that it (the
This recommendation was adopted receiving hospital) does not approve the emergency department, questions have
with modification in the FY 2007 IPPS method of transfer arranged by the been raised regarding the applicability
final rule (71 FR 48143). We revised the attending physician at the sending of the EMTALA requirements to
definition of ‘‘labor’’ in the regulations hospital (for example, a receiving inpatients. We have previously
at § 489.24(b) to permit a physician, hospital may not require the sending discussed the applicability of the
certified nurse-midwife, or other hospital to use an ambulance transport EMTALA requirements to hospital
qualified medical person, acting within designated by the receiving hospital). In inpatients in both the May 9, 2002 IPPS
his or her scope of practice in addition, CMS should improve its proposed rule (67 FR 31475) and the
accordance with State law and hospital communication of such clarifications September 9, 2003 stand alone final rule
bylaws, to certify that a woman is with its regional offices. on EMTALA (68 FR 53243). As we
experiencing false labor. We issued This recommendation was adopted stated in both of the aforementioned
Survey and Certification Letter S&C–06– and implemented by CMS in Survey rules, in 1999, the United States
32 on September 29, 2006, to clarify the and Certification Letter S&C–07–20, Supreme Court considered a case
regulation change. (The Survey and which was released on April 27, 2007. (Roberts v. Galen of Virginia, 525 U.S.
Certification Letter can be found at the (The Survey and Certification Letter can 249 (1999)) that involved, in part, the
following Web site: http:// be found at the following Web site: question of whether EMTALA applies to
www.cms.hhs.gov/ http://www.cms.hhs.gov/ inpatients in a hospital. In the context
SurveyCertificationGenInfo/PMSR/ SurveyCertificationGenInfo/PMSR/ of that case, the United States Solicitor
list.asp). list.asp). General advised the Court that HHS
• That hospitals with specialized • That CMS strike the language in the would develop a regulation clarifying its
capabilities (as defined in the EMTALA Interpretive Guidelines (CMS State position on that issue. In the 2003 final
regulations) that do not have a Operations Manual, Appendix V) that rule, CMS took the position that a
dedicated emergency department be addresses telehealth/telemedicine hospital’s obligation under EMTALA
bound by the same responsibilities (relating to the regulations at ends when that hospital, in good faith,
under EMTALA as hospitals with § 489.24(j)(1)) and replace it with admits an individual with an unstable
specialized capabilities that do have a language that clarifies that the treating emergency medical condition as an
dedicated emergency department. physician ultimately determines inpatient to that hospital. In that rule,
This recommendation was adopted in whether an on-call physician should CMS noted that other patient safeguards
the FY 2007 IPPS final rule (71 FR come to the emergency department and protected inpatients, including the CoPs
48143). We added language at that the treating physician may use a as well as State malpractice law.
§ 489.24(f) that makes explicit the variety of methods to communicate with However, in the 2003 final rule, CMS
current policy that all Medicare- the on-call physician. A potential did not directly address the question of
participating providers with specialized violation occurs only if the treating whether EMTALA’s ‘‘specialized care’’
capabilities are required to accept an physician requests that the on-call requirements (section 1867(g) of the
appropriate transfer if they have the physician come to the emergency Act) applied to inpatients.
capacity to treat the individual. We department and the on-call physician As noted in section IV.I.2. of this
jlentini on PROD1PC65 with PROPOSALS2
issued Survey and Certification Letter refuses. preamble, the EMTALA TAG has
S&C–06–32 on September 29, 2006, to This recommendation was adopted developed a set of recommendations to
clarify the regulation change. (The and implemented by CMS in Survey the Secretary. One of those
Survey and Certification Letter can be and Certification Letter S&C–07–23, recommendations calls for CMS to
found at the following Web site: http:// which was released on June 22, 2007. revise its regulations to address the
www.cms.hhs.gov/ (The Survey and Certification Letter can situation of an individual who: (1)
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23670 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Presents to a hospital that has a which an unstabilized individual is in need of specialized care to stabilize
dedicated emergency department and is being appropriately transferred to his or her emergency medical condition
determined to have an unstabilized receive specialized care would may raise concerns among the provider
emergency medical condition; (2) is seemingly contradict the intent of community that such a clarification in
admitted to the hospital as an inpatient; section 1867(g) of the Act to ensure that policy could hypothetically result in an
and (3) the hospital subsequently hospitals with specialized capabilities increase in the number of transfers.
determines that stabilizing the provide medical treatment to However, the intention of this proposed
individual’s emergency medical individuals with emergency medical clarification is not to encourage patient
condition requires specialized care only conditions to stabilize their conditions. dumping to hospitals with specialized
available at another hospital. We also note that, as we discussed in capabilities. Rather, even if the hospital
We believe that the obligation of the preamble of the September 9, 2003 with specialized capabilities has an
EMTALA does not end for all hospitals stand alone final rule, once a hospital EMTALA obligation to accept an
once an individual has been admitted as has admitted an individual as an individual who was an inpatient at the
an inpatient to the hospital where the inpatient, the individual is protected admitting hospital, the admitting
individual first presented with a under the Medicare CoPs and may also hospital transferring the individual
medical condition that was determined have additional protections under State should take all steps necessary to ensure
to be an emergency medical condition. law. Accordingly, we believe it is that it is providing needed treatment
Rather, once the individual is admitted, consistent with the intent of EMTALA within its capabilities prior to
to limit its protections to individuals transferring the individual. This means
admission only impacts on the
who need them most; for example, that an individual with an unstabilized
EMTALA obligation of the hospital
individuals who present to a hospital emergency medical condition should be
where the individual first presented.
but may not have been formally transferred only when the capabilities of
(Throughout this section of the
admitted as patients and thus are not the admitting hospital have been
preamble of this proposed rule, we will
covered by other protections applicable exceeded.
refer to the hospital where the
to inpatients of the hospital. As noted Accordingly, we are proposing to
individual first presented as the
above, once the individual is admitted, revise § 489.24(f) by adding to the
‘‘admitting hospital.’’) Section 1867(g)
the CoPs apply to the admitting existing text a provision that specifies
of the Act states: ‘‘Nondiscrimination—
hospital’s care of that individual. A that paragraph (f) also applies to an
A participating hospital that has hospital that fails to provide treatment individual who has been admitted
specialized capabilities or facilities to such individuals could face under paragraph (d)(2)(i) of the section
(such as burn units, shock-trauma units, termination of its Medicare provider and who has not been stabilized.
neonatal intensive care units, or (with agreement for a violation of the CoPs. While we are not including the
respect to rural areas) regional referral However, these CoPs do not, of course, following in our proposed clarification,
centers as identified by the Secretary in apply to a hospital with specialized we are seeking public comments on
regulation) shall not refuse to accept an capabilities to which the individual whether the EMTALA obligation
appropriate transfer of an individual might be transferred unless and until imposed on hospitals with specialized
who requires such specialized the individual is formally admitted as a capabilities to accept appropriate
capabilities or facilities if the hospital patient at that hospital. Therefore, in transfers should apply to a hospital with
has the capacity to treat the individual.’’ order to ensure an individual the specialized capabilities in the case of an
Section 1867(g) of the Act therefore protections intended by the EMTALA individual who had a period of stability
requires a receiving hospital with statute, especially section 1867(g) of the during his or her stay at the admitting
specialized capabilities to accept a Act (obligating a hospital with hospital and is in need of specialized
request to transfer an individual with an specialized capabilities to accept an care available at the hospital with
unstable emergency medical condition appropriately transferred individual if it specialized capabilities. CMS takes
as long as the hospital has the capacity has the capacity to treat that individual), seriously its duty to protect patients
to treat that individual, regardless of we believe it is appropriate to propose with emergency medical conditions as
whether the individual had been an to clarify that section 1867(g) of the Act required by EMTALA. Thus, we are
inpatient at the admitting hospital. continues to apply so as to protect even seeking public comments as to whether,
Furthermore, in the September 9, 2003 an individual who has been admitted as with respect to the EMTALA obligation
final rule (68 FR 53263), we amended an inpatient to the admitting hospital on the hospital with specialized
the regulations at § 489.24(d)(2)(i) to who has not been stable since becoming capabilities, it should or should not
state: ‘‘If a hospital has screened an an inpatient. We believe that this matter if an individual who currently
individual under paragraph (a) of this proposed clarification is necessary to has an unstabilized emergency medical
section and found the individual to ensure that EMTALA protections are condition (which is beyond the
have an emergency medical condition, continued for individuals who are not capability of the admitting hospital) (1)
and admits that individual in good faith otherwise protected by the hospital remained unstable after coming to the
in order to stabilize the emergency CoPs. (We note that this proposed hospital emergency department or (2)
medical condition, the hospital has clarification is consistent with the subsequently had a period of stability
satisfied its special responsibilities EMATLA TAG’s recommendation that after coming to the hospital emergency
under this section with respect to that EMTALA does not apply when an department.
individual’’ (emphasis added). We did individual is admitted to the hospital In summary, to implement the
not intend for the regulation to end the for an elective procedure and recommendation by the EMTALA TAG
EMTALA obligation for any other subsequently develops an emergency and clarify our policy regarding the
jlentini on PROD1PC65 with PROPOSALS2
hospital to which the individual may medical condition.) applicability of EMTALA to hospital
appropriately be transferred to stabilize We recognize that this proposed inpatients, we are proposing to amend
his or her emergency medical condition. clarification that EMTALA applies to a § 489.24(f) to add a provision to state
Permitting inpatient admission at the hospital with specialized capabilities that when an individual covered by
admitting hospital to end EMTALA when an inpatient (who presented to the EMTALA was admitted as an inpatient
obligations for another hospital to admitting hospital under EMTALA) is and remains unstabilized with an
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23671
emergency medical condition, a obligations, including calling for an physicians, including specialists and
receiving hospital with specialized annual plan by the hospital and medical subspecialists, are not required to be on
capabilities has an EMTALA obligation staff for on-call coverage that would call at all times, and that the hospital
to accept that individual, assuming that include an assessment of factors such as must have policies and procedures to be
the transfer of the individual is an the hospital’s capabilities and services, followed when a particular specialty is
appropriate transfer and the community need for emergency not available or the on-call physician
participating hospital with specialized department services as indicated by cannot respond because of situations
capabilities has the capacity to treat the emergency department visits, emergent beyond his or her control. We expected
individual. transfers, physician resources, and past these clarifications would help to
performance of previous on-call plans. improve access to physician services for
4. Proposed Changes to the EMTALA The TAG also recommended that a all hospital patients by permitting
Physician On-Call Requirements hospital have a backup plan for viable hospitals flexibility to determine how
a. Relocation of Regulatory Provisions patient care options when an on-call best to maximize their available
During its term, the EMTALA TAG physician is not available, including physician resources. Furthermore, we
dedicated a significant portion of its such factors as telemedicine, other staff expected that these clarifications would
discussion to a hospital’s physician on- physicians, transfer agreements, and permit hospitals to continue to attract
call obligations under EMTALA and regional or community call physicians to serve on their medical
made several recommendations to the arrangements. While community call staffs, thereby continuing to provide
Secretary regarding physician on-call arrangements are discussed below, we services to all patients, including those
intend to address the remainder of the individuals who are covered by
requirements that are included in its
TAG recommendations at a later date. EMTALA.
final report (will be available shortly at
the Web site: http://www.cms.hhs/gov/ b. Shared/Community Call As part of its recommendations
FACA/07_emtalatag.asp). The TAG concerning physician on-call
As noted in the previous section,
recommended that CMS move the requirements, the EMTALA TAG
section 1866(a)(1)(I)(iii) of the Act
regulation discussing the obligation to recommended that hospitals be
states, as a requirement for participation
maintain an on-call list from the permitted to participate in ‘‘community
in the Medicare program, that a hospital
EMTALA regulations at § 489.24(j)(1) to call.’’ Specifically, the language of the
must keep a list of physicians who are
the regulations implementing provider recommendation states: ‘‘The TAG
on call for duty after the initial
agreements at § 489.20(r)(2). We agree examination to provide treatment recommends that CMS clarify its
with the TAG’s recommendation. The necessary to stabilize an individual with position regarding shared or community
requirement to maintain an on-call list an emergency medical condition. If a call: that such community call
is found at section 1866(a)(1)(I)(iii) of physician on the list is called by a arrangements are acceptable if the
the Act, the section of the Act that refers hospital to provide stabilizing treatment hospitals involved have formal
to provider agreements. Section 1867 of and either fails or refuses to appear agreements recognized in their policies
the Act, which outlines the EMTALA within a reasonable period of time, the and procedures, as well as backup
requirements, makes no mention of the hospital and that physician may be in plans. It should also be clarified that a
requirement to maintain an on-call list. violation of EMTALA as provided for community call arrangement does not
To implement the EMTALA TAG’s under section 1867(d)(1)(C) of the Act. remove a hospital’s obligation to
recommendation, we are proposing to Thus, hospitals are required to maintain perform an MSE [medical screening
delete the provision relating to a list of on-call physicians, and examination].’’ The TAG also
maintaining a list of on-call physicians physicians or hospitals, or both, may be recommended in a subsequent
from § 489.24(j)(1). We note that a held responsible under the EMTALA recommendation that ‘‘A hospital may
provision for an on-call physician list is statute if a physician who is on call fails satisfy its on-call coverage obligation by
already included in the regulations as a or refuses to appear within a reasonable participation in an approved
hospital provider agreement period of time. community/regional call coverage
requirement at § 489.20(r)(2). We are In the May 9, 2002 proposed rule (67 program. (CMS to determine appropriate
proposing to incorporate the language of FR 31471), we stated that we were approval process).’’
§ 489.24(j)(1) as replacement language aware of hospitals’ increasing concerns We believe that community call (as
for the existing § 489.20(r)(2) and amend regarding their physician on-call described below) would afford
the regulatory language to make it more requirements. Specifically, we noted additional flexibility to hospitals
consistent with the statutory language that we were aware of reports of providing on-call services and improve
found at section 1866(a)(1)(I)(iii) of the physicians, particularly specialty access to specialty physician services
Act. Proposed revised § 489.20(r)(2) physicians, severing their relationships for individuals in an emergency
would read: ‘‘An on-call list of with hospitals because of on-call department. Therefore, we are
physicians on its medical staff available obligations, especially when those proposing to amend our regulations at
to provide treatment necessary after the physicians belong to more than one § 489.24(j) to provide that hospitals may
initial examination to stabilize hospital medical staff. We further noted comply with the on-call list requirement
individuals with emergency medical that physician attrition from these specified at § 489.20(r)(2) (under our
conditions who are receiving services medical staffs could result in hospitals proposed revision), by participating in a
required under § 489.24 in accordance having no specialty physician service formal community call plan so long as
with the resources available to the coverage for their patients. In the the plan meets the elements outlined
hospital; and’’. These proposed changes September 9, 2003 final rule (68 FR below. We are further proposing to
jlentini on PROD1PC65 with PROPOSALS2
would make the regulations consistent 53264), we clarified the regulations at revise the regulations to state that,
with the statutory basis for maintaining § 489.24(j) to permit on-call physicians notwithstanding participation in a
an on-call list. to schedule elective surgery during the community call plan, hospitals are still
The EMTALA TAG made additional time that they are on call and to permit required to perform medical screening
recommendations regarding how a on-call physicians to have simultaneous examinations on individuals who
hospital would satisfy its on-call list on-call duties. We also specified that present seeking treatment and to
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23672 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
provide for an appropriate transfer • Hospitals participating in the community call plan must have written
when appropriate. community call plan would engage in policies and procedures in place to
We propose ‘‘community call,’’ to be an analysis of the specialty on-call respond to situations in which the on-
a formal on-call plan that permits a needs of the community for which the call physician is unable to respond due
specific hospital in a region to be plan is effective. to situations beyond his or her control.
designated as the on-call facility for a • The community call plan would We are further proposing that a hospital
specific time period, or for a specific include a statement specifying that even would still be responsible for
service, or both. For example, if there if an individual arrives at the hospital performing medical screening
are two hospitals that choose to that is not designated as the on-call examinations on individuals who
participate in community call, Hospital hospital, that hospital still has an present to the hospital seeking treatment
A could be designated as the on-call EMTALA obligation to provide a and conducting appropriate transfers,
facility for the first 15 days of each medical screening examination and regardless of which hospital has on-call
month and Hospital B could be stabilizing treatment within its responsibilities on a particular day.
designated as the on-call facility for the capability, and hospitals participating in
rest of each month. Alternatively, community call must abide by the 5. Proposed Technical Change to
Hospital A could be designated as on- EMTALA regulations governing Regulations
call for cases requiring specialized appropriate transfers. In the FY 2008 IPPS final rule with
interventional cardiac care, while • There would be an annual comment period (72 FR 47413), we
Hospital B could be designated as on- reassessment of the community call revised § 489.24(a)(2) (which refers to
call for neurosurgical cases. We plan by the participating hospitals. the nonapplicability of the EMTALA
anticipate that hospitals and their Proposed revised § 489.24(j) would provisions in an emergency area during
communities would have the flexibility read ‘‘Availability of on-call physicians. an emergency period) to conform it to
to develop a plan that reflects their local In accordance with the on-call list the changes made to section 1135 of the
resources and needs. Such a community requirements specified in § 489.20(r)(2), Act by the Pandemic and All-Hazards
on-call plan will allow various a hospital must have written policies Preparedness Act. When we made the
physicians in a certain specialty in the and procedures in place—(1) To change to the regulations, we
aggregate to be on continuous call (24 respond to situations in which a inadvertently left out language
hours a day, 7 days a week), without particular specialty is not available or consistent with the following statutory
putting a continuous call obligation on the on-call physician cannot respond language found in section 1135:
any one physician. We note that because of circumstances beyond the ‘‘pursuant to an appropriate State
generally if an individual arrives at a physician’s control; and (2) To provide emergency preparedness plan; or in the
hospital other than the designated on- that emergency services are available to case of a public health emergency
call facility, is determined to have an meet the needs of individuals with described in subsection (g)(1)(B) that
unstabilized emergency medical emergency medical conditions if a involves a pandemic infectious disease,
condition, and requires the services of hospital elects to—(i) Permit on-call pursuant to a State pandemic
an on-call specialist, the individual physicians to schedule elective surgery preparedness plan or a plan referred to
would be transferred to the designated during the time that they are on call; (ii) in clause (i), whichever is applicable in
on-call facility in accordance with the Permit on-call physicians to have the State.’’ We also inadvertently left
community call plan. simultaneous on-call duties; and (iii) out the phrase in section 1135 ‘‘during
As noted above, we are proposing that Participate in a formal community call an emergency period’’ when we state
a community call plan must be a formal plan. Notwithstanding participation in a the nonapplicability of the sanctions in
plan among the participating hospitals. community call plan, hospitals are still an emergency area. We are proposing to
While we do not believe it is necessary required to perform medical screening revise the language at § 489.24(a)(2) to
for the formal community call plan to be examinations on individuals who include the aforementioned language to
subject to preapproval by CMS, if an present seeking treatment and to conform the regulation text to the
EMTALA complaint investigation is conduct appropriate transfers. The statutory language. Proposed revised
initiated, the plan will be subject to formal community call plan must § 489.24(a)(2) would read as follows:
review and enforcement by CMS. We include the following elements: ‘‘Nonapplicability of provisions of this
are proposing that, at a minimum, [proposed elements noted above in the section. Sanctions under this section for
hospitals must include the following bullets are included in regulations an inappropriate transfer during a
elements when devising a formal text].’’ national emergency or for the direction
community call plan: We welcome public comments on the or relocation of an individual to receive
• The community call plan would proposed elements of the formal medical screening at an alternate
include a clear delineation of on-call community call plan noted above. We location pursuant to an appropriate
coverage responsibilities, that is, when are also soliciting public comments on State emergency preparedness plan or,
each hospital participating in the plan is whether individuals believe it is in the case of a public health emergency
responsible for on-call coverage. important that, in situations where there that involves a pandemic infectious
• The community call plan would is a governing State or local agency that disease, pursuant to a State pandemic
define the specific geographic area to would have authority over the preparedness plan do not apply to a
which the plan applies. development of a formal community hospital with a dedicated emergency
• The community call plan would be call plan, the plan be approved by that department located in an emergency
signed by an appropriate representative agency. In summary, we are proposing area during an emergency period, as
of each hospital participating in the that, as part of the obligation to have an specified in section 1135(g)(1) of the
jlentini on PROD1PC65 with PROPOSALS2
plan. on-call list, hospitals may choose to Act. A waiver of these sanctions is
• The community call plan would participate in community call, provided limited to a 72-hour period beginning
ensure that any local and regional EMS that the formal community call plan upon the implementation of a hospital
system protocol formally includes includes, at a minimum, the elements disaster protocol, except that, if a public
information on community on-call noted in bullets above. Additionally, health emergency involves a pandemic
arrangements. each hospital participating in the infectious disease (such as pandemic
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23673
influenza), the waiver will continue in to hospital DRG payments for avoidable conditions. Another focus of efforts to
effect until the termination of the readmissions, (2) adjustments to prevent readmissions could be patients
applicable declaration of a public health hospital DRG payments through a with multiple chronic conditions, who
emergency, as provided for by section performance-based payment may be at the highest risk to experience
1135(e)(1)(B) of the Act.’’ methodology, and (3) public reporting of readmissions.
readmission rates. We note that either
J. Application of Incentives To Reduce 3. Accountability
type of adjustment to hospital payments
Avoidable Readmissions to Hospitals
for readmissions would likely require In the assignment of accountability for
1. Introduction new statutory authority for the Medicare readmissions, risk adjustment of
A significant portion of Medicare program. We are seeking public measurement data is one consideration
spending—$15 billion each year—is comments on all of the ideas presented of fairness; however, other factors must
related to hospital readmissions. in this section. also be considered, including
According to a 2005 MedPAC 2. Measurement avoidability and shared accountability.
analysis ,17 nearly 18 percent of Most clinicians would agree that a goal
Routine, valid, and reliable of zero readmissions may not be
beneficiaries who are discharged from
measurement of hospital-specific rates appropriate, as an extremely low rate of
the hospital are readmitted within 30
of readmissions would be a prerequisite readmissions could indicate restricted
days, resulting in approximately 2
to any method of applying incentives for access to needed medical services,
million readmissions. By MedPAC’s
reducing hospital readmissions. overuse of hospital resources during the
method, over 13 percent of 30-day
Measurement data should be initial hospitalization (for example,
hospital readmissions and an associated
meaningful and actionable for hospitals prolonged length of stay), or excessive
$12 billion in spending (4⁄5 of all
and should be fair to encourage trust intensity of post-acute care services.
Medicare spending for readmissions)
and engagement in the effort. Risk Adequate risk adjustment could help to
were found to be potentially avoidable.
adjustment of measurement data is elucidate the avoidability of
Beyond cost considerations,
necessary to account for patientπspecific readmissions by identifying an expected
readmissions may reflect poor quality of
factors that influence the likelihood of readmission rate for a given patient or
care and affect beneficiaries’’ quality of
readmission, such as age, disease patient population.
life. Though not all readmissions are
severity, and comorbidities. Shared accountability is another
avoidable, hospitals should share Another important consideration in
accountability for readmission rates that important consideration. Hospitals are
measurement of readmission rates is the
could be much lower through the clearly accountable for the care
time period from discharge to
application of evidence-based best provided during hospitalization and can
readmission (for example, 7, 15, 30, or
practices. Interventions that have been also affect the quality of care provided
90 days). In section IV.B. of the
shown to reduce readmissions include after the hospitalization, but hospitals
preamble of this proposed rule,
better quality of care during the are not the only accountable entity. Both
measures of risk-adjusted 30-day
hospitalization, more complete care readmission rates are proposed for the during and after hospitalization,
plans, emphasis on coordination of care RHQDAPU program. The 9th Scope of physicians and other health
at the point of transitions to home or Work for Medicare Quality professionals share accountability for
postacute care, better use of after- Improvement Organizations (QIO 9th the quality of care. Other provider
hospital care, and more active SOW) also includes 30-day readmission entities, including skilled nursing
involvement of patients and caregivers measures for communities. facilities, rehabilitation facilities, home
in decision making. Measures should be aligned across health agencies, and end-stage renal
The application of incentives to settings of care. Hospitals are not the disease facilities, also share
reduce hospital readmissions, including only providers that affect the occurrence accountability for avoidable
payment and public reporting readmissions. Medicare beneficiaries
of readmissions. For example, the care
approaches, could promote the adoption themselves and their caregivers and
delivered by SNFs and HHAs also has
and development of best practice social support systems play important
an important impact on whether a
interventions for averting avoidable roles in avoiding readmissions,
beneficiary is readmitted. Data from
readmissions, resulting in higher quality particularly when beneficiaries have
aligned readmissions measures,
of care for Medicare beneficiaries and been discharged to home.
applicable to various settings of care,
reduction in unnecessary costs for the Assignment of accountability also
would provide better information about
program. Under the current payment requires consideration of situations
care coordination problems within and
system, readmissions are financially where the patient presents for
between settings. Alignment of
rewarding for hospitals. Application of readmission with a different diagnosis
readmissions measures would also
payment incentives to encourage or presents to a different hospital. If the
facilitate more powerful application of
reduction of avoidable readmissions
incentives across Medicare’s payment
could help address unintended 18 Coleman, E.A., C. Parry, S. Chalmers, et al.
systems.
incentives in the current payment 2006. The care transitions intervention: Results of
Another consideration is whether to a randomized controlled trial. Archives of Internal
system.
focus on all readmissions or to focus on Medicine, 166 (September 25): 1822–1828.
In this section, following discussion
those that are known to be higher cost, 19 Coleman, E.A., J.D. Smith, R. Devbani, et al.
of readmission issues related to 2005. Posthospital medication discrepancies:
more easily preventable, or most
measurement, accountability, and Prevalence and contributing factors. Archives of
frequently occurring. For example,
interventions, we are presenting three Internal Medicine 165, (September 12): 1842–1847.
numerous hospitals have successfully
jlentini on PROD1PC65 with PROPOSALS2
Report to Congress: Promoting Greater Efficiency in heart failure readmissions may be more Reducing readmissions for heart failure patients:
Medicare. June 2007, Chapter 5, page 103. costly than readmissions for other Continued
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23674 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
locus of accountability were at the Demonstration and have contributed to based on patient-specific risk factors
hospital level, a second hospital should improvements in the quality and cost- and on the apportionment of shared
not be held accountable for a efficiency of care provided to Medicare accountability among the involved
readmission resulting from a first beneficiaries. For example, the entities.
hospital’s lack of adherence to evidence- University of Michigan Faculty Group A variation of this approach could be
based best practices for averting Practice’s transitional care call-back adjustment of all hospital payments for
readmissions. If the locus of program contacts Medicare patients readmissions, nationwide or by some
accountability were at the community discharged from the emergency regional designation, based on aggregate
level, then shared accountability could department and acute care hospital to information about avoidable
encourage hospitals to work together to address gaps in care during the readmissions for the entire relevant
reduce readmissions. transition between care settings. The Medicare population (national or
program provides short-term care regional) under typical circumstances.
4. Interventions coordination with linkages to visiting Under this approach, hospitals would
A number of interventions have been nurse and community services, as well receive less Medicare payment for
identified as best practices for averting as coordination with primary care and readmissions for conditions with lower
avoidable specialty clinics. The Everett Clinic expected rates of readmission and less
readmissions.18,19,20,21,22,23,24,25,26 Some utilizes hospital coaches to guide shared accountability.
of these evidence-based interventions patients and caregivers through Potential unintended consequences
are listed below: complicated care processes during resulting from a financial incentive to
• Better, safer care during the hospital stays and on discharge. The avert readmissions also need to be
hospitalization. clinic proactively reaches out to considered. For example, hospitals
• Improved communication among recently hospitalized patients to assure could begin discharging patients to
providers and with the patient and that they have a physician followup settings that provide more intensive
caregivers. visit within 10 days after discharge to postacute care to avoid readmissions,
• Care planning that begins with address any unresolved or new health thereby potentially driving up total
assessment at admission. problems. costs for episodes of care and total
• Clear discharge instructions, with CMS is considering strategies for Medicare spending. As another example
specific attention to medication distributing a discharge checklist that of potential unintended consequences,
management. the agency developed to help hospitals could begin to resist medically
• Shared accountability for care beneficiaries and their caregivers necessary readmissions from postacute
coordination, with attention to prepare for discharge from a hospital or care providers, creating an access
transitions and hand-offs. nursing home. The checklist includes a problem.
• Discharge to a proper setting of range of issues to consider and address
care. 6. Financial Incentive: Performance-
with physicians and other health care Based Payment Adjustment
• Better, safer care in the post-acute providers to facilitate a smooth
setting of care. transition to home or postacute care The second approach presented for
• Appropriate use of palliative care setting. In addition, the checklist comment is adjustment to hospital MS–
and honest planning for the likely provides information about supportive DRG payments using a performance-
course. home and community-based services. based payment methodology, such as
• Timely physician follow up visits. The QIO 9th SOW includes a theme the Medicare Hospital VBP Plan
• Active involvement of patients and entitled Patient Pathways (Care referenced in section IV.C. of the
their caregivers. Transitions). The goal of this theme is preamble of this proposed rule and
Interventions such as these have been to measurably improve the quality of available at: http://www.cms.hhs.gov/
employed by several participants in care for Medicare beneficiaries who AcuteInpatientPPS/downloads/
CMS Physician Group Practice transition among care settings, resulting HospitalVBPPlan
in reduced readmissions and replicable RTCFINALSUBMITTED2007.pdf. The
Hackensack University Medical Center. Available at intent of the VBP Plan methodology is
http://www.ihi.org.
strategies to sustain reduced
22 Institute for Healthcare Improvement. 2004b. readmission rates. The QIO 8th SOW to promote adherence to evidence-based
The MedProvider inpatient care unit-congestive included initiatives to reduce avoidable best practices in the delivery of care and
heart failure project. Available at: http:// readmissions of home health patients. to provide rewards for those who are
www.ihi.org. successful in improving their measured
23 Lappe, J.M., J.B. Muhlestein, D.L. Lappe, et al. 5. Financial Incentive: Direct Payment performance. Implementation of the
2004. Improvements in 1-year cardiovascular Adjustment VBP methodology would require new
clinical outcomes associated with a hospital-based
discharge medication program. Annals of Internal The first of three approaches statutory authority for the Medicare
Medicine, 141, no.6 (September 21): 446–453. presented for comment is direct program.
24 Naylor, M.D., D. Brooton, R. Campbell, et al.
adjustment to hospital DRG payments Under the VBP Plan, measures of
1999. Comprehensive discharge planning and home for readmissions. This approach would clinical processes of care, patient
follow-up of hospitalized elders. Journal of the
American Medical Association, 281, no.7 (February likely require new statutory authority experience (HCAHPS), and outcomes
17): 613–620. for the Medicare program. In section (30-day mortality) would be scored and
25 VanSuch, M., J.M. Naessens, R.J. Stroebel, et al. II.F. of the preamble of this translated into an incentive payment.
2006. Effect of discharge instructions on proposed rule, we discuss direct These measures of process, outcome,
readmission of hospitalized patients with heart adjustments to MS–DRG payment for and patient-centeredness address areas
failure: Do all of the Joint Commission on
selected preventable HACs. Similarly, a of quality that are important to reducing
jlentini on PROD1PC65 with PROPOSALS2
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23675
assessment model. In addition, other 2004) to test the feasibility and reasonable cost or a target amount in
measures of care coordination that advisability of establishing ‘‘rural subsequent cost reporting periods. The
indirectly address readmissions could community hospitals’’ for Medicare target amount in the second cost
also be included. payment purposes for covered inpatient reporting period is defined as the
The direct adjustment approach and hospital services furnished to Medicare reasonable costs of providing covered
the VBP Plan approaches for applying beneficiaries. A rural community inpatient hospital services in the first
financial incentives to the reduction of hospital, as defined in section cost reporting period, increased by the
avoidable readmissions could be 410A(f)(1), is a hospital that— inpatient prospective payment update
implemented separately or in • Is located in a rural area (as defined factor (as defined in section
combination. in section 1886(d)(2)(D) of the Act) or is 1886(b)(3)(B) of the Act) for that
treated as being located in a rural area particular cost reporting period. The
7. Nonfinancial Incentive: Public
under section 1886(d)(8)(E) of the Act; target amount in subsequent cost
Reporting • Has fewer than 51 beds (excluding reporting periods is defined as the
A third approach presented for beds in a distinct part psychiatric or preceding cost reporting period’s target
comment is public reporting of hospital- rehabilitation unit) as reported in its amount, increased by the inpatient
specific, risk adjusted readmission rates. most recent cost report; prospective payment update factor (as
The Administration’s Value-Driven • Provides 24-hour emergency care defined in section 1886(b)(3)(B) of the
Health Care initiative, which stems from services; and Act) for that particular cost reporting
the President’s Executive Order • Is not designated or eligible for period.
Promoting Quality and Efficient Health designation as a CAH. Covered inpatient hospital services
Care in Federal Government Health Care Section 410A(a)(4) of Pub. L. 108–173 are inpatient hospital services (defined
Programs, calls for Federal agencies to states that no more than 15 such in section 1861(b) of the Act), and
make health care quality and cost hospitals may participate in the include extended care services
information more transparent. Health demonstration program. furnished under an agreement under
care consumers, including Medicare As we indicated in the FY 2005 IPPS section 1883 of the Act.
beneficiaries, and their providers and final rule (69 FR 49078), in accordance Section 410A of Pub. L. 108–173
caregivers need better information to with sections 410A(a)(2) and (a)(4) of requires that, ‘‘in conducting the
support more informed decision making Pub. L. 108–173 and using 2002 data demonstration program under this
about their care. The public reporting of from the U.S. Census Bureau, we section, the Secretary shall ensure that
readmission rates would likely not identified 10 States with the lowest the aggregate payments made by the
require new statutory authority for the population density from which to select Secretary do not exceed the amount
Medicare program. hospitals: Alaska, Idaho, Montana, which the Secretary would have paid if
The Hospital Compare Web site could Nebraska, Nevada, New Mexico, North the demonstration program under this
be used to report readmission rates Dakota, South Dakota, Utah, and section was not implemented.’’
along with the other quality and cost of Wyoming (Source: U.S. Census Bureau Generally, when CMS implements a
care parameters displayed on that site. Statistical Abstract of the United States: demonstration program on a budget
Public reporting has been demonstrated 2003). Nine rural community hospitals neutral basis, the demonstration
to be a strong non-financial incentive located within these States are currently program is budget neutral in its own
with a competitive effect, as hospitals participating in the demonstration terms; in other words, the aggregate
appropriately focus on maintaining and program. (Of the 13 hospitals that payments to the participating providers
enhancing their reputations as providers participated in the first 2 years of the do not exceed the amount that would be
of high quality of care. The VBP Plan demonstration program, 4 hospitals paid to those same providers in the
envisions public reporting in concert located in Nebraska have become CAHs absence of the demonstration program.
with the VBP financial incentive, but and have withdrawn from the program.) This form of budget neutrality is viable
the public reporting incentive could be In a notice published in the Federal when, by changing payments or aligning
applied regardless of statutory authority Register on February 6, 2008 (73 FR incentives to improve overall efficiency,
to implement the VBP Plan. 6971 through 6973), we announced a or both, a demonstration program may
solicitation for up to six additional reduce the use of some services or
8. Conclusion hospitals to participate in the eliminate the need for others, resulting
The purpose of this section is to demonstration program. Hospitals that in reduced expenditures for the
solicit and encourage public comments enter the demonstration under this demonstration program’s participants.
on considerations and options for solicitation will be able to participate These reduced expenditures offset
applying incentives to reduce avoidable for no more than 2 years. The February increased payments elsewhere under
hospital readmissions. We welcome 6, 2008 notice specifies the eligibility the demonstration program, thus
public comments on readmission issues requirements for the demonstration ensuring that the demonstration
related to measurement, accountability, program. program as a whole is budget neutral or
and interventions, as well as on Under the demonstration program, yields savings. However, the small scale
potential approaches to applying participating hospitals are paid the of this demonstration program, in
financial and nonfinancial incentives to reasonable costs of providing covered conjunction with the payment
reduce avoidable readmissions. inpatient hospital services (other than methodology, makes it extremely
services furnished by a psychiatric or unlikely that this demonstration
K. Rural Community Hospital rehabilitation unit of a hospital that is program could be viable under the usual
Demonstration Program a distinct part), applicable for form of budget neutrality. Specifically,
jlentini on PROD1PC65 with PROPOSALS2
In accordance with the requirements discharges occurring in the first cost cost-based payments to participating
of section 410A(a) of Pub. L. 108–173, reporting period beginning on or after small rural hospitals are likely to
the Secretary has established a 5-year the October 1, 2004 implementation increase Medicare outlays without
demonstration program (beginning with date of the demonstration program. producing any offsetting reduction in
selected hospitals’ first cost reporting Payments to the participating hospitals Medicare expenditures elsewhere.
period beginning on or after October 1, will be the lesser amount of the Therefore, a rural community hospital’s
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23676 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
participation in this demonstration based methodology to a prospective after the transition period, eligible
program is unlikely to yield benefits to methodology (based fully on the Federal hospitals receive additional payments
the participant if budget neutrality were rate). under the special exceptions provisions
to be implemented by reducing other FY 2001 was the last year of the 10- at § 412.348(g), which guarantees all
payments for these providers. year transition period established to eligible hospitals a minimum payment
In order to achieve budget neutrality phase in the IPPS for hospital inpatient of 70 percent of its Medicare allowable
for this demonstration program for FY capital-related costs. For cost reporting capital-related costs provided that
2009, we are proposing to adjust the periods beginning in FY 2002, capital special exceptions payments do not
national inpatient PPS rates by an IPPS payments are based solely on the exceed 10 percent of total capital IPPS
amount sufficient to account for the Federal rate for most acute care payments. Special exceptions payments
added costs of this demonstration hospitals (other than hospitals receiving may be made only for the 10 years from
program. We are proposing to apply certain exception payments and certain the cost reporting year in which the
budget neutrality across the payment new hospitals). The basic methodology hospital completes its qualifying
system as a whole rather than merely for determining capital prospective project, and the hospital must have
across the participants in this payments using the Federal rate is set completed the project no later than the
demonstration program. As we forth in § 412.312. For the purpose of hospital’s cost reporting period
discussed in the FY 2005, FY 2006, FY calculating payments for each discharge, beginning before October 1, 2001. Thus,
2007 and FY 2008 IPPS final rules (69 the standard Federal rate is adjusted as an eligible hospital may receive special
FR 49183; 70 FR 47462; 71 FR 48100; follows: exceptions payments for up to 10 years
and 72 FR 47392), we believe that the (Standard Federal Rate) × (DRG beyond the end of the capital IPPS
language of the statutory budget Weight) × (Geographic Adjustment transition period. Hospitals eligible for
neutrality requirements permits the Factor (GAF)) × (Large Urban Add-on, if special exceptions payments are
agency to implement the budget applicable) × (COLA for hospitals required to submit documentation to the
neutrality provision in this manner. For located in Alaska and Hawaii) × (1 + intermediary indicating the completion
FY 2009, using data from the cost Capital DSH Adjustment Factor + date of their project. (For more detailed
reports from each of the nine hospitals’ Capital IME Adjustment Factor, if information regarding the special
first year of participation in the applicable). exceptions policy under § 412.348(g),
demonstration program, that is, cost Hospitals also may receive outlier we refer readers to the FY 2002 IPPS
reports for years beginning in CY 2005, payments for those cases that qualify final rule (66 FR 39911 through 39914)
and estimating the cost of six additional under the threshold established for each and the FY 2003 IPPS final rule (67 FR
hospitals based on these data, we fiscal year as specified in § 412.312(c) of 50102).)
estimate that the additional cost would the regulations.
2. New Hospitals
be $32,011,849. (In the final rule, we 1. Exception Payments
should know the exact number of Under the IPPS for capital-related
The regulations at § 412.348(f) costs, § 412.300(b) of the regulations
hospitals participating in the provide that a hospital may request an
demonstration program and would defines a new hospital as a hospital that
additional payment if the hospital has operated (under current or previous
revise our estimates accordingly.) This incurs unanticipated capital ownership) for less than 2 years. (For
estimated adjusted amount reflects the expenditures in excess of $5 million due more detailed information, we refer
estimated difference between the to extraordinary circumstances beyond readers to the FY 1992 IPPS final rule
participating hospitals costs and the the hospital’s control. This policy was (56 FR 43418).) During the 10-year
IPPS payment based on data from the originally established for hospitals transition period, a new hospital was
hospitals’ cost reports. We discuss the during the 10-year transition period, but exempt from the capital IPPS for its first
payment rate adjustment that is required as we discussed in the FY 2003 IPPS 2 years of operation and was paid 85
to ensure the budget neutrality of the final rule (67 FR 50102), we revised the percent of its reasonable costs during
demonstration program for FY 2009 in regulations at § 412.312 to specify that that period. Originally, this provision
section II.A.4. of the Addendum to this payments for extraordinary was effective only through the transition
proposed rule. circumstances are also made for cost period and, therefore, ended with cost
V. Proposed Changes to the IPPS for reporting periods after the transition reporting periods beginning in FY 2002.
Capital-Related Costs period (that is, cost reporting periods Because, as discussed in the FY 2003
beginning on or after October 1, 2001). IPPS final rule (67 FR 50101), we
A. Background Additional information on the exception believe that special protection to new
Section 1886(g) of the Act requires the payment for extraordinary hospitals is also appropriate even after
Secretary to pay for the capital-related circumstances in § 412.348(f) can be the transition period, we revised the
costs of inpatient acute hospital services found in the FY 2005 IPPS final rule (69 regulations at § 412.304(c)(2) to provide
‘‘in accordance with a prospective FR 49185 and 49186). that, for cost reporting periods
payment system established by the During the transition period, under beginning on or after October 1, 2002, a
Secretary.’’ Under the statute, the §§ 412.348(b) through (e), eligible new hospital (defined under
Secretary has broad authority in hospitals could receive regular § 412.300(b)) is paid 85 percent of its
establishing and implementing the IPPS exception payments. These exception Medicare allowable capital-related costs
for acute care hospital inpatient capital- payments guaranteed a hospital a through its first 2 years of operation,
related costs. We initially implemented minimum payment percentage of its unless the new hospital elects to receive
the IPPS for capital-related costs in the Medicare allowable capital-related costs fully prospective payment based on 100
jlentini on PROD1PC65 with PROPOSALS2
Federal fiscal year (FY) 1992 IPPS final depending on the class of the hospital percent of the Federal rate. (We refer
rule (56 FR 43358), in which we (§ 412.348(c)), but were available only readers to the FY 2002 IPPS final rule
established a 10-year transition period during the 10-year transition period. (66 FR 39910) for a detailed discussion
to change the payment methodology for After the end of the transition period, of the statutory basis for the system, the
Medicare hospital inpatient capital- eligible hospitals can no longer receive development and evolution of the
related costs from a reasonable cost- this exception payment. However, even system, the methodology used to
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23677
determine capital-related payments to account for capital input price increases necessary services. All other factors
hospitals both during and after the and other factors. The regulations at being equal, sustained substantial
transition period, and the policy for § 412.308(c)(2) provide that the capital positive margins demonstrate that
providing exception payments.) Federal rate is adjusted annually by a payment rates and updates have
factor equal to the estimated proportion exceeded what is required to provide
3. Hospitals Located in Puerto Rico
of outlier payments under the capital those services. It is to be expected,
Section 412.374 provides for the use Federal rate to total capital payments under a PPS, that highly efficient
of a blended payment amount for under the capital Federal rate. In providers might regularly realize
prospective payments for capital-related addition, § 412.308(c)(3) requires that positive margins, while less efficient
costs to hospitals located in Puerto Rico. the capital Federal rate be reduced by an providers might regularly realize
Accordingly, under the capital IPPS, we adjustment factor equal to the estimated negative margins. However, a PPS that
compute a separate payment rate proportion of payments for (regular and is correctly calibrated should not
specific to Puerto Rico hospitals using special) exceptions under § 412.348. necessarily experience sustained
the same methodology used to compute Section 412.308(c)(4)(ii) requires that periods in which providers generally
the national Federal rate for capital- the capital standard Federal rate be realize substantial positive Medicare
related costs. In general, hospitals adjusted so that the effects of the annual margins. Under the capital IPPS in
located in Puerto Rico are paid a blend DRG reclassification and the particular, it seems especially
of the applicable capital IPPS Puerto recalibration of DRG weights, and appropriate that there should not be
Rico rate and the applicable capital IPPS changes in the geographic adjustment sustained significant positive margins
Federal rate. factor are budget neutral. across the system as a whole. Prior to
Prior to FY 1998, hospitals in Puerto In the FY 2008 IPPS final rule with the implementation of the capital IPPS,
Rico were paid a blended capital IPPS comment period (72 FR 47398 through Congress mandated that the Medicare
rate that consisted of 75 percent of the 47401), based on our analysis of data on program pay only 85 percent of
capital IPPS Puerto Rico specific rate inpatient hospital Medicare capital hospitals’ inpatient Medicare capital
and 25 percent of the capital IPPS margins that we obtained through our costs. During the first 5 years of the
Federal rate. However, effective October monitoring and comprehensive review capital IPPS, Congress also mandated a
1, 1997 (FY 1998), in conjunction with of the adequacy of the standard Federal budget neutrality adjustment, under
the change to the operating IPPS blend payment rate for capital-related costs which the standard Federal capital rate
percentage for hospitals located in and the updates provided under the was set each year so that payments
Puerto Rico required by section 4406 of existing regulations, we made changes under the system as a whole equaled 90
Pub. L. 105–33, we revised the in the payment structure under the percent of estimated hospitals’ inpatient
methodology for computing capital IPPS capital IPPS beginning with FY 2008.
payments to hospitals in Puerto Rico to Medicare capital costs for the year.
We summarize these changes below. We Finally, Congress has twice adjusted the
be based on a blend of 50 percent of the refer readers to section V.B. of the
capital IPPS Puerto Rico rate and 50 standard Federal capital rate (a 7.4
preamble of the FY 2008 final rule with percent reduction beginning in FY 1994,
percent of the capital IPPS Federal rate. comment period (72 FR 47393 through
Similarly, in conjunction with the followed by a 17.78 percent reduction
47401) for a detailed discussion of the beginning in FY 1998). On the second
change in operating IPPS payments to data used as a basis for these changes.
hospitals located in Puerto Rico for FY occasion in particular, the specific
These data showed that hospital congressional mandate was ‘‘to apply
2005 required by section 504 of Pub. L. inpatient Medicare capital margins were
108–173, we again revised the the budget neutrality factor used to
very high across all hospitals during the
methodology for computing capital IPPS determine the Federal capital payment
period from FY 1996 through FY 2004.
payments to hospitals located in Puerto In the FY 2008 IPPS final rule with rate in effect on September 30, 1995
Rico to be based on a blend of 25 comment period, as background, we * * * to the unadjusted standard
percent of the capital IPPS Puerto Rico noted that, in general, under a PPS, Federal capital payment rate’’ for FY
rate and 75 percent of the capital IPPS standard payment rates should reflect 1998 and beyond. (The designated
Federal rate effective for discharges the costs that an average, efficient budget neutrality factor constituted a
occurring on or after October 1, 2004. provider would bear to provide the 17.78 percent reduction.) This statutory
services required for quality patient language indicates that Congress
B. Revisions to the Capital IPPS Based considered the payment levels in effect
care. Payment rate updates should also
on Data on Hospital Medicare Capital during FYs1992 through 1995,
account for the changes necessary to
Margins established under the budget neutrality
continue providing such services.
As noted above, under the Secretary’s Updates should reflect, for example, the provision to pay 90 percent of hospitals’
broad authority under the statute in increased costs that are necessary to inpatient Medicare capital costs in the
establishing and implementing the IPPS provide for the introduction of new aggregate, appropriate for the capital
for hospital inpatient capital-related technology that improves patient care. IPPS. The statutory history of the capital
costs, we have established a standard Updates should also take into account IPPS thus suggests that the system in the
Federal payment rate for capital-related the productivity gains that, over time, aggregate should not provide for
costs, as well as the mechanism for allow providers to realize the same, or continuous, large positive margins.
updating that rate each year. For FY even improved, quality outcomes with As we also discussed in the FY 2008
1992, we computed the standard reduced inputs and lower costs. IPPS final rule with comment period,
Federal payment rate for capital-related Hospital margins, the difference we believed that there could be a
costs under the IPPS by updating the FY between the costs of actually providing number of reasons for the relatively high
jlentini on PROD1PC65 with PROPOSALS2
1989 Medicare inpatient capital cost per services and the payments received margins that most IPPS hospitals have
case by an actuarial estimate of the under a particular system, thus provide realized under the capital IPPS. One
increase in Medicare inpatient capital some evidence concerning whether possibility is that the updates to the
costs per case. Each year after FY 1992, payment rates have been established capital IPPS rates have been higher than
we update the capital standard Federal and updated at an appropriate level over the actual increases in Medicare
rate, as provided at § 412.308(c)(1), to time for efficient providers to provide inpatient capital costs that hospitals
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23678 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
have experienced in recent years. elimination of the large urban add-on incorporate the margins for an
Another possible reason for the payment adjustment starting in FY 2008 additional year, FY 2005, into the
relatively high margins of most capital under the capital IPPS. Therefore, for analysis. The data on the experience of
IPPS hospitals may be that the payment FYs 2008 and beyond, we discontinued urban, large urban, and rural teaching
adjustments provided under the system the 3.0 percent additional payment that hospitals as opposed to nonteaching
are too high, or perhaps even had been provided to hospitals located hospitals provided significant new
unnecessary. Specifically, the in large urban areas (72 FR 24822). This information. As the analysis
adjustments for teaching hospitals, decision was supported by comments demonstrated, teaching hospitals in
disproportionate share hospitals, and from MedPAC. each class (urban, large urban, and
large urban hospitals appear to be 2. Changes to the Capital IME rural) performed significantly better
contributing to excessive payment levels Adjustment than comparable nonteaching hospitals.
for these classes of hospitals. Since the For the period covering FYs 1998
inception of the capital IPPS in FY a. Background and Changes Made for FY through 2005, urban teaching hospitals
1992, the system has provided 2008 realized aggregate positive margins of
adjustments for teaching hospitals (the In the FY 2008 IPPS proposed rule, 11.9 percent, compared to a positive
IME adjustment factor, under § 412.322 we noted that margin analysis indicated margin of 0.9 percent for urban
of the regulations), disproportionate that several classes of hospitals had nonteaching hospitals. Similarly, large
share hospitals (the DSH adjustment experienced continuous, significant urban teaching hospitals realized an
factor, under § 412.320), and large urban positive margins. The analysis indicated aggregate positive margin of 12.8
hospitals (the large urban location that the existing payment adjustments percent during that period, while large
adjustment factor, under § 412.316(b)). for teaching hospitals and urban nonteaching hospitals had an
The classes of hospitals eligible for disproportionate share hospitals were aggregate positive margin of only 2.9
these adjustments have been realizing contributing to excessive payment levels percent. Finally, rural teaching hospitals
much higher margins than other for these classes of hospitals. Therefore, experienced an aggregate positive
hospitals under the system. Specifically, we stated that it may be appropriate to margin of 4.5 percent, as compared to a
teaching hospitals (11.6 percent for FYs reduce these adjustments significantly, negative 1.3 percent margin for
1998 through 2004), disproportionate or even to eliminate them altogether, nonteaching rural hospitals. We noted
share hospitals (8.4 percent), and urban within the capital IPPS. These payment that the positive margins for teaching
hospitals (8.3 percent) have had adjustments, unlike parallel adjustments hospitals did not exhibit a decline to the
significant positive margins. Other under the operating IPPS, were not same degree as the margins for all
classes of hospitals have experienced mandated by the Act. Rather, they were hospitals. For example, the positive
much lower margins, especially rural included within the original design of margins for all IPPS hospitals declined
hospitals (0.3 percent for FYs 1998 the capital IPPS under the Secretary’s from 8.7 percent in FY 2002 to 5.3
through 2004) and nonteaching broad authority in section 1886(g)(1) of percent in FY 2004 and 3.7 percent in
hospitals (1.3 percent). The three groups the Act to include appropriate FY 2005. For urban hospitals, aggregate
of hospitals that have been realizing adjustments and exceptions within a margins decreased from 10.3 percent in
especially high margins under the capital IPPS. In the FY 2008 final rule FY 2002 to 6.4 percent in FY 2004 and
capital IPPS are, therefore, classes of with comment period, we also noted a 4.8 percent in FY 2005. Rural hospitals
hospitals that are eligible to receive one MedPAC recommendation that we experienced a decrease from 1.5 percent
or more specific payment adjustment seriously reexamine the appropriateness in FY 2001 to a negative margin of -4.2
under the system. We believed that the of the existing capital IME adjustment, percent in FY 2005. In comparison, the
evidence indicates that these that the margin analysis indicated such aggregate margin for teaching hospitals
adjustments have been contributing to adjustment may be too high, and that was 12.1 percent in FY 2001 and 10.6
the significantly large positive margins MedPAC’s previous analysis also percent in FY 2005. For urban teaching
experienced by the classes of hospitals suggested the adjustment may be too hospitals, margins were 12.5 percent in
eligible for these adjustments. high. In light of MedPAC’s FY 2001, 14.0 percent in FY 2002, 13.6
Therefore, in the FY 2008 IPPS final recommendation, we extended the percent in FY 2003, 11.9 percent in FY
rule with comment period, we made margin analysis discussed in the FY 2004, and 10.9 percent in FY 2005.
two changes to the structure of 2008 IPPS proposed rule in order to Rural teaching hospital margins were
payments under the capital IPPS, as distinguish the experience of teaching more variable, but did not exhibit a
discussed under items 1. and 2. below. hospitals from the experience of urban pattern of significant decline. In FY
and rural hospitals generally. 2001, rural teaching hospitals had a
1. Elimination of the Large Add-On
Specifically, we isolated the margins of positive margin of 3.2 percent; in FY
Payment Adjustment
urban, large urban, and rural teaching 2002, 8.2 percent; in FY 2003, 4.7
In the FY 2008 IPPS final rule with hospitals, as opposed to urban, large percent; in FY 2004, 5.7 percent; and in
comment period, we determined that urban, and rural nonteaching hospitals. FY 2005, 4.0 percent. We are reprinting
the data we had gathered on inpatient In conducting this analysis, we below the table found in the FY 2008
hospital Medicare capital margins employed updated cost report IPPS final rule with comment period
provided sufficient evidence to warrant information, which allowed us to showing our analysis (72 FR 47400).
HOSPITAL INPATIENT MEDICARE CAPITAL MARGINS
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Aggregate Aggregate
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1996–2005 1998–2005
U.S. ................................. 17.6 13.4 7.0 6.8 7.3 8.1 8.7 7.6 5.3 3.7 8.5 6.8
URBAN ........................... 17.7 13.8 7.8 7.5 8.4 9.2 10.3 9.0 6.4 4.8 9.4 7.9
RURAL ............................ 16.8 11.0 2.1 2.4 1.0 1.5 ¥1.7 ¥1.4 ¥2.3 ¥4.2 2.6 ¥0.4
No DSH Payments ......... 16.2 11.7 4.2 4.3 5.6 5.5 4.7 4.4 ¥1.3 ¥4.7 5.9 3.2
Has DSH Payments ........ 18.5 14.4 8.6 8.1 8.2 9.0 10.0 8.5 7.0 5.9 9.5 8.1
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23679
$1–$249,999 ................... 14.5 12.9 ¥0.4 3.1 1.6 4.1 3.2 1.4 ¥1.7 ¥4.8 3.2 1.9
$250,000–$999,999 ........ 15.5 9.0 2.3 1.6 2.8 2.7 ¥2.4 ¥1.5 ¥4.3 ¥7.3 1.5 ¥0.9
$1,000,000–$2,999,999 .. 16.8 13.0 8.7 9.0 8.7 7.0 10.1 5.2 3.2 2.0 8.2 6.6
$3,000,000 or more ........ 20.3 16.6 10.4 9.3 9.7 12.1 13.2 12.5 10.6 9.5 12.2 11.0
TEACHING ..................... 19.5 15.7 9.8 9.7 11.2 12.1 13.8 13.2 11.7 10.6 12.7 11.6
Urban .............................. 19.7 15.9 10.2 10.0 11.4 12.5 14.0 13.6 11.9 10.9 13.0 11.9
Large Urban .................... 20.5 16.8 11.0 10.1 12.5 13.9 15.2 14.7 12.0 11.9 13.9 12.8
Rural ............................... 13.9 8.5 1.0 2.9 5.8 3.2 8.2 4.7 5.7 4.0 5.7 4.5
NONTEACHING ............. 15.3 10.5 3.4 2.8 2.2 2.6 1.7 0.0 ¥3.2 ¥5.1 2.8 0.3
Urban .............................. 14.4 10.1 3.8 3.0 3.0 3.1 3.6 0.9 ¥2.9 ¥4.9 3.1 0.9
Large Urban .................... 15.5 11.3 6.2 6.1 5.7 5.2 5.3 1.7 ¥0.9 ¥3.2 5.1 2.9
Rural ............................... 17.3 11.4 2.3 2.4 0.2 1.2 ¥3.7 ¥2.6 ¥3.9 ¥6.0 2.0 ¥1.3
Census Division:
New England (1) ...... 27.9 25.9 17.1 15.1 18.2 20.7 21.3 21.1 20.5 20.3 21.0 19.5
Middle Atlantic (2) .... 19.1 15.5 11.1 11.6 14.1 16.5 18.7 18.0 14.7 16.0 15.6 15.2
South Atlantic (3) ..... 18.1 13.9 5.9 4.0 6.0 5.0 6.6 6.9 5.8 2.8 7.4 5.4
East North Central
(4) ......................... 18.2 12.7 6.4 7.1 8.8 8.5 6.1 7.1 6.6 3.2 8.4 6.7
East South Central
(5) ......................... 14.9 11.1 3.3 4.1 3.8 3.8 3.8 ¥0.9 ¥3.4 ¥5.8 3.2 0.9
West North Central
(6) ......................... 14.3 7.0 0.1 ¥-0.3 ¥1.5 2.0 1.9 3.4 1.6 ¥0.4 2.8 0.9
West South Central
(7) ......................... 13.2 8.3 3.3 2.6 ¥0.7 0.0 1.2 ¥2.0 ¥4.0 ¥6.5 1.2 ¥1.0
Mountain (8) ............ 17.2 14.7 8.5 7.7 7.2 6.4 2.9 3.3 0.8 ¥4.7 5.8 3.6
Pacific (9) ................. 20.4 16.1 12.3 11.3 11.9 13.3 14.7 12.1 9.8 8.8 13.0 11.7
Code 99 ................... 23.7 24.1 14.5 16.8 19.8 20.7 20.5 25.1 21.6 24.8 21.4 20.8
Bed Size:
< 100 beds .............. 17.7 13.0 4.6 3.5 2.7 2.5 ¥1.8 ¥1.2 ¥6.1 ¥9.6 2.0 ¥0.9
100–249 beds .......... 15.1 10.5 3.7 4.5 4.3 6.1 6.0 4.2 1.5 0.8 5.6 3.8
250–499 beds .......... 18.9 14.1 8.9 8.3 10.6 10.7 12.1 11.6 10.3 7.7 11.4 10.1
500–999 beds .......... 19.9 17.1 10.7 10.4 11.3 10.8 12.6 10.1 7.3 7.8 11.6 10.1
>= 1000 beds .......... 8.2 14.0 2.2 ¥1.3 ¥6.6 ¥3.6 6.5 8.1 6.5 2.1 3.5 2.3
Notes:
Based on Medicare Cost Report hospital data updated as of the 1st quarter of 2007.
Medicare payments are from Worksheet E, Part A, Lines 9 and 10.
Expenses are from Worksheet D, Part I, columns 10 and 12 and Part II, columns 6 and 8.
We apply the outlier trimming methodology developed with MedPAC.
Code 99 applies when census division information was not specified in the Medicare Cost Report hospital data.
As we indicated in the FY 2008 IPPS teaching adjustment over a 3-year adjustment for FY 2010 and subsequent
final rule with comment period (72 FR period beginning in FY 2008. years. However, because we concluded
47401), the statutory history of the Specifically, we maintained the that this change to the structure of
capital IPPS suggests that the system in adjustment for FY 2008, in order to give payments under the capital IPPS was
the aggregate should not provide for teaching hospitals an opportunity to significant, we provided the public with
continuous, large positive margins. As plan and make adjustments to the an opportunity for further comment on
we also indicated, a possible reason for change. During the second year of the these provisions through a 90-day
the relatively high margins of many transition, FY 2009, the formula for comment period after publication of the
capital IPPS hospitals may be that the determining the amount of the teaching FY 2008 IPPS final rule with comment
payment adjustments provided under adjustment was revised so that period (72 FR 47401). In addition, as we
the system are too high, or perhaps even adjustment amounts will be half of the indicated in that final rule with
unnecessary. We agreed with MedPAC’s amounts provided under the current comment period, to provide a more than
recommendation and reexamined the formula. For FY 2010 and after, adequate opportunity for hospitals,
appropriateness of the teaching hospitals will no longer receive an associations, and other interested
adjustment. We concluded that the adjustment for teaching activity under parties to raise issues and concerns
record of relatively high and persistent the capital IPPS. related to our policy, we are providing
positive margins for teaching hospitals additional opportunity for public
b. Public Comments Received on Phase
under the capital IPPS indicated that the comment during this FY 2009 proposed
Out of Capital IPPS Teaching
teaching adjustment is unnecessary, and rulemaking cycle for the IPPS.
Adjustment Provisions Included in the
that it was therefore appropriate to We received numerous timely pieces
FY 2008 Final Rule With Comment
exercise our discretion under the capital of correspondence that commented on
Period and Further Solicitation of
IPPS to eliminate this adjustment. At the policy of phasing out the capital
Public Comments
the same time, we believed that we IPPS teaching adjustment as described
should mitigate abrupt changes in As indicated above, in the FY 2008 in the FY 2008 IPPS final rule with
payment policy and that we should IPPS final rule with comment period, comment period. These comments are
jlentini on PROD1PC65 with PROPOSALS2
provide time for hospitals to adjust to we formally adopted as final policy a available on our e-rulemaking Web site,
changes in the payments that they can phase out of the capital IPPS teaching at http://www.cms.hhs.gov/
expect under the program. adjustment over a 3-year period, eRulemaking/ECCMSR/list.asp. We will
Therefore, in the FY 2008 IPPS final maintaining the current adjustment for also accept public comments on this
rule with comment period, we adopted FY 2008, making a 50-percent reduction policy during the comment period for
a policy to phase out the capital in FY 2009, and eliminating the this proposed rule. We will respond to
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23680 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
both sets of public comments when we accordance with the applicable require the Secretary to use a discharge
issue the FY 2009 IPPS final rule, which regulations in 42 CFR 413.40. as the payment unit for services
is scheduled for publication in August IRFs, IPFs, and LTCHs were paid furnished under the PPS for inpatient
2008. previously under the reasonable cost rehabilitation hospitals and inpatient
methodology. However, the statute was rehabilitation units of hospitals (referred
VI. Proposed Changes for Hospitals and amended to provide for the to as IRFs), and to establish classes of
Hospital Units Excluded From the IPPS implementation of prospective payment patient discharges by functional-related
A. Proposed Payments to Excluded systems for IRFs, IPFs, and LTCHs. In groups. Section 305 of Pub. L. 106–554
Hospitals and Hospital Units general, the prospective payment further amended section 1886(j) of the
systems for IRFs, IPFs, and LTCHs Act to allow IRFs, subject to the blended
Historically, hospitals and hospital provided transition periods of varying methodology, to elect to be paid the full
units excluded from the prospective lengths during which time a portion of Federal prospective payment rather than
payment system received payment for the prospective payment was based on the transitional period payments
inpatient hospital services they cost-based reimbursement rules under specified in the Act.
furnished on the basis of reasonable Part 413 (certain providers do not On August 7, 2001, we issued a final
costs, subject to a rate-of-increase receive a transition period or may elect rule in the Federal Register (66 FR
ceiling. An annual per discharge limit to bypass the transition period as 41316) establishing the PPS for IRFs,
(the target amount as defined in applicable under 42 CFR Part 412, effective for cost reporting periods
§ 413.40(a)) was set for each hospital or Subparts N, O, and P). We note that the beginning on or after January 1, 2002.
hospital unit based on the hospital’s various transition periods provided for There was a transition period for cost
own cost experience in its base year. under the IRF PPS, the IPF PPS, and the reporting periods beginning on or after
The target amount was multiplied by LTCH PPS have ended. January 1, 2002, and ending before
the Medicare discharges and applied as For cost reporting periods beginning October 1, 2002. For cost reporting
an aggregate upper limit (the ceiling as on or after October 1, 2002, all IRFs are periods beginning on or after October 1,
defined in § 413.40(a)) on total inpatient paid 100 percent of the adjusted Federal 2002, payments are based entirely on
operating costs for a hospital’s cost rate under the IRF PPS. Therefore, for the adjusted Federal prospective
reporting period. Prior to October 1, cost reporting periods beginning on or payment rate determined under the IRF
1997, these payment provisions applied after October 1, 2002, no portion of an PPS.
consistently to all categories of excluded IRF PPS payment is subject to 42 CFR
Part 413. Similarly, for cost reporting C. LTCH PPS
providers, which include rehabilitation
hospitals and units (now referred to as periods beginning on or after October 1, On August 30, 2002, we issued a final
IRFs), psychiatric hospitals and units 2006, all LTCHs are paid 100 percent of rule in the Federal Register (67 FR
(now referred to as IPFs), LTCHs, the adjusted Federal prospective 55954) establishing the PPS for LTCHs,
children’s hospitals, and cancer payment rate under the LTCH PPS. effective for cost reporting periods
hospitals. Therefore, for cost reporting periods beginning on or after October 1, 2002.
beginning on or after October 1, 2006, Except for a LTCH that made an election
Payment for children’s hospitals and
no portion of the LTCH PPS payment is under § 412.533(c) or a LTCH that is
cancer hospitals that are excluded from
subject to 42 CFR Part 413. (We note defined as new under § 412.23(e)(4),
the IPPS continues to be subject to the
that, to the extent a portion of a LTCH’s there was a transition period under
rate-of-increase ceiling based on the
PPS payment was subject to reasonable § 412.533(a) for LTCHs. For cost
hospital’s own historical cost
cost principles, the Secretary utilized reporting periods beginning on or after
experience. (We note that, in accordance
his broad authority under section 123 of October 1, 2006, all LTCHs are paid 100
with § 403.752(a) of the regulations,
the BBRA, as amended by section 307 percent of the adjusted Federal
RNHCIs are also subject to the rate-of-
of the BIPA, to make such portion prospective payment rate.
increase limits established under
subject to 42 CFR Part 413 and various
§ 413.40 of the regulations.) D. IPF PPS
provisions in section 1886(b) of the
In this FY 2009 IPPS proposed rule, Act.) Likewise, for cost reporting In accordance with section 124 of
we are proposing that the percentage periods beginning on or after January 1, Pub. L. 106–113 and section 405(g)(2) of
increase in the rate-of-increase limits for 2008, all IPFs are paid 100 percent of Pub. L. 108–173, we established a PPS
cancer and children’s hospitals and the Federal per diem amount under the for inpatient hospital services furnished
RNHCIs would be the proposed IPF PPS. Therefore, for cost reporting in IPFs. On November 15, 2004, we
percentage increase in the FY 2009 IPPS periods beginning on or after January 1, issued in the Federal Register a final
operating market basket, which is 2008, no portion of an IPF PPS payment rule (69 FR 66922) that established the
estimated to be 3.0 percent. Consistent is subject to 42 CFR Part 413. IPF PPS, effective for IPF cost reporting
with our historical approach, we periods beginning on or after January 1,
calculated the proposed IPPS operating B. IRF PPS 2005. Under the requirements of that
market basket for FY 2009 using the Section 1886(j) of the Act, as added by final rule, we computed a Federal per
most recent data available. However, if section 4421(a) of Pub. L. 105–33, diem base rate to be paid to all IPFs for
more recent data are available for the provided for a phase-in of a case-mix inpatient psychiatric services based on
final rule, we will use them to calculate adjusted PPS for inpatient hospital the sum of the average routine
the IPPS operating market basket. For services furnished by IRFs for cost operating, ancillary, and capital costs
cancer and children’s hospitals and reporting periods beginning on or after for each patient day of psychiatric care
RNHCIs, the proposed FY 2009 rate-of- October 1, 2000, and before October 1, in an IPF, adjusted for budget neutrality.
jlentini on PROD1PC65 with PROPOSALS2
increase percentage that is applied to FY 2002, with payments based entirely on The Federal per diem base rate is
2008 target amounts in order to the adjusted Federal prospective adjusted to reflect certain patient
calculate FY 2009 target amounts is 3.0 payment for cost reporting periods characteristics, including age, specified
percent, based on Global Insight, Inc.’s beginning on or after October 1, 2002. DRGs, selected high-cost comorbidities,
2008 first quarter forecast of the IPPS Section 1886(j) of the Act was amended days of the stay, and certain facility
operating market basket increase, in by section 125 of Pub. L. 106–113 to characteristics, including a wage index
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23681
adjustment, rural location, indirect are clearly errors and should not be In this proposed rule, in accordance
teaching costs, the presence of a full- relied upon. Thus, under our with § 412.525(a)(4)(iv)(C)(2) for high-
service emergency department, and established policy, generally, if a cost outliers and
COLAs for IPFs located in Alaska and LTCH’s calculated CCR is above the § 412.529(c)(4)(iv)(C)(2) for short-stay
Hawaii. applicable ceiling, the applicable LTCH outliers, using our established
We established a 3-year transition PPS statewide average CCR is assigned methodology for determining the LTCH
period during which IPFs whose cost to the LTCH instead of the CCR total CCR ceiling (described above),
reporting periods began on or after computed from its most recent (settled based on IPPS total CCR data from the
January 1, 2005, and before January 1, or tentatively settled) cost report data. December 2007 update to the PSF), we
2008, would be paid a PPS payment, a In the FY 2008 IPPS final rule with are proposing a total CCR ceiling of
portion of which was based on comment period, in accordance with 1.262 under the LTCH PPS, effective for
reasonable cost principles and a portion § 412.525(a)(4)(iv)(C)(2) for high-cost discharges occurring on or after October
of which was the Federal per diem outliers and § 412.529(c)(4)(iv)(C)(2) for 1, 2008, and before October 1, 2009. If
payment amount. For cost reporting short-stay outliers, using our established more recent data become available
periods beginning on or after January 1, methodology for determining the LTCH before publication of the final rule, we
2008, all IPFs are paid 100 percent of total CCR ceiling, based on IPPS total will use such data to determine the final
the Federal per diem payment amount. CCR data from the March 2007 update total CCR ceiling under the LTCH PPS
E. Determining Proposed LTCH Cost-to- to the Provider-Specific File (PSF), we for FY 2009.
established a total CCR ceiling of 1.284 In this FY 2009 IPPS proposed rule,
Charge Ratios (CCRs) Under the LTCH
under the LTCH PPS effective October in accordance with § 412.525(a)(4)(iv)(C)
PPS
1, 2007, through September 30, 2008. for high-cost outliers and
In general, we use a LTCH’s overall § 412.529(c)(4)(iv)(C) for short-stay
CCR, which is computed based on either (For further detail on our methodology
for annually determining the LTCH total outliers, using our established
the most recently settled cost report or methodology for determining the LTCH
the most recent tentatively settled cost CCR ceiling, we refer readers to the FY
2007 IPPS final rule (71 FR 48117 statewide average CCRs (described
report, whichever is from the latest cost above), based on the most recent
reporting period, in accordance with through 48121) and the FY 2008 IPPS
final rule with comment period (72 FR complete IPPS total CCR data from the
§ 412.525(a)(4)(iv)(B) and December 2007 update of the PSF, we
§ 412.529(c)(4)(iv)(B) for high cost 47403 through 47404).)
are proposing LTCH PPS statewide
outliers and short-stay outliers, Our general methodology established average total CCRs for urban and rural
respectively. (We note that, in some for determining the statewide average hospitals that would be effective for
instances, we use an alternative CCR, CCRs used under the LTCH PPS is discharges occurring on or after October
such as the statewide average CCR in similar to our established methodology 1, 2008, and before October 1, 2009,
accordance with the regulations at for determining the LTCH total CCR presented in Table 8C of the Addendum
§ 412.525(a)(4)(iv)(C) and ceiling (described above) because it is to this proposed rule. If more recent
§ 412.529(c)(4)(iv)(C), or a CCR that is based on ‘‘total’’ IPPS CCR data. Under data become available before
specified by CMS or that is requested by the LTCH PPS high-cost outlier policy at publication of the final rule, we will use
the hospital under the provisions of the § 412.525(a)(4)(iv)(C) and the short-stay such data to determine the final
regulations at § 412.525(a)(4)(iv)(A) and outlier policy at § 412.529(c)(4)(iv)(C), statewide average total CCRs for urban
§ 412.529(c)(4)(iv)(A).) Under the LTCH the fiscal intermediary (or MAC) may and rural hospitals under the LTCH PPS
PPS, a single prospective payment per use a statewide average CCR, which is for FY 2009 using our established
discharge is made for both inpatient established annually by CMS, if it is methodology described above.
operating and capital-related costs. unable to determine an accurate CCR for We note that, for this proposed rule,
Therefore, we compute a single a LTCH in one of the following as we established when we revised our
‘‘overall’’ or ‘‘total’’ LTCH-specific CCR circumstances: (1) A new LTCH that has methodology for determining the
based on the sum of LTCH operating not yet submitted its first Medicare cost applicable LTCH statewide average
and capital costs (as described in report (for this purpose, a new LTCH is CCRs in the FY 2007 IPPS final rule (71
Chapter 3, section 150.24, of the defined as an entity that has not FR 48119 through 48121), and as is the
Medicare Claims Processing Manual accepted assignment of an existing case under the IPPS, all areas in the
(CMS Pub. 100–4)) as compared to total hospital’s provider agreement in District of Columbia, New Jersey, Puerto
charges. Specifically, a LTCH’s CCR is accordance with § 489.18); (2) a LTCH Rico, and Rhode Island are classified as
calculated by dividing a LTCH’s total whose CCR is in excess of the LTCH urban, and, therefore, there are no
Medicare costs (that is, the sum of its CCR ceiling (as discussed above); and proposed rural statewide average total
operating and capital inpatient routine (3) any other LTCH for whom data with CCRs listed for those jurisdictions in
and ancillary costs) by its total Medicare which to calculate a CCR are not Table 8C of the Addendum to this
charges (that is, the sum of its operating available (for example, missing or faulty proposed rule. In addition, as we
and capital inpatient routine and data). (Other sources of data that the established when we revised our
ancillary charges). fiscal intermediary (or MAC) may methodology for determining the
Generally, a LTCH is assigned the consider in determining a LTCH’s CCR applicable LTCH statewide average
applicable statewide average CCR if, include data from a different cost CCRs in that same final rule, and as is
among other things, a LTCH’s CCR is reporting period for the LTCH, data the case under the IPPS, although
found to be in excess of the applicable from the cost reporting period preceding Massachusetts has areas that are
maximum CCR threshold (that is, the the period in which the hospital began designated as rural, there were no short-
jlentini on PROD1PC65 with PROPOSALS2
LTCH CCR ceiling). This is because to be paid as a LTCH (that is, the period term acute care IPPS hospitals or LTCHs
CCRs above this threshold are most of at least 6 months that it was paid as located in those areas as of December
likely due to faulty data reporting or a short-term acute care hospital), or data 2007. Therefore, for this proposed rule,
entry, and, therefore, these CCRs should from other comparable LTCHs, such as there is no proposed rural statewide
not be used to identify and make LTCHs in the same chain or in the same average total CCR listed for rural
payments for outlier cases. Such data region.) Massachusetts in Table 8C of the
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23682 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Addendum of this proposed rule. As we Therefore, effective for cost reporting governing body of the hospital with
also established when we revised our periods beginning on or after October 1, which it shares space. The excluded
methodology for determining the 1997, psychiatric, rehabilitation, cancer, hospital’s governing body cannot be
applicable LTCH statewide average and children’s hospitals that are co- under the control of the hospital
CCRs in the FY 2007 IPPS final rule (71 located with another hospital are also occupying space in the same building or
FR 48120 through 48121), in required to meet the ‘‘separateness’’ on the same campus, or of any third
determining the urban and rural criteria at § 412.22(e). entity that controls both hospitals.
statewide average total CCRs for In addition, a ‘‘grandfathering’’ Currently, there are State HwHs in these
Maryland LTCHs paid under the LTCH provision was added to the regulations types of arrangements that have been
PPS, we use, as a proxy, the national at § 412.22(f), as provided for under able to retain their IPPS-excluded status
average total CCR for urban IPPS section 4417 of the Balanced Budget Act solely because of the grandfathering
hospitals and the national average total (BBA) of 1997 (Pub. L. 105–33). This provision in § 412.22(f). These HwHs
CCR for rural IPPS hospitals, provision of the regulations allowed a were IPPS-excluded even before the
respectively. We use this proxy because LTCH that was excluded from the IPPS
HwH criteria were implemented and
we believe that the CCR data on the PSF on or before September 30, 1995, and at
only remain excluded HwHs under
for Maryland hospitals may not be that time occupied space in a building
§ 412.22(f) as long as they continue to
accurate (as discussed in greater detail also used by another hospital, or in one
or more buildings located on the same meet the requirements specified under
in that same final rule (71 FR 48120)).
campus as buildings used by another § 412.22(f)(1), (f)(2), and (f)(3). Because
F. Proposed Change to the Regulations hospital, to retain its IPPS-excluded they are grandfathered, these HwHs
Governing Hospitals-Within-Hospitals status even if the HwH criteria at cannot increase their bed size without
On September 1, 1994, we published § 412.22(e) could not be met, as long as losing their IPPS-excluded status under
hospital-within-hospital (HwH) the hospital continued to operate under the grandfathering provisions
regulations for LTCHs to address the same terms and conditions as were (§ 412.22(f)). Furthermore, if a
inappropriate Medicare payments to in effect on September 30, 1995. grandfathered State-run HwH increased
entities that were effectively units of Consistent with the grandfathering its bed size, it would be unable to
other hospitals (59 FR 45330). There provision under the BBA, which only qualify as an IPPS-excluded HwH under
was concern that the HwH model was applied to LTCHs, we extended the § 412.22(e) because it cannot meet the
being used by some acute care hospitals application of the grandfathering rule to HwH criteria at § 412.22(e)(1)(i) as a
paid under the IPPS as a way of the other classes of IPPS-excluded result of State law requirements
inappropriately receiving higher hospitals that are HwHs but did not regarding its organizational structure
payments for a subset of their cases. meet the criteria at § 412.22(e). (We and governance. These HwHs are
Moreover, IPPS-exclusion of long-term subsequently expanded this provision to precluded from the flexibility to expand
care ‘‘units’’ was and remains allow for a grandfathered hospital to their bed size, which is available to
inconsistent with the statutory scheme. make specified changes during other HwHs whose organizational
Therefore, we established the HwH particular timeframes.) structure is not bound by State law.
regulations at 42 CFR 412.23 (currently Despite our efforts to allow those As discussed in the previous
at § 412.22) for a LTCH HwH that is co- HwHs for whom the IPPS-exclusion paragraph, the organizational
located with another hospital. A co- status is appropriate to meet the HwH arrangements were in place for these
located hospital is a hospital that criteria, it appears that there may be a
occupies space in the same building or State-operated HwHs before the HwH
gap in our regulations. There remain
on the same campus as another hospital. regulations were adopted. To the extent
certain HwHs under current rules that
The regulations at § 412.23(e) required the arrangements are required by State
may be unnecessarily restricted from
that, to be excluded from the IPPS, long- law, we believe they do not reflect
expanding their bed size. These HwHs
term care HwHs must have a separate attempts by entities to establish a
are State hospitals that are co-located
governing body, chief medical officer, with another State hospital and that are nominal hospital and, in turn, seek
medical staff, and chief executive officer grandfathered under § 412.22(f). Where inappropriate exclusions. We also
from that of the co-located hospital. In a State law defines the structure and believe it may be unnecessary to prevent
addition, the HwH must meet either of authority of the State’s agencies and hospitals that were created before the
the following two criteria: The HwH institutions, and the State hospital is co- HwH requirements, and that because of
must perform certain specified basic located with another hospital that is State statutory requirements cannot
hospital functions on its own and not under State governance, each hospital meet the subsequently issued separate
receive them from the host hospital or may have control over the day-to-day governing body requirements, from
a third entity that controls both operations of its respective facility and being excluded from the IPPS.
hospitals; or the HwH must receive at have separate management, patient Accordingly, we are proposing to add a
least 75 percent of its inpatients from intake, and billing systems and medical provision to the regulations that would
sources other than the co-located staff, as well as a governing board. apply only to State hospitals that were
hospital. A third option was added to However, State law may require that the in existence when the HwH regulations
the regulations on September 1, 1995 legal accountability for the budgets and were established. This proposed
(60 FR 45778) that allowed HwHs to activities of entities operating within a provision would not apply to other State
demonstrate their separateness by State-run institution rests with the State. hospitals that chose to open as a HwH
showing that the cost of the services that Therefore, the co-located State hospitals subsequent to the establishment of the
the hospital obtains under contracts or may also be governed by a common HwH regulations in FY 1994, under an
jlentini on PROD1PC65 with PROPOSALS2
other agreements with the co-located governing body. Because of State law organizational structure the same as or
hospital or a third entity that controls requirements, these HwHs are, similar to the one described in this
both hospitals is no more than 15 therefore, precluded from meeting the section. These hospitals knew, in
percent. In 1997, we extended HwH criteria at § 412.22(e)(1)(i) that advance of becoming a HwH, the
application of the HwH rules at § 412.22 requires the governing body of a co- requirements that had to be met in order
to all classes of IPPS excluded hospitals. located hospital to be separate from the to be an IPPS-excluded HwH, unlike
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23683
those hospitals that existed before the interest of patient health and safety. physician-owners have retired from the
HwH regulations were established. Section 1820(e)(3) of the Act authorizes practice of medicine). We believe that
Accordingly, we are proposing to add the Secretary to establish criteria requiring a hospital with no referring
a new paragraph (e)(1)(vi) to § 412.22 to necessary for an institution to be physician owners to disclose to all
provide that if a hospital cannot meet certified as a ‘‘critical access hospital.’’ patients that it is physician-owned and
the criteria in § 412.22(e)(1)(i) solely In the FY 2008 IPPS final rule with to provide the patients with a list of the
because it is a State hospital occupying comment period, we revised our (nonreferring) physician owners would
space with another State hospital, the regulations governing Medicare be an unnecessary burden on the
HwH can nevertheless qualify for an provider agreements, specifically hospital and of no value in assisting a
exclusion from the IPPS if that hospital § 489.20(u), to require a hospital to patient in making an informed decision
meets the other applicable criteria in disclose to all patients whether it is as to where to seek treatment. Similarly,
§ 412.22(e) and— physician-owned and, if so, the names we do not believe that it is useful to
• Both State hospitals share the same of its physician owners (72 FR 47385 require a hospital to make such
building or same campus and have been through 47387). In addition, we added disclosures when no referring physician
continuously owned and operated by a definition of physician-owned has an immediate family member who
the State since October 1, 1995; hospital at § 489.3. The disclosure has an ownership or investment interest
• Is required by State law to be requirement in current § 489.20(u) is in the hospital. Accordingly, we are
subject to the governing authority of the applicable only to those hospitals with proposing to include in § 489.20(v) new
State hospital with which it shares physician ownership. (For purposes of language to provide for an exception to
space or the governing authority of a this proposal, the term ‘‘hospital’’ also the disclosure requirements for a
third entity that controls both hospitals; includes ‘‘critical access hospital’’ physician-owned hospital (as defined at
and (CAH).) We neglected to include those § 489.3) that does not have any
• Was excluded from the inpatient hospitals in which no physician held an physician owners who refer patients to
prospective payment system before ownership or investment interest, but in the hospital (and that has no referring
October 1, 1995, and continues to be which an immediate family member of physicians (as defined at § 411.351) who
excluded from the IPPS through a physician held an ownership or have an immediate family member with
September 30, 2008. investment interest. However, it was
We believe the proposed criteria an ownership or investment interest in
always our intent to have consistency the hospital), provided that the hospital
capture the segment of grandfathered, between the disclosure requirements
State-operated HwHs that are unable to attests, in writing, to that effect and
and the physician self-referral statute maintains such attestation in its files for
increase their bed size because of State and regulations. The physician self-
law regarding governance. We review by State and Federal surveyors
referral statute and regulations, which or other government officials. (We note
emphasize that we intend to allow an recognize the potential for program and
exception to the criteria in § 412.22 that, as explained below, we are
patient abuse where a financial proposing to redesignate the existing
(e)(1)(i) only if the hospital that meets relationship exists, are applicable to
the proposed criteria above cannot meet paragraphs (v) and (w) of § 489.20 as
both a physician and the immediate paragraphs (w) and (x), respectively.)
the separate governing body family member of the physician. We
requirement because of State law. We do believe that it is necessary to revise our We are proposing to revise § 489.20(u)
not intend to provide similar treatment definition of physician-owned hospital to specify that a hospital must furnish
for hospitals that are not subject to State because a physician’s potential conflict to patients the list of owners and
statutory requirements regarding of interest occurs not only in those investors who are physicians (or
governance but have chosen not to instances where he or she has a immediate family members of
organize in a manner that would allow financial relationship in the form of an physicians) at the time the list is
them to be an IPPS-excluded hospital ownership or investment interest, but requested by or on behalf of the patient.
that meets the HwH criteria at also where his or her immediate family In response to the FY 2008 IPPS
§ 412.22(e)(1)(i). member has a similar interest, and proposed rule, we received public
patients should be informed of this as comments that noted that our proposal
VII. Disclosure Required of Certain did not establish a timeframe within
Hospitals and Critical Access Hospitals part of making an informed decision
concerning treatment. Therefore, we are which the hospital must furnish to
Regarding Physician Ownership patients the required list of the
(§ 489.2(u) and (v)) proposing to revise the language in
§ 489.3 to define a ‘‘physician-owned hospital’s physician owners or
Section 1866 of the Act states that any hospital’’ as a participating hospital in investors. These commenters suggested
provider of services (except a fund which a physician, or an immediate that we require that the list be provided
designated for purposes of sections family member of a physician (as to the patient at the time the request for
1814(g) and 1835(e) of the Act) shall be defined at § 411.351), has an ownership the list is made by or on behalf of the
qualified to participate in the Medicare or investment interest in the hospital. patient. We stated in the preamble of the
program and shall be eligible for To effectuate the changes made in the FY 2008 IPPS final rule with comment
Medicare payments if it files with the FY 2008 IPPS final rule with comment period that we would not revise the
Secretary a Medicare provider period, we relied on our authority in provision to include any specific
agreement and abides by the sections 1861(e)(9), 1820(e)(3) and 1866 timeframe for making the list available
requirements applicable to Medicare of the Act, and on our general because we believed that it was
provider agreements. These rulemaking authority in sections 1871 important to allow hospitals some
requirements are incorporated into our and 1102 of the Act. Following degree of flexibility regarding the
jlentini on PROD1PC65 with PROPOSALS2
regulations in 42 CFR Part 489, Subparts publication of the FY 2008 IPPS final manner and form in which it notified
A and B. Section 1861(e) of the Act rule with comment period, we became patients of the identity of its physician
defines the term ‘‘hospital.’’ Section aware that some physician-owned owners and investors (72 FR 47386).
1861(e)(9) of the Act authorizes the hospitals have no physician owners However, we also stated later in the
Secretary to establish requirements for who refer patients to the hospital (for preamble that we were revising
hospitals as he finds necessary in the example, in the case of a hospital whose proposed § 489.20(u) to specify that the
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23684 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
hospital should furnish a list of finalize the proposal because we provisions of proposed § 489.20(u)(1) or
physician owners to a patient at the believed that it would not provide any (u)(2). We believe that these revisions
beginning of his or her hospital stay or additional protections for patients that would be necessary to enforce the
outpatient visit, but the regulation text would not already be offered by the proposed disclosure requirements set
did not reflect this change (72 FR requirement for hospitals to disclose forth in § 489.20.
47387). their physician ownership to patients. We are not inclined to make a
We have reconsidered the issue and We have revisited this issue. corresponding change to the medical
are proposing in § 489.20(u)(1) that the In the FY 2008 IPPS final rule with staff bylaws condition of participation
list of the hospital’s owners or investors comment period, we stated that the (CoP) in § 482.22(c). We believe that the
who are physicians or immediate family scheduling of most hospital inpatient or proposed disclosure requirement is
members of physicians (as defined at outpatient services is performed by a appropriate for inclusion in the
§ 411.351) must be furnished at the time staff member in the physician’s office, regulations governing Medicare
the patient or someone on the patient’s often weeks, or even months, in advance provider agreements for the following
behalf requests it. We are proposing this of the furnishing of the service. As reasons. As stated in the FY 2008 IPPS
change for two reasons. First, in the FY discussed previously, we believe that final rule with comment period, each
2008 IPPS final rule with comment early notification of physician participating provider must comply
period, in response to public comments ownership or investment in the hospital with all applicable provisions of the
received on the FY 2008 IPPS proposed is beneficial to the patient’s provider agreement regulations found in
rule, we stated that we believed that the decisionmaking concerning his or her 42 CFR Part 489, and CMS may
physician ownership disclosure treatment. Currently, under § 489.20(u), terminate a provider agreement if the
proposal would permit an individual to scheduling of inpatient stays and provider is not in substantial
make more informed decisions outpatient visits at physician-owned compliance with these requirements (72
regarding his or her treatment and to hospitals would be permitted without FR 47391). A provider’s compliance
evaluate whether the existence of a notification to the patient of the with applicable provider agreement
financial relationship, in the form of an referring physician’s ownership or regulations is reviewed through a
ownership interest, suggests a conflict of investment interest in the hospital. If a variety of means, including onsite
interest that is not in his or her best patient were notified of the physician investigation of complaints. Thus,
interest. However, we maintain that the ownership or investment at the time of compliance with this proposed
provision of a generic notice that the the referral, he or she would have an requirement could be easily monitored.
hospital is owned by physicians or opportunity to discuss the physician’s We also note that any revisions to the
immediate family members of ownership or investment in the hospital medical staff bylaws concerning the
physicians is insufficient to permit an and make a more informed decision. We requirement that the disclosure be given
individual to make a truly informed believe that it would be in the best at the time of the referral would be
decision. We believe that it is critical interests of the patient and the difficult to enforce as a CoP because the
that the patient receives the list of physician owner or investor to disclose required notification generally would be
names of the relevant owners or the physician’s (or his or her immediate given outside of the hospital’s or CAH’s
investors at the time the request is made family member’s) ownership in the premises. However, we are considering
by or on behalf of the patient so that the hospital at the time the physician is whether these proposed changes would
patient may make a determination as to referring the patient to the hospital. We be better effectuated through changes to
whether his or her admitting or referring are revising § 489.20(u) accordingly. our regulations governing the CoPs
physician has a potential conflict of We note that notification of physician applicable to hospitals and CAHs,
interest. Second, furnishing the list at ownership or investment in a hospital which appear at 42 CFR Part 482 and 42
the time the request is made by the may not be viewed negatively by all CFR Part 485, Subpart F, respectively,
patient or on behalf of the patient is interested parties. For instance, some and, therefore, we are soliciting public
crucial to affording the patient an physician owners or investors in comments on this issue.
opportunity to make an informed hospitals believe that disclosing their In the FY 2008 IPPS final rule with
decision before treatment is furnished at ownership or investment interests in the comment period, we added a new
the hospital. We are not specifying a hospital to their patients at the time of provision at § 489.20(v) to require that
form to be used for the list; rather, we the referral is extremely beneficial for hospitals and CAHs: (1) Furnish all
are addressing the timeframe for the both the physician and the patient. They patients written notice at the beginning
hospital to furnish the list to the patient. communicate to patients their belief that of their inpatient hospital stay or
In addition, we are proposing to add their ownership in the hospital permits outpatient service if a doctor of
new § 489.20(u)(2) to require a hospital them to have total control over medicine or a doctor of osteopathy is
to require all physicians who are scheduling, staffing, and quality not present in the hospital 24 hours per
members of the hospital’s medical staff mechanisms. Section 5006 of the day, 7 days per week; and (2) describe
to agree, as a condition of continued Medicare, Prescription Drug, how the hospital or CAH will meet the
medical staff membership or admitting Improvement, and Modernization Act of medical needs of any patient who
privileges, to disclose in writing to all 2003 (MMA) required, among other develops an emergency medical
patients who they refer to the hospital things, that HHS study the quality of condition at a time when no physician
any ownership or investment interest in care and patient satisfaction with is present in the hospital (72 FR 47387).
the hospital held by themselves or by an specialty hospitals. HHS concluded that (We are proposing to redesignate
immediate family member. We would specialty hospital patients have very existing § 489.20(v) and (w) as
require that physicians agree to make favorable perceptions of the clinical § 489.20(w) and (x), respectively, to
jlentini on PROD1PC65 with PROPOSALS2
such disclosures at the time they refer quality of care they receive, and that accommodate the addition of the
patients to the hospital. We proposed a overall patient satisfaction is very high. proposed exception to the requirements
similar requirement in the FY 2008 IPPS We are also proposing to revise in § 489.20(v) discussed above.) We
proposed rule, but decided not to adopt § 489.53 to permit CMS to terminate the stated that it is important to ensure that
it as final. In response to a public Medicare provider agreement if the consumers are provided accurate
comment, we stated that we would not hospital fails to comply with the information on the availability of
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23685
physician services at the point when (‘‘Phase III’’), we interpreted certain arrangement between the hospital and
they are about to become patients of a provisions of section 1877 of the Act, the physician and would need to satisfy
hospital or CAH. In order to be fully including provisions relating to direct the requirements of a direct
informed, consumers should be made and indirect compensation compensation arrangement exception, if
aware of whether a hospital or CAH has arrangements. Specifically, the Phase III the physician is to continue referring
a physician on-site 24 hours per day, 7 final rule included provisions under Medicare patients to the component for
days per week, and should be made which referring physicians are treated as DHS. According to the industry
aware of the hospital’s or CAH’s standing in the shoes of their physician stakeholders, before Phase III, such
processes for addressing medical organizations for purposes of applying arrangements would have been analyzed
emergencies that may occur when a the rules that describe direct and under the rules regarding indirect
physician is not on site. Given the indirect compensation arrangements in compensation arrangements and would,
patient safety measures addressed by § 411.354 (72 FR 51026 through 51030). in their view, have been permitted.
these provisions, we are proposing to set A ‘‘physician organization’’ is defined at After Phase III, in their view, it is
forth penalties for failure to comply § 411.351 as ‘‘a physician (including a unlikely that the requirements of an
with these requirements. Specifically, professional corporation of which the available exception could be satisfied
we are proposing to revise § 489.53 to physician is the sole owner), a given the nature of support payments;
permit CMS to terminate the provider physician practice, or a group practice that is, support payments usually are
agreement of any hospital or CAH that that complies with the requirements of not tied to specific items or services
fails to comply with the requirements § 411.352.’’ Therefore, when provided by the faculty practice plan (or
set forth in proposed redesignated determining whether a direct or indirect group practice within an integrated
§ 489.20(w). compensation arrangement exists health care delivery system), but rather
We are also soliciting public between a physician and an entity to are intended to support the overall
comments on whether hospitals and which the physician refers Medicare mission of the AMC or maintain
CAHs should educate patients about the patients for DHS, the referring physician operations in an integrated health care
availability of information regarding stands in the shoes of: (1) Another delivery system. For this reason,
physician ownership under the physician who employs the referring support payments likely do not satisfy
proposed disclosure requirements and, physician; (2) his or her wholly-owned the requirement, present in many
if so, by what means (for example, by a professional corporation (‘‘PC’’); (3) a exceptions, that the compensation be
posting in the admissions office or in a physician practice (that is, a medical fair market value for items or services
patient brochure). practice) that employs or contracts with provided. Similarly, some stakeholders
the referring physician or in which the raised concerns about support payments
VIII. Physician Self-Referral Provisions made from faculty practice plans to
physician has an ownership interest; or
(§§ 411.351, 411.352 and 411.354) AMC components. Although AMCs are
(4) a group practice of which the
A. Stand in the Shoes Provisions referring physician is a member or free to use the exception for services
independent contractor. The referring provided by an AMC in § 411.355(e)
1. Physician ‘‘Stand in the Shoes’’ (which would protect support payments
physician is considered to have the
Provisions made among AMC components if all of
same compensation arrangements (with
a. Background the same parties and on the same terms) the conditions of the exception are met),
as the physician organization in whose industry stakeholders explained that
Section 1877 of the Act, also known many AMCs do not do so, preferring
as the physician self-referral law: (1) shoes the referring physician stands.
instead to rely on other available
Prohibits a physician from making Subsequent to the publication of exceptions and the rules regarding
referrals for certain designated health Phase III, industry stakeholders, indirect compensation arrangements
services (‘‘DHS’’) payable by Medicare including academic medical centers (especially prior to Phase III).
to an entity with which he or she (or an (‘‘AMCs’’), integrated tax-exempt health To provide CMS sufficient time to
immediate family member) has a care delivery systems, and their study the ‘‘stand in the shoes’’
financial relationship (ownership, representatives, expressed concern provisions as they relate to
investment or compensation), unless an about the application of the Phase III compensation arrangements involving
exception applies; and (2) prohibits the ‘‘stand in the shoes’’ provisions to support payments, seek additional
entity from filing claims with Medicare compensation arrangements involving public comment, and develop an
(or billing another individual, entity, or ‘‘mission support payments’’ and approach for addressing this issue, on
third party payor) for those referred ‘‘similar payments’’ (referred to in this November 15, 2007, we issued a final
services. The statute establishes a proposed rule generally as ‘‘support rule entitled ‘‘Medicare Program; Delay
number of specific exceptions and payments’’). The stakeholders believed of the Date of Applicability for Certain
grants the Secretary the authority to that certain payments did not Provisions of Physicians’ Referrals to
create regulatory exceptions for previously trigger application of the Health Care Entities With Which They
financial relationships that pose no risk physician self-referral law but, after Have Financial Relationships (Phase
of program or patient abuse. Phase III, need to satisfy the III)’’ (72 FR 64164) that delayed the
Determining whether DHS entities and requirements of an exception. One effective date of the provisions in
referring physicians (or their immediate example offered was a DHS entity § 411.354(c)(1)(ii), § 411.354(c)(2)(iv),
family members) have direct or indirect component (such as a hospital) of an and § 411.354(c)(3) for 12 months after
financial relationships is a key step in AMC that transfers funds to the faculty the effective date of Phase III (that is,
applying the statute. practice plan component of the AMC. If until December 4, 2008). That final rule
jlentini on PROD1PC65 with PROPOSALS2
In the final rule entitled ‘‘Medicare a referring physician stands in the shoes was applicable to the following
Program; Physicians’ Referrals to Health of his or her faculty practice plan, the compensation arrangements between
Care Entities With Which They Have compensation arrangement between the the following physician organizations
Financial Relationships (Phase III),’’ hospital providing the support payment and entities ONLY:
published in the Federal Register on and the faculty practice plan will be • With respect to an AMC as
September 5, 2007 (72 FR 51012) considered to be a direct compensation described in § 411.355(e)(2),
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23686 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
compensation arrangements between a would leave the Phase III ‘‘stand in the § 411.354(c). Arrangements between
faculty practice plan and another shoes’’ provisions as promulgated and DHS entities and physician
component of the same AMC; and would, instead, create a new exception organizations whose physicians do not
• With respect to an integrated using our authority under section stand in their shoes may still create
section 501(c)(3) health care system, 1877(b)(4) of the Act for nonabusive indirect compensation arrangements
compensation arrangements between an arrangements that warrant protection that would need to satisfy the
affiliated DHS entity and an affiliated not available under existing exceptions. requirements of the exception for
physician practice in the same We are also interested in public indirect compensation arrangements in
integrated section 501(c)(3) health care comments on other approaches and on § 411.357(p).
system. whether changes to the existing ‘‘stand Under this first proposed approach,
Following the publication of the in the shoes’’ provisions are needed at physician owners and investors would
November 15, 2007 final rule, other all. continue to stand in the shoes of their
industry stakeholders asserted that, in physician organizations. However, we
For the first proposal, we propose
addition to section 501(c)(3) health care are concerned that considering all
revising § 411.354(c)(2)(iv) to provide
systems, most integrated health care physician owners of, or physician
that a physician would be deemed not
delivery systems, including ones investors in, a physician organization to
to stand in the shoes of his or physician
involving for-profit entities, make stand in the shoes of the physician
organization if the compensation
support payments. The stakeholders organization, as they currently do under
arrangement between the physician
further asserted that, although under the the Phase III ‘‘stand in the shoes’’
organization and the physician satisfies
‘‘stand in the shoes’’ provisions such provisions, might be over-inclusive. For
the requirements of the exception in
payments must now satisfy a direct example, in a State that prohibits the
§ 411.357(c) (for bona fide employment
compensation arrangement exception, corporate practice of medicine, a
there is, in fact, no applicable exception. relationships), the exception in
physician owner of a captive or
These stakeholders urged that any § 411.357(d) (for personal service
‘‘friendly’’ PC who has no right to the
approach to addressing the impact of arrangements), or the exception in
distribution of profits would stand in
the Phase III ‘‘stand in the shoes’’ § 411.357(l) (for fair market value
the shoes of his or her physician
provisions on support payments and compensation). Currently, all physicians
organization, even though his or her
other monetary transfers within stand in the shoes of their physician
employment arrangement with the
integrated health care delivery systems organizations, regardless of the nature of group satisfies the requirements of the
should have universal applicability that the compensation they receive from the exception for bona fide employment
is not dependent on whether the system physician organization. Under our relationships in § 411.357(c). We are
meets the definition of an AMC or has proposal, the first step in the analysis considering whether these and similarly
a particular status under the rules of the would be to look at the compensation a situated physician owners should have
Internal Revenue Service. referring physician receives from his or to stand in the shoes of their physician
her physician organization. A organizations when their ownership
b. Proposals compensation arrangement between a interest is nominal in nature and their
Given the potential widespread physician organization and a physician compensation arrangement with the
impact of the ‘‘stand in the shoes’’ that satisfies the requirements of physician organization satisfies the
provisions, as well as the considerable § 411.357(c), (d), or (l) would be requirements of one of the exceptions in
industry interest in their application, we consistent with fair market value by § 411.357(c), (d), or (l). We are soliciting
are revisiting the ‘‘stand in the shoes’’ design and not determined in a manner public comments on this issue.
policy and regulations issued in Phase that takes into account (directly or As described above, a physician-
III. We believe that a more refined indirectly) the volume or value of any employee or contractor whose
approach to the ‘‘stand in the shoes’’ referrals by the physician to the compensation arrangement with a
provisions would accomplish our goals physician organization. Although such physician organization does not satisfy
of simplifying the analysis of many compensation could, in some the requirements of § 411.357(c), (d), or
financial arrangements and reducing circumstances, be determined in a (l) would stand in the shoes of the
program abuse by bringing more manner that takes into account (directly physician organization. This is
financial relationships within the scope or indirectly) the volume or value of the necessary to address our concern that an
of the physician self-referral law (such physician’s referrals to the DHS entity arrangement between a DHS entity and
as certain potentially abusive (see 66 FR 869), we believe that the risk a physician organization that
arrangements between DHS entities and of program or patient abuse will be compensates its physicians in a manner
physician organizations that may not addressed sufficiently by analyzing such that does not satisfy the requirements of
have met the definition of an ‘‘indirect arrangements between DHS entities and an exception may be particularly prone
compensation arrangement’’). We note referring physicians who do not stand in to abuse. For example, where a
that we are not suggesting that support the shoes of their physician physician-employee’s compensation
payments and other similar organizations using the rules regarding arrangement with his or her group
compensation arrangements are without indirect compensation arrangements. practice exceeds fair market value for
risk of program or patient abuse, nor are Therefore, under this proposal, if the services provided to the group practice
we endorsing such payments and compensation arrangement between a employer (and, thus, does not satisfy the
arrangements. physician organization and one of its requirements of the exception in
We are proposing here two alternative referring physicians satisfies the § 411.357(c)), and the physician-
ways to address the ‘‘stand in the shoes’’ requirements of one of the exceptions employee’s DHS referrals to the group
jlentini on PROD1PC65 with PROPOSALS2
issues described above, and are seeking noted above, the referring physician practice instead are protected under the
industry input on each proposal, as well would be deemed not to stand in the exception for in-office ancillary services
as on other possible approaches. The shoes of the physician organization for in § 411.355(b), there is risk that the
first is a multi-faceted approach to purposes of applying the definitions of, physician-employee’s above-fair-market-
revising the Phase III ‘‘stand in the and provisions related to, direct and value compensation may reflect the
shoes’’ provisions. The second proposal indirect compensation arrangements in volume or value of referrals to the DHS
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23687
entity. This could be the result of a component of an AMC to a physician entities in a wide range of
support or other payment between the organization affiliated with that AMC circumstances, including, without
DHS entity and the group practice that through a written contract to provide limitation, arrangements involving:
is designed to channel compensation to services required to satisfy the AMC’s variable, per-click, or percentage-based
the physician-employee for referrals to obligations under the Medicare graduate compensation; exclusive contracts;
the DHS entity. medical education (GME) rules where inflated fixed payments; or explicit or
We are also considering, and solicit the contract is limited to only services implicit tying of compensation to other
comments on, an approach under which necessary to fulfill the GME obligations referrals. To address this issue, we may
only owners of a physician organization as set forth in 42 CFR, Part 413, Subpart provide additional guidance on the
would stand in the shoes of that F. We have in mind certain application of the three elements of the
physician organization (in which case, a arrangements between a hospital definition of ‘‘indirect compensation
physician would not stand in the shoes component of an AMC and a arrangement’’ in the FY 2009 IPPS final
of a physician organization unless he or community physician group to serve as rule. We are interested in public
she holds an ownership or investment a teaching site for the AMC’s residents, comments regarding ways in which we
interest, even if the physician’s as required by the GME rules. If can ensure that the full range of
compensation arrangement with that adopted, this proposal would not mean potentially abusive arrangements
physician organization does not satisfy that such arrangements necessarily are between DHS entities and physician
the requirements of § 411.357(c), (d), or lawful, but rather that they would be organizations are appropriately
(l)). In conjunction with this approach, analyzed by applying the rules addressed in situations where
we are interested in receiving comments regarding indirect compensation physicians do not stand in the shoes of
on whether and under what arrangements. their physician organizations.
circumstances the ‘‘stand in the shoes’’
Under this first proposal, if adopted, As discussed above, we are proposing
provisions should apply to a physician
some referring physicians would no an alternative approach to addressing
organization that has no physician
longer stand in the shoes of their the Phase III ‘‘stand in the shoes’’
owners.
In this first approach, we also propose physician organizations as they provisions. (However, we are proposing
to revise § 411.354(c)(3)(ii) to provide currently do under the Phase III ‘‘stand regulation text for the first proposal
that the provisions of §§ 411.354(c)(1)(ii) in the shoes’’ provisions. In such only.) Our alternative proposal is to
and (c)(2)(iv) do not apply when the circumstances, the rules regarding direct make no revisions to the Phase III
requirements of § 411.355(e) are and indirect compensation ‘‘stand in the shoes’’ provisions in
satisfied. In other words, a physician arrangements would still apply, and §§ 411.354(c)(1)(ii), (c)(2)(iv), and, (c)(3)
would not stand in the shoes of his or financial relationships would still need and, to the extent necessary to protect
her physician organization (for example, to be analyzed for compliance with the nonabusive arrangements, promulgate a
a faculty practice plan) when his or her statute and regulations. We are separate exception using our authority
referral for DHS is protected under the concerned that, where physicians do not under section 1877(b)(4) of the Act to
exception in § 411.355(e) for services stand in the shoes of their physician create exceptions for arrangements that
provided by an AMC. We note that, if organizations, some potentially abusive do not pose a risk of program or patient
all of the requirements of the exception arrangements between DHS entities and abuse. The new exception would apply
in § 411.355(e) are not satisfied, a physician organizations might be to specific types of nonabusive
physician would stand in the shoes of viewed incorrectly as falling outside the payments or arrangements that are not
his or her physician organization unless, definition of an ‘‘indirect compensation otherwise covered by existing
as discussed above with respect to arrangement’’ at § 411.354(c)(2) and, exceptions (for example, certain support
proposed revised § 411.354(c)(2)(iv), the therefore, as not within the scope of the payments, as described above), subject
compensation from the physician physician self-referral law. The to conditions necessary to protect
organization to the physician satisfies definition of ‘‘indirect compensation against program and patient abuse,
the requirements of the exception for arrangement’’ generally requires that similar to those conditions incorporated
bona fide employment relationships, the three elements be present: (1) An into the existing exception for services
exception for personal service unbroken chain of financial provided by an AMC in § 411.355(e).
arrangements, or the exception for fair relationships between the DHS entity Specifically, we are considering
market value compensation in and the referring physician; (2) establishing a new exception, using our
§ 411.357(c), (d), and (l), respectively. aggregate compensation to the referring authority under section 1877(b)(4) of the
We are proposing to include a specific physician (from the entity in the chain Act, for compensation arrangements
revision to the regulation in closest to the physician) that varies with between DHS entities and physician
§ 411.354(c)(2)(iv); however, we are or takes into account in any manner the organizations and physicians for
seeking public comment as to whether volume or value of referrals to, or other ‘‘mission support’’ payments (or similar
this policy is better achieved by revising business generated for, the DHS entity; compensation arrangements) and, if so,
§ 411.354(c)(3) to delete the reference to and (3) knowledge by the DHS entity how we should define those payments
applying the exceptions in § 411.355, that the referring physician receives (or similar compensation arrangements),
and thereby providing that the ‘‘stand in such compensation. (We refer readers to and what criteria such an exception
the shoes’’ provisions do not apply 66 FR 864 through 870, 69 FR 16057 should include to protect against
where the prohibition on referrals is not through 16063, and 72 FR 51026 program or patient abuse. We are
applicable because all of the through 51031 for further explanation.) soliciting comments about this proposal,
requirements of any of the exceptions in We believe that some parties may be including whether an exception should
jlentini on PROD1PC65 with PROPOSALS2
§ 411.355 are satisfied. construing these elements (particularly be limited to ‘‘mission support’’
In this first approach, we also propose the second and the third) too narrowly. payments, whether other specific types
to revise § 411.354(c)(3)(ii) to provide For example, we believe that aggregate of payments or compensation
that the provisions of § 411.354(c)(1)(ii) compensation can vary with or take into arrangements should be eligible for such
and (c)(2)(iv) do not apply when account the volume or value of referrals an exception, the types of parties that
compensation is provided by a to, or business generated for, DHS should be permitted to use the
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23688 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
exception (for example, AMC substantially integrated by common physician—DHS entity financial
components, physician practices), and ownership or control, and which relationships. Specifically, we proposed
the conditions that should apply to such includes at least one hospital and one to amend § 411.354(c) to provide that,
an exception to ensure that a protected physician organization that has no where a DHS entity owns or controls an
compensation arrangement poses no physician owners or investors who entity to which a physician refers
risk of program or patient abuse. We are make referrals for DHS to any Medicare patients for DHS, the DHS
concerned that some ‘‘mission support’’ component of the health care delivery entity would stand in the shoes of the
payments or similar payments are system. Entities that file consolidated entity that it owns or controls and
subject to fraud and abuse. We are financial statements could be deemed to would be deemed to have the same
interested in public comments that be substantially integrated for purposes compensation arrangements with the
identify with specificity the types of of this definition. For purposes of this same parties and on the same terms as
compensation agreements that should approach, ownership could exist if an does the entity that it owns or controls.
be permitted under an applicable individual or individuals possess 50 For example, a hospital would stand in
exception. percent ownership or equity in the the shoes of a medical foundation that
Under this approach, the proposed component of the integrated health care it owns or controls (such as where the
exception might address compensation delivery system, and control would hospital is the sole member of a
arrangements between components of exist if an individual or an organization nonprofit corporation). Thus, under the
certain well-defined integrated delivery has the power, directly or indirectly, CY 2008 PFS proposed rule proposal, if
systems, perhaps with tightly-crafted significantly to influence or direct the a hospital owns or controls a medical
conditions similar to those in the actions or policies of the component of foundation that contracts with a
existing exception for services provided the integrated health care delivery physician to provide physician services
by an AMC in § 411.355(e). For system. As noted above, it would be at a clinic owned by the medical
example, some industry stakeholders necessary to define ‘‘integrated health foundation, the hospital would stand in
have recommended that we establish an care delivery system,’’ as well as the shoes of the medical foundation and
exception for compensation ‘‘ownership’’ and ‘‘control,’’ and to would be deemed to have a direct
arrangements between a DHS entity determine whether to permit integrated compensation relationship with the
component of an integrated health care health care delivery systems to include contractor physician. We solicited
delivery system and a physician entities related through written public comments as to whether and how
organization component of the same contractual affiliation agreements and, if we would employ a ‘‘stand in the
integrated health care delivery system. so, what limitations (if any) should be shoes’’ approach for these types of
We are concerned that the term placed on the types of contractually relationships, as well as for other types
‘‘integrated health care delivery system’’ affiliated entities we would permit to be of financial relationships.
is loosely used in the industry to included as components of an integrated In response to the CY 2008 PFS
describe a wide variety of systems, with health care delivery system. We would proposed rule, we received comments
varying degrees of actual integration, need also to determine what from a variety of industry stakeholders,
and that it may prove infeasible to craft characteristics indicate substantial including physicians, medical
a sufficiently circumscribed definition. integration and identify the types of associations, and their representatives.
In many circumstances, payment compensation arrangements that exist Although several commenters supported
arrangements between components of between components of integrated the proposed entity ‘‘stand in the shoes’’
‘‘integrated health care delivery health care delivery systems. We are provisions because they share our
systems,’’ as well as payments from seeking public comments regarding this concerns regarding parties ability to
‘‘integrated health care delivery possible approach (including the avoid application of the physician self-
systems’’ to physicians affiliated with specific issues noted), as well as public referral law by simply inserting an
those systems are susceptible to fraud comments on other alternative entity in the chain of financial
and abuse. However, we are soliciting approaches to addressing the concerns relationships linking a DHS entity and
public comments defining a fully regarding support payments and similar a referring physician, many commenters
integrated health care delivery system, monetary transfers noted by industry expressed concern that the proposal was
what types of compensation stakeholders and described above. unclear and potentially overly broad.
arrangements should be protected (for Commenters requested guidance
example, support payments), and what 2. DHS Entity ‘‘Stand in the Shoes’’ regarding the level of ownership or
conditions should be included in an Provisions control that would trigger the
exception that would ensure no risk of On July 12, 2007, we published in the application of the entity ‘‘stand in the
program or patient abuse. We note that Federal Register a proposed rule shoes’’ provisions. One commenter
any exception established using our entitled ‘‘Medicare Program; Proposed recommended that, instead of finalizing
authority under section 1877(b)(4) of the Revisions to Payment Policies Under the the entity ‘‘stand in the shoes’’
Act would include documentation Physician Fee Schedule, and Other Part provisions, we issue, through a notice of
requirements and a requirement that the B Payment Policies for CY 2008; proposed rulemaking, a more detailed
arrangement not violate the anti- Proposed Revisions to the Payment proposal that would give industry
kickback statute or any Federal or State Policies of Ambulance Services Under stakeholders the opportunity to provide
law or regulation governing billing or the Ambulance Fee Schedule for CY more meaningful comments.
claims submission, consistent with the 2008; and the Proposed Elimination of We did not finalize the DHS entity
existing exceptions created under this the E-Prescribing Exemption for ‘‘stand in the shoes’’ provisions in the
authority. Computer-Generated Facsimile CY 2008 PFS final rule published in the
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According to some industry Transmissions; Proposed Rule’’ (the Federal Register on November 27, 2007
stakeholders, an ‘‘integrated health care ‘‘CY 2008 PFS proposed rule’’) (72 FR (72 FR 66222, 66306). Because the DHS
delivery system’’ could be defined, for 38122). In that rule, we proposed a entity ‘‘stand in the shoes’’ provisions
example, as a health care delivery corollary provision to the Phase III are integrally related to the physician
system comprised of two or more ‘‘stand in the shoes’’ provisions that ‘‘stand in the shoes’’ provisions that we
entities that are related and addressed the DHS entity side of finalized in Phase III and for which we
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23689
are proposing the regulatory revisions involving various corporate and other practice). By contrast, the example of a
described above, we are re-proposing entities exist in a chain of financial chain of financial relationships that
here the DHS entity ‘‘stand in the relationships between a DHS entity and runs: hospital—group practice wholly-
shoes’’ provisions, with some a referring physician, we are proposing owned by the hospital—employed
modification. We believe that a that, when applying the physician physician of the group practice (whose
comprehensive approach to the ‘‘stand ‘‘stand in the shoes’’ provisions and the compensation does not satisfy the
in the shoes’’ provisions that addresses entity ‘‘stand in the shoes’’ provisions to requirements of the exception in
both physicians and physician a chain of financial relationships § 411.357(c)), is illustrative. If the
organizations, as well as DHS entities between a physician and a DHS entity, relationship between the hospital and
and other entities that they own or the following conventions would apply: the group practice is solely an
control, is the best vehicle to address • First, parties would apply the ownership interest (that is, there is no
the goals outlined in the Phase III final physician ‘‘stand in the shoes’’ separate compensation arrangement
rule, namely: (1) Simplifying the provisions and deem the physician to between them), applying the physician
analysis of many financial stand in the shoes of his or her
‘‘stand in the shoes’’ provisions first, so
arrangements; and (2) reducing program physician organization (in those
that the physician-employee stands in
abuse by bringing more financial instances where the physician ‘‘stand in
the shoes of the group practice, would
relationships within the ambit of the the shoes’’ provisions apply to the
particular physician and physician result in one remaining financial link
physician self-referral law.
We are proposing to revise organization). between the group practice and the
§ 411.354(a) to provide that an entity • However, if applying the physician hospital, and that relationship would be
that furnishes DHS would be deemed to ‘‘stand in the shoes’’ provisions would an ownership interest. In those
stand in the shoes of an organization in result in only one financial relationship circumstances, the entity ‘‘stand in the
which it has a 100 percent ownership remaining between the DHS entity and shoes’’ provisions would be applied first
interest and would be deemed to have the ‘‘collapsed’’ physician/physician and the hospital would stand in the
the same compensation arrangements organization and that relationship is an shoes of its wholly-owned group
with the same parties and on the same ownership interest, the physician practice. The physician would not stand
terms as does the organization that it ‘‘stand in the shoes’’ provisions would in the shoes of the group practice. The
owns. We believe this approach is not be applied, and the entity ‘‘stand in remaining financial relationship would
straightforward and can be readily the shoes’’ provisions instead would be be deemed to be a direct compensation
applied. We note that, under this applied first. arrangement between the hospital
approach (as compared to our CY 2008 • If more than two organizations (standing in the shoes of the group
PFS proposal), a DHS entity would remain after first ‘‘collapsing’’ the practice) and the physician. (We note
stand in the shoes of any wholly-owned physician and the physician that, in this example, the physician’s
organization, not merely a wholly- organization (that is, if at least two links compensation from the group practice
owned DHS entity. An organization may remain in the chain of financial does not satisfy the requirements of the
be in any legal form (for example, a relationships between the physician exception for bona fide employment
limited liability company, partnership, who is standing in the shoes of his or relationships in § 411.357(c) and, thus,
or corporation, regardless of status as her physician organization and the DHS no direct exception would apply to that
nonprofit or exempt from taxation). We entity), the next step would be to apply compensation arrangement.) Using the
are seeking public comments the entity ‘‘stand in the shoes’’ same chain of financial relationships,
specifically as to whether we should provisions. but assuming instead that the hospital
consider a DHS entity to stand in the These conventions ensure that at least has a compensation arrangement with
shoes of another organization in which one compensation arrangement remains (in addition to being the sole owner of)
the DHS entity holds less than a 100 between the DHS entity and the the group practice (for example, an
percent ownership interest and, if so, referring physician for purposes of office space rental agreement), under the
what amount of ownership should analyzing the chain of relationships proposals described above, the
trigger application of the entity ‘‘stand under the physician-self referral rules. physician would stand in the shoes of
in the shoes’’ provisions. In addition, For example, if a chain of financial the group practice, but the hospital
we are seeking public comments as to relationships runs: hospital—wholly-
would not stand in the shoes of the
whether we should deem a DHS entity owned home health agency—group
group practice because, after first
to stand in the shoes of an organization practice—physician owner of the group
applying the physician ‘‘stand in the
that it controls (for example, an entity practice, the first step would be to apply
shoes’’ provisions, only two
would stand in the shoes of a nonprofit the physician ‘‘stand in the shoes
organizations would remain (that is,
organization of which it is the sole provisions’’ such that the physician
only one link in the chain of financial
member); we would consider a DHS owner would stand in the shoes of the
group practice. The next step would be relationships remains). The remaining
entity to control an organization if the financial relationship created by the
DHS entity has the power, directly or to apply the entity ‘‘stand in the shoes’’
provisions and deem the hospital to rental agreement would be deemed to be
indirectly, significantly to influence or a direct compensation arrangement
direct the actions or policies of the stand in the shoes of its wholly-owned
home health agency. Assuming that the between the hospital and the physician,
organization. We are seeking public which would need to satisfy the
comments as to what level of control financial relationship between the home
health agency and the group practice is requirements of an exception.
should trigger the application of the
entity ‘‘stand in the shoes’’ provisions. a compensation arrangement, the We are not proposing regulation text
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23690 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
related to the application of the interpret our rules as requiring only that employ a case-by-case approach or
provisions. the physician stand in the shoes of the deem certain types of financial
PC and not in the shoes of the group relationships to continue for a
4. Definitions: ‘‘Physician’’ and
practice, so that the resulting chain of prescribed period of time. We also
‘‘Physician Organization’’
financial relationships (after the solicited public comments as to whether
In an interim final rule with comment application of the ‘‘stand in the shoes’’ we should allow a prescribed period of
period entitled ‘‘Medicare Program; provisions) would run: hospital—group disallowance to terminate where the
Physicians’ Referrals to Health Care practice—PC/physician. However, our parties have returned (or paid back the
Entities With Which They Have intention was that, after application of value of) any excess compensation. For
Financial Relationships (Phase II); the ‘‘stand in the shoes’’ provisions, the example, if we were to impose a period
Interim Final Rule,’’ published in the chain of financial relationships would of disallowance for a prescribed period
Federal Register on March 26, 2004 (72 run: hospital—group practice/PC/ of time because it would not be clear
FR 16054) (‘‘Phase II’’), we revised the physician. when a noncompliant compensation
definition of ‘‘referring physician’’ at Therefore, we are proposing revisions arrangement ended, we stated that we
§ 411.351 to provide that a referring to the definitions of ‘‘physician’’ and might allow the parties to terminate the
physician is deemed to stand in the ‘‘physician organization’’ to clarify that: period of disallowance sooner than the
shoes of his or her wholly-owned PC (69 (1) A physician and the PC of which he prescribed period if the prohibited
FR 16060). In that rule, we stated that or she is the sole owner are always compensation were returned. In the CY
it is not necessary to treat a referring treated the same for purposes of 2008 PFS proposed rule, we cautioned
physician as separate from his or her applying the physician self-referral that we did not envision allowing such
wholly-owned PC. In the Phase III final rules; and (2) a physician who stands in an option where the parties knew or, in
rule, for purposes of implementing the the shoes of his or her wholly-owned PC our judgment, reasonably should have
physician ‘‘stand in the shoes’’ also stands in the shoes of his or her known, that the arrangement did not
provisions, the term ‘‘physician physician organization in accordance satisfy the requirements of an exception.
organization’’ was newly defined at with § 411.354(c)(1)(ii) and (c)(2)(iv). Finally, we sought public comments as
§ 411.351 as ‘‘a physician (including a to whether we should impose a period
professional corporation of which the B. Period of Disallowance
of disqualification, prohibiting the
physician is the sole owner), a In response to the Phase II interim
parties from using an exception where
physician practice, or a group practice final rule with comment period, several
an arrangement has failed to satisfy the
that complies with the requirements of commenters questioned what the time
requirements of that exception. We gave
§ 411.352.’’ Our intent was that, when period would be for which the
the example of nonmonetary
applying the physician ‘‘stand in the physician could not refer patients for
DHS to an entity and for which the compensation provided by an entity to
shoes’’ provisions in § 411.354, a
entity could not bill Medicare (the a physician that greatly exceeded the
physician would stand in the shoes of:
‘‘period of disallowance’’) where a permissible limit prescribed in
(1) Another physician who employs the
financial relationship between a § 411.357(k), and questioned whether,
physician; (2) his or her wholly-owned
referring physician and an entity failed in addition to whatever period of
PC; (3) a physician practice that
to satisfy the requirements of an disallowance would apply, the parties
employs or contracts with the physician
exception to the general prohibition on should be disqualified, for some period
or in which the physician has an
ownership interest; or (4) a group self-referral. (See 72 FR 51024 through of time, from using this exception.
practice of which the physician is a 51025; and 72 FR 38183.) In the Phase We received few public comments in
member or independent contractor. III final rule, in response to these response to the CY 2008 PFS proposed
Essentially, we intended this inquiries, we stated that the statute rule solicitation of comments; however,
definition to incorporate the Phase II provides no explicit limitation on the with respect to the length of the period
policy that a physician stands in the billing and claims submission of disallowance, one commenter
shoes of, or is considered the same as, prohibition (72 FR 51025). In the CY asserted that the appropriate period of
the PC of which he or she is the sole 2008 PFS proposed rule, we stated that disallowance should match the period
owner. In determining whether a direct the statute contemplates that the period that the financial relationship did not
or indirect compensation arrangement of disallowance begins with the date satisfy the requirements of an exception,
exists between a DHS entity and a that a financial relationship failed to but that the period should be limited to
referring physician, we intended that comply with the statute and the a maximum term. In addition,
parties should first ‘‘collapse’’ the regulations, and ends with the date that commenters asserted that, if the parties
physician into his or her wholly-owned the arrangement came into compliance unwind the relationship and return the
PC, and then deem that ‘‘collapsed’’ or ended (72 FR 38183). We noted that, prohibited compensation, the period of
physician/PC unit to stand in the shoes in some cases, it may not be clear when disallowance should end. Another
of the physician organization (if one a financial relationship has ended. We commenter suggested that the period of
exists). However, we are concerned that provided the example of an entity disallowance should end once the
parties may interpret the rules, using the leasing space to a physician at a rental hospital corrects or terminates the
definition of ‘‘physician organization’’ price that is substantially below fair arrangement and the physician repays to
exclusive of the definition of ‘‘referring market value. We stated that such an the hospital any compensation in excess
physician,’’ as requiring only that they arrangement may raise the inference of what is permitted. Alternatively,
deem a physician to stand in the shoes that the below-market rent was in according to the commenter, if the
of his or her wholly-owned PC without exchange for future referrals, including physician does not repay the excess
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further deeming the ‘‘collapsed’’ referrals made beyond the expiration of compensation, the period of
physician/PC unit to stand in the shoes the lease. We solicited comments with disallowance should end once the
of the physician organization. That is, respect to: (1) The types of hospital repays to Medicare the excess
with respect to a chain of financial noncompliance for which it is not clear compensation, and the hospital should
relationships that runs: hospital—group when a financial relationship ended; be prohibited from paying any further
practice—PC—physician, parties might and (2) whether we should always compensation to the physician until the
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23691
physician reimburses the hospital for period of disallowance would begin on was identified on June 30 of Year 2, the
the excess compensation. One the date the arrangement first was out of period of disallowance would run from
commenter asserted that certain compliance and end no later than the January 1 of Year 2 until no later than
circumstances warrant no period of date the excess compensation (including June 30 of Year 2, provided that the
disallowance. For instance, according to interest, as appropriate) was returned by physician paid the hospital on June 30
the commenter, if parties to an the party receiving it to the party that of Year 2 the shortfall of $1 per square
arrangement were unaware that the provided it and all other requirements foot for the 6-month shortfall period
arrangement violates the physician self- of the applicable exception are met. For (plus interest, as appropriate) and, as of
referral law but later were notified by example, if a hospital provided July 1 through the term of the
CMS or its contractor of the possible nonmonetary compensation totaling agreement, the physician paid $21 per
violation, they should be able to amend $100 in excess of the limits in square foot for the office space, and the
the arrangement so that it satisfies the § 411.357(k) on February 1 and the arrangement otherwise satisfied the
requirements of an exception without parties did not discover the requirements of the exception in
any period of disallowance. The noncompliance until October 1 (and, § 411.357(d). As discussed below, we
commenter also asserted that there therefore, could not avail themselves of believe that it is possible that an
should be no period of disqualification the provisions in § 411.357(k)(3) arrangement may end prior to excess
preventing the parties from using an permitting parties to remain in compensation being returned or a
exception in light of the onerous compliance with the exception if excess shortfall being paid; however, such a
penalties under the physician self- nonmonetary compensation (within determination as to the duration of the
referral law. certain limits) provided inadvertently is period of disallowance necessarily
At this time, we are proposing to discovered and returned with 180 days would be made on a case-by-case basis
amend § 411.353(c) to provide that, of its receipt), the period of considering the facts and circumstances,
where the reason(s) a financial disallowance would begin on February and we are not proposing a prescribed
relationship does not meet any 1 and end no later than the date that the period of disallowance for such a
applicable exception is not related to physician returned the excess situation.
compensation (for example, a signature nonmonetary compensation or its value We also note that an arrangement may
is missing or an agreement is not in ($100 plus interest, as appropriate) to be noncompliant for reasons that are
writing as required by the applicable the hospital. Assuming that the related to compensation, but which do
exception), the period of disallowance physician paid the hospital $100 (plus not involve the payment or receipt of
would begin on the date the interest, as appropriate) on October 15, excess compensation or a shortfall in
arrangement first was out of compliance the period of disallowance would run compensation paid or received. For
and end no later than the date the from February 1 through no later than example, many of our exceptions
arrangement was brought into October 15. require that the compensation not take
compliance (for example, by obtaining a into account the volume or value of
missing signature on an agreement or Our proposal would also prescribe a referrals or other business generated
executing a written agreement as period of disallowance where the reason between the parties and that the
required by the applicable exception). a financial relationship does not meet compensation be commercially
For example, where a hospital and a any applicable exception is related to reasonable, even if no referrals were
physician enter into a personal service the payment or receipt of compensation made between the parties. It is possible
arrangement for medical director that is insufficient to satisfy the that the amount of compensation
services and begin performing under the requirements of an exception (for provided under an arrangement is fair
arrangement on January 1, but do not example, office space or equipment market value or is consistent with a
execute a written agreement until rental payments that are below fair prescribed limit in one of the exceptions
January 31, provided that all of the market value). We are proposing that the (such as in § 411.357(k)), but, for
requirements of § 411.357(d) (the period of disallowance would begin on example, takes into account the volume
exception for personal service the date the arrangement first was out of or value of referrals and this results in
arrangements) are satisfied as of January compliance and end no later than the a noncompliant arrangement. We are
31, the period of disallowance would date the shortfall was paid to the party not proposing a prescribed period of
begin on January 1 and end no later than to which it is owed and all other disallowance for arrangements that are
January 31. As discussed below, we requirements of the applicable noncompliant for reasons that are
believe that it is possible that a financial exception are met. The ‘‘shortfall’’ related to compensation but which do
arrangement may end prior to the would be that amount (including not involve only the payment or receipt
arrangement being brought into interest, as appropriate) necessary to of excess compensation or a shortfall in
compliance. In such circumstances, a bring the arrangement into compliance compensation paid or received. Rather,
determination as to the duration of the from the date of its inception. For the appropriate period of disallowance
period of disallowance necessarily example, assume a hospital and for such arrangements would need to be
would be made on a case-by-case basis physician entered into a 2-year office determined on a case-by-case basis.
considering the facts and circumstances, space rental agreement on January 1 (of Essentially, our proposals place an
and we are not proposing a prescribed Year 1) which specified rental charges outside limit on the period of
period of disallowance for such a (consistent with fair market value) of disallowance in certain circumstances.
situation. $20 per square foot during Year 1 and That is, where the reason(s) for
We are also proposing that, where the automatically adjusted upward each noncompliance does not relate to
reason a financial relationship does not January 1 by any increase in the CPI–U. compensation, the latest the period of
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meet any applicable exception is related If, on January 1 of Year 2 of the disallowance would end would be the
to the payment or receipt of excess agreement, the rental charges increased date the arrangement was brought into
compensation (for example, the to $21 per square foot based on the compliance. Where the reason for
compensation paid to a physician is amount of increase in the CPI–U, but the noncompliance is the fact that excess
greater than fair market value or exceeds physician continued to pay $20 per compensation was provided or too little
the limits in § 411.357(k) or (m)), the square foot until the compliance failure compensation was paid, the latest the
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23692 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
period of disallowance would end applicable due to noncompliant of the hospital’s variable cost savings
would be the date that the party financial relationships. attributable to the physicians’ efforts in
receiving the excess compensation We are not proposing, as one controlling the cost of providing patient
returned it to the party that provided it commenter suggested, that, in a care. Following the institution of the
or the party owing the shortfall in situation involving noncompliance due Medicare Part A DRG system of hospital
compensation paid it to the party to to excess compensation paid by an reimbursement and with the growth of
which it was owed (assuming the entity to a physician (or the physician’s managed care, hospitals have
arrangement otherwise satisfies the immediate relative), the period of experienced significant financial
requirements of an applicable disallowance would end no later than pressure to reduce costs. However,
exception). the date the entity repays the excess because physicians are paid separately
We recognize, of course, that parties compensation to the Medicare program, under Medicare Part B and Medicaid,
to a financial relationship that is should the physician not repay the physicians do not share necessarily a
noncompliant may never bring the excess compensation to the entity. This hospital’s incentive to control the
relationship into compliance with an approach is not consistent with the hospital’s patient care costs.
applicable exception. The financial statute. We are also not proposing, as Gainsharing arrangements are designed
relationship may expire according to the another commenter suggested, to to align hospital and physician
terms of the underlying agreement (such impose no period of disallowance for incentives by offering physicians a
as the date of expiration of a personal the situation in which parties allegedly portion of the hospital’s cost savings in
service contract), or it may end earlier were unaware of the noncompliant exchange for identifying and
or later than the expiration date nature of a financial relationship. We do implementing cost-saving strategies.
provided in the underlying agreement. not have the authority under section 2. Statutory Impediments to Gainsharing
However, we do not propose to 1877 of the Act to waive violations of Arrangements
prescribe with specificity when such a the physician self-referral law. We note
also that there would be practical Whereas gainsharing promotes
noncompliant financial relationship hospital cost reductions by aligning
(and, thus, the period of disallowance) problems in determining whether
parties were unaware of the physician incentives with those of the
might end. Likewise, if a party that hospital, these arrangements also
receives excess compensation never noncompliant nature of the arrangement
and that we would be discouraging implicate the physician self-referral
repays the excess compensation, or a statute (section 1877 of the Act). Section
party who owes additional parties from carefully structuring
arrangements and monitoring them. In 1877(a)(1) of the Act states that, except
compensation (the shortfall) never pays as provided in section 1877(b) of the
it, the question arises as to when the the CY 2008 PFS proposed rule, we
proposed an alternative method of Act, if a physician (or an immediate
financial relationship ends. To return to family member of such physician) has a
the example that we gave in the CY compliance that may address some of
the commenter’s concerns, and that financial relationship with an entity, the
2008 PFS proposed rule and that we physician may not make a referral to the
reference above, if an entity leases space proposal is still under consideration for
entity for the furnishing of DHS for
to a physician at a rental price that is final rulemaking. Finally, we are not
which payment otherwise may be made
substantially below fair market value, proposing to impose a period of
under title XVIII of the Act. The
the inference may be raised that the disqualification during which the
provision of monetary or nonmonetary
below-market rent was in exchange for parties to a noncompliant financial
remuneration by a hospital to a
future referrals, including referrals made relationship would be prohibited from
physician through a gainsharing
beyond the expiration of the lease using a particular exception due to that
arrangement would constitute a
agreement. Therefore, in such a relationship. We may propose
financial relationship with an entity for
situation, if the physician does not pay rulemaking on this subject in the future.
purposes of the physician self-referral
the rental charges shortfall, the financial C. Gainsharing Arrangements statute.
relationship may not end at the Gainsharing arrangements also
expiration of the written lease 1. Background
implicate two specific fraud and abuse
agreement, but rather could extend for The term ‘‘gainsharing’’ typically statutes. First, sections 1128A(b)(1) and
some period beyond the expiration of refers to an arrangement under which a (b)(2) of the Act, commonly referred to
the written lease agreement. We are not hospital gives physicians a share of the as the Civil Monetary Penalty, or CMP,
proposing to establish any specific time reduction in the hospital’s costs (that is, statute, prohibit a hospital from
period or even guidelines for when the the hospital’s cost savings) attributable knowingly making a payment directly or
financial relationship in the above in part to the physicians’ efforts. indirectly to a physician as an
example would be deemed to end (so Gainsharing may take several forms. inducement to reduce or limit items or
that future referrals would not be Some arrangements are narrowly services furnished to Medicare or
tainted); rather the determination of targeted, giving the physician a financial Medicaid beneficiaries, and a physician
when the financial relationship ends incentive to select specific medical from knowingly accepting such
must depend on the facts and devices and products that are less payment. Second, gainsharing
circumstances. We note that our expensive or to adopt specific clinical arrangements implicate section
proposals pertain only to placing an practices or protocols that reduce costs. 1128B(b) of the Act (the ‘‘anti-kickback
outside limit on the period of Other, more problematic arrangements statute’’) if one purpose of the cost
disallowance for making referrals and are not targeted at utilization of specific savings payment is to influence referrals
billing the Medicare program in the case supplies or specific clinical practices, of Federal health care program business.
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administrative sanctions on the and hospitals to work together to represents solely a share of the savings
requestors under section 1128A(a), or provide services more efficiently, incurred directly as a result of
under section 1128(b)(7) or section improve quality, and reduce costs. The collaborative efforts between the
1128A(a)(7), as those sections relate to bundling of the physician and hospital hospital and a particular physician (or
the commission of acts described in the payments did not have a negative practitioner) to improve overall quality
anti-kickback statute. impact on the post-discharge health and efficiency. Each demonstration
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23694 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
project must also provide measures to D. Physician-Owned Implant and Other invested in a POC that offers competing
monitor quality and efficiency in the Medical Device Companies products.
participating project hospital(s). In response to our proposed change to
1. Background the definition of ‘‘entity’’ at § 411.351 in
6. Solicitation of Comments the CY 2008 PFS proposed rule, we
We have recently become aware of an
increase in physician investment in received public comments regarding
In the CY 2008 PFS proposed rule, we
implant and other medical device whether a physician-owned implant or
noted that we are concerned about
manufacturing, distribution, and other medical device company should
compensation arrangements between or should not be considered to be an
entities and physicians under which purchasing companies. We recognize
that physician involvement often adds ‘‘entity.’’ One commenter noted that
compensation is determined on a orthopedic surgeons may have an
percentage basis (for example, rental value to device manufacturing
companies and that many physicians ownership interest in a manufacturer of
charges for office space that are spinal implants that sells its implants to
determined based on a percentage of a may have legitimate investment
interests in these companies. Physicians the hospital where the surgeon performs
group practice’s revenues) (72 FR his or her surgeries. According to the
38184). We proposed to clarify that participate in the research,
development, and testing involved in commenter, because the proposed
percentage-based compensation definition of ‘‘entity’’ would extend to
creating and producing many lifesaving
arrangements may be used only for an entity that ‘‘performs the DHS,’’ the
and quality-of-life enhancing medical
paying for personally performed manufacturer arguably could be
devices. The added value of physician
physician services and that such considered to be an ‘‘entity’’ under
involvement in distribution and
arrangements must be based on the § 411.351. This commenter urged us to
purchasing companies, essentially
revenues directly resulting from the exclude such manufacturers from the
middlemen companies, is less clear.
physician services rather than based on definition of ‘‘entity.’’ The commenter
When physicians profit from the
some other factor such as a percentage stated that indirect arrangements
referrals they make to hospitals through
of the savings by the hospital involving spinal implants would trigger
physician-owned implant and medical
department. The proposed changes, if the self-referral prohibition if they are
device companies (‘‘POCs’’), we are
finalized, might prevent typical not at fair market value. Comments
concerned about possible program or
gainsharing arrangements between submitted on behalf of a manufacturer
patient abuse. POCs exist in three of spinal implants asserted that, despite
physicians and hospitals to which they primary forms: manufacturers,
refer for DHS. We have not yet finalized superficial similarities, joint ventures
distributors, and group purchasing involving medical devices differ in
our proposal in the CY 2008 PFS final organizations (‘‘GPOs’’). Our many material ways from the types of
rule; however, it remains under active understanding, however, is that many arrangements about which we expressed
consideration. POCs are not manufacturers, but rather concern. This commenter also asserted
Notwithstanding our general concern are companies that profit from the that the meaning of ‘‘has performed the
with arrangements that involve the use purchase and resale of products made DHS’’ is unclear and that we should
of a percentage-based compensation by another organization (that is, they act clarify that the proposal applied only to
formula (other than payment to a as distributors) or from GPO fees paid ‘‘true’’ ‘‘under arrangement’’
physician for work personally by device vendors. In many cases, the relationships with hospitals, but that, in
performed by the physician), we physician investors bear little, if any, any event, implantable devices are not
recognize the value to the Medicare economic risk with respect to the DHS. According to the commenter, even
medical devices. It is also our if implantable devices were deemed to
program and its beneficiaries where the
understanding that some physicians are be DHS, the rigorous physician self-
alignment of hospital and physician
offered investment interests in ‘‘private referral exceptions (for example, the
incentives results in improvements in
label’’ or similar manufacturing entities exception for indirect compensation
quality of care. Therefore, we are
when the physicians have provided arrangements in § 411.357(p)) are still
considering whether to issue an little, if any, necessary research, design,
exception specific to gainsharing available to protect the arrangement and
or testing services. We are concerned against program or patient abuse.
arrangements. Under section 1877(b)(4) that some physician-owned
of the Act, we may issue additional In an October 6, 2006 letter response
organizations may serve little purpose to a request for guidance regarding
exceptions (that is, exceptions not other than providing physicians the certain physician investments in the
specified in the statute) only where opportunity to earn economic benefits medical device industry, OIG stated that
doing so would create no risk of in exchange for nothing more than it was aware of an apparent proliferation
program or patient abuse. At this time, ordering medical devices or other of physician investments in medical
we decline to issue a specific proposal products that the physician-investors device and distribution companies,
concerning an exception for gainsharing use on their own patients. The financial including GPOs, and that, given the
arrangements, but rather are soliciting incentives paid to the physicians may strong potential for improper
comments as to whether we should foster an anti-competitive climate, raise inducements between and among the
establish an exception for gainsharing quality of care concerns, and lead to physician investors, the companies,
arrangements, and, if so, what overutilization of the device or other device vendors, and medical device
safeguards should be included in the product to which the physician is purchasers, it believed that all of these
exception. Specifically, we are linked. Physicians are responsible for ventures should be closely scrutinized
interested in receiving comments on: (1) selecting or recommending the devices under the fraud and abuse laws. OIG
jlentini on PROD1PC65 with PROPOSALS2
What types of requirements and ordered for the hospital’s patients. It is also clarified that its 1989 Special Fraud
safeguards should be included in any reasonable to believe that medical Alert on Joint Ventures applies to all
exception for gainsharing arrangements; device or implant companies without physician joint ventures and would,
and (2) whether certain services, clinical physician investment will have therefore, apply to physician
protocols, or other arrangements should difficulty finding referral sources in investments in medical device
not qualify for the exception. areas where many physicians are manufacturing and distribution
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23695
companies, as well as GPOs. OIG the surgeries are performed but, IX. Financial Relationships Between
confirmed that the fact that a substantial provided the royalty payment was fair Hospitals and Physicians
portion of a venture’s gross revenues is market value, the relationship should
A. Background
derived from participant-driven referrals satisfy the exception for indirect
is a potential indicator of a problematic compensation arrangements in As stated earlier, under section 1877
joint venture. The October 6, 2006 letter § 411.357(p) (69FR 16060). of the Act, a physician is prohibited
response is available at http:// 2. Solicitation of Comments from referring a Medicare patient for
oig.hhs.gov/fraud/docs/ DHS to an entity (including an
alertsandbulletins/ At this time, we are not issuing a individual) with which the physician
GuidanceMedicalDevice%20(2).pdf. See specific proposal regarding POCs. The (or an immediate family member of the
also http://oig.hhs.gov/testimony/docs/ statute and our existing regulations, physician) has a financial relationship,
2008/demske_testimony022708.pdf. specifically those related to indirect unless an exception applies. In addition,
compensation arrangements, address section 1877 of the Act provides that an
A medical device company requested
many POCs. In some problematic entity may not present or cause to be
that we take a closer look at the current
circumstances, an unbroken chain of presented a claim or bill to Medicare or
prevalence of POCs and the impact that
financial relationships will connect the any individual, third party payor, or
these companies may have on program
physician owner of a POC to a DHS other entity for DHS furnished as a
or patient abuse, as well as the negative
entity to which the physician makes result of a prohibited referral. Also,
impact on competition among POCs and referrals, and the other elements of an
nonphysician owned medical device section 1877 of the Act prohibits us
indirect compensation arrangement from making payment for DHS
companies. This company noted that, in contained in § 411.354(c)(2) will also be
the CY2008 PFS proposed rule, we furnished pursuant to a prohibited
present, including the requisite referral. The statute contains several
proposed revising the definition of knowledge by the DHS entity of the
‘‘entity’’ to include, among other things, exceptions for certain types of
physician’s interest in the POC. In many compensation arrangements and
an entity that causes a claim to be instances, the arrangement would not
submitted to Medicare. It suggested that ownership or investment interests,
satisfy the requirements of the exception
we finalize our proposal and that we including the exception in section
for indirect compensation arrangements
deem POCs to be DHS entities under 1877(d)(3) of the Act for ownership or
in § 411.357(p), and would, therefore,
certain circumstances. It also suggested investment by a physician in the
run afoul of the physician self-referral
that, in certain circumstances, physician hospital itself and not merely in a
statute. However, we are soliciting
investors in POCs should be deemed to subdivision of the hospital (that is, the
public comments as to whether our
have a direct compensation relationship ‘‘whole’’ hospital). Section 1877(b)(4) of
physician self-referral rules should
with the hospitals that order and use the Act authorizes us to create
address POCs and similar physician
implantable devices furnished by the additional exceptions, provided that
owned companies more specifically, or
POCs. The company suggested that a whether the concerns surrounding POCs they do not create a risk of program or
POC should not be considered to have and similar organizations, to the extent patient abuse. As a result of the
caused a claim to be presented where that they are not addressed by the statutory exceptions in section 1877 of
the referring physician is named as an statute and our current rules, are better the Act, and the exceptions we have
inventor on an issued patent for the addressed through enforcement of the created using our authority under
implantable item, provided that the False Claims Act, the anti-kickback section 1877(b)(4) of the Act, our
physician does not receive any statute and similar fraud and abuse regulations contain approximately 40
remuneration from the POC based on laws, other public laws, and through exceptions to the prohibition on
the volume or value of his or her other applicable Federal, State, and physician self-referrals. (We refer
referrals, or where the physician’s local regulations. In this regard, we are readers to 42 CFR 411.351 through
investment interest satisfies the seeking comments as to whether, and to 411.357 of our regulations and the
requirements of the exception in what degree, physician investment in September 5, 2007 ‘‘Phase III’’ final rule
§ 411.356(a) for large, publicly traded POCs and similar organizations presents (72 FR 51012).)
entities. We note that it is not clear to risks of overutilization, substandard Section 1877(f) of the Act provides
us under what circumstances a patent care, and increased costs to the that: ‘‘Each entity providing covered
holder physician, who presumably Medicare program and its beneficiaries, items or services for which payment
receives royalty payments from the or whether the risk is confined to may be made under this title [42 USCS
POC, would receive remuneration that possible anti-competitive behavior. To 1395 et seq.] shall provide the Secretary
does not relate to the volume or value the extent that commenters believe that with the information concerning the
of referrals or other business generated certain physician investment in POCs entity’s ownership, investment, and
by the physician. In the Phase II final and similar organizations should be compensation arrangements, including:
rule with comment period, we noted addressed more specifically under our (1) The covered items and services
that we received a comment that physician self-referral rules, provided by the entity, and (2) the
questioned whether the payment of a commenters are encouraged to provide names and unique physician
royalty by an equipment manufacturer us with suggestions as to specific identification numbers of all physicians
to a physician inventor for a device actions we should take (for example, with an ownership or investment
implanted during surgeries performed considering POCs to be DHS entities interest (as described in subsection
by the physician inventor is permitted under certain circumstances, (a)(2)(A)), or with a compensation
or whether that arrangement would considering physician investors in POCs arrangement (as described in subsection
jlentini on PROD1PC65 with PROPOSALS2
create an indirect compensation who influence hospitals as to the (a)(2)(B)), in the entity, or whose
relationship with the hospital that ordering of medical devices to have immediate relatives have such an
purchased the device. We stated, in direct compensation relationships with ownership or investment interest or
response, that the physician inventor the hospitals, excepting certain who have a compensation relationship
would have an indirect compensation investment interests from coverage with the entity. Such information shall
arrangement with the hospital in which under our rules, etc.). be provided in such form, manner, and
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23696 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
at such times as the Secretary shall relationships for which there are no are regarded as such because they
specify.’’ (Emphasis added) exceptions under section 1877(a)(2)(A) receive benefits under a section 1115
Some industry representatives have or (a)(2)(B) of the Act. Therefore, we waiver) and (ii) charity care; and (5)
argued that the reference to financial proposed to amend § 411.361 to reflect appropriate enforcement. In order to
relationships as described in section explicitly our authority to ask for a assist us in preparing the report and
1877(a)(2)(A) and (a)(2)(B) of the Act broader scope of information than the implementing plan required by section
limits our ability to obtain information regulation permitted at that time. 5006 of the DRA, we sent a voluntary
on financial relationships that do not In the Phase II final rule with survey to 130 specialty hospitals and
satisfy one of the statutory or regulatory comment period (69 FR 16121), we 220 competitor hospitals, which sought
exceptions. We disagree. The statute modified the reporting requirement in information regarding, among other
clearly contains a broad authorization § 411.361 to remove all references to the things, the hospitals’ ownership and
for the Secretary to obtain information use of a prescribed form, to require investment relationships, and their
concerning an entity’s financial entities to make information available compensation arrangements with
relationships, ‘‘including,’’ but not only upon request, and to maintain the physicians. In the enforcement section
limited to, financial relationships that information only for the length of time of the strategic and implementing plan
satisfy an exception. We believe that specified by the applicable regulatory that was included in our ‘‘Final Report
there would have been little point to the requirements for the information (that to the Congress and Strategic and
Congress providing us with the is, the rules of the Internal Revenue Implementing Plan Required under
authority to compel information on Service, Securities and Exchange Section 5006 of the Deficit Reduction
excepted arrangements only, because, as Commission, Medicare, Medicaid, or Act of 2005’’ issued on August 8, 2006,
we have noted previously, ‘‘an entity other programs). In addition, we
available on our Web site at http://
could decide that one or more of its modified § 411.361 to provide that
www.cms.hhs.gov/
financial relationships falls within an entities need not report ownership or
PhysicianSelfReferral/
exception, fail to retain data concerning investment interests that satisfy the
06a_DRA_Reports.asp (hereinafter
those financial relationships, and exceptions in § 411.356(a) and (b) for
referred to as the ‘‘DRA Report to
thereby prevent the government from publicly-traded securities and mutual
Congress’’), we stated that we would
reviewing the arrangements to funds.
Most, if not all, hospitals have require all hospitals (that is, not just
determine if they qualify for an
financial relationships with referring specialty hospitals) to provide us
exception.’’ (72 FR 51069.) Accordingly,
our regulation in § 411.361 requires physicians. These financial information on a periodic basis
entities to report ‘‘any ownership or relationships may involve ownership or concerning the investment interests in
investment interest, as defined at investment interests, compensation the hospital of physicians and the
§ 411.354(b), or any compensation arrangements, or both. The financial hospital’s compensation arrangements
arrangement, as defined at § 411.354(c), relationships can be direct or they may with physicians (DRA Report to
except for ownership or investment be indirect (such as through a physician Congress 69). We stated that we would
interests that satisfy the exceptions set group practice or limited liability not limit our requirement to information
forth in § 411.356(a) and § 411.356(b) company). The physician self-referral concerning physician investments in
regarding publicly-traded securities and statute was first enacted in 1989, and specialty hospitals for two reasons.
mutual funds’’ (emphasis added). The the reporting requirements in the First, physician investments in any type
statute provides that an ownership or regulations in § 411.361 were first of hospital raise potential issues
investment interest in the entity may be implemented in our December 3, 1991 concerning compensation arrangements
through equity, debt, or other means, interim final rule with comment period, that can be associated with the
and includes an interest in an entity that published in the Federal Register at 56 investment. For example, a
holds an ownership or investment FR 61374. Since that time, CMS has not disproportionate return on investment
interest in any entity that furnishes engaged in a comprehensive reporting or non-bona fide investment (through,
DHS. initiative to examine financial for example, a sham loan), creates a
Our regulations have been drafted to relationships between hospitals and prohibited compensation arrangement
reflect clearly our commonsense physicians. Consistent with under the physician self-referral law
interpretation of the statutory reporting congressional intent in enacting the and raises the possibility of an illegal
requirements. In the proposed rule physician self-referral statute, we kickback scheme. Second, other types of
entitled ‘‘Medicare and Medicaid believe it is important to query hospitals compensation arrangements (that is,
Programs; Physicians’’ Referrals to concerning their financial relationships those that are not associated with an
Health Care Entities With Which They with physicians. investment interest), implicate the
Have Financial Relationships,’’ physician self-referral law, such as
published in the Federal Register on B. Section 5006 of the Deficit Reduction leasing, employment, and personal
January 9, 1998 (63 FR 1703), we Act (DRA) of 2005 service arangements. It is also important
proposed to modify § 411.361 to require Section 5006 of the DRA required the to note that, although a physician may
that entities report information Secretary to develop a strategic and be highly motivated to refer patients to
concerning their reportable financial implementing plan to address certain a hospital in which he or she has an
relationships to us on a prescribed form issues relating to physician-owned ownership interest, the physician may
and thereafter report annually all specialty hospitals. The specific issues be just as likely to refer patients to a
changes to the submitted information the Secretary was required to address hospital with which he or she has a
that occurred in the previous 12 were: (1) Proportionality of investment compensation relationship, given that
jlentini on PROD1PC65 with PROPOSALS2
months. In addition, we revisited the return; (2) bona fide investment; (3) the physician may see a more direct and
statute and interpreted the opening annual disclosure of investment immediate financial benefit from the
paragraph of section 1877(f) of the Act information; (4) the provision by compensation arrangement. In the DRA
to permit us to gather any data on specialty hospitals of (i) care to patients Report to Congress, we stated that we
financial relationships, including, but who are eligible for Medicaid (or who would implement a regular disclosure
not necessarily limited to, financial are not eligible for Medicaid but who process, but that we had not designed
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23697
the process at that point, and that we informed decision as to whether to spent completing the DFRR will be
would consider such issues as whether propose rulemaking for an annual (or spent by administrative staff. We believe
we should: (1) Survey all hospitals other periodic) disclosure requirement that the tasks involved would include
annually; (2) stagger our survey so that for all hospitals. By posing a retrieving the information and printing
all hospitals are queried but not all in comprehensive set of questions to a it from electronic files or copy it from
the same year; and/or (3) focus our significant number of hospitals, we hard files, which largely should involve
inquiry on certain types of relationships believe that we will be informed not administrative personnel. In addition,
or certain hospitals. We stated that we only as to whether we should engage in the review and organization of the
would also consider whether, having such rulemaking, but also as to what the materials would also impose burden on
once provided information, hospitals design of the proposed information the respondent. Nevertheless, in order
need only submit updated information collection should look like. to err on the side of more potential
on a yearly or other periodic basis. Originally, we had planned to pilot burden rather than less, we have
this information collection request in calculated costs using an hourly rate for
C. Disclosure of Financial Relationships advance of rulemaking. Thus, we accountants.
Report (DFRR) prepared a proposed information
Following up on our commitment to collection request in accordance with D. Civil Monetary Penalties
capture information concerning the Paperwork Reduction Act. We We are proposing that the DFRR be
financial relationships between all types announced and sought public comment completed, certified by the appropriate
of hospitals and physicians, and to on the information collection request in officer of the hospital, and received by
assist in enforcement of the physician a 60-day Federal Register notice (CMS– CMS within 60 days of the date that
self-referral statute and implementing 10236) that was published on May 18, appears on the cover letter or e-mail
regulations, we created an information 2007 (72 FR 28056). On September 14, transmission of the DFRR. We are
collection instrument, referred to as the 2007, we published in the Federal soliciting comment on the proposed 60-
Disclosure of Financial Relationships Register a revised information day timeframe for completing the DFRR.
Report (‘‘DFRR’’). The DFRR is designed collection request in which we Section 411.361(f) provides that
to collect information concerning the increased the time estimate for failure to timely submit the requested
ownership and investment interests and completing the DFRR and increased the information concerning an entity’s
compensation arrangements between time for submission of the DFRR from ownership, investment, and
hospitals and physicians. (Appendix C 45 days to 60 days (72 FR 52568). (For compensation arrangements may result
of this proposed rule contains the DFRR additional information, we refer the in civil monetary penalties of up to
instrument and instructions for public reader to 72 FR 28056 and 72 FR 52568.) $10,000 for each day beyond the
comment.) We believe information In this proposed rule, we are deadline established for disclosure.
submitted by hospitals would permit us providing a discussion of the potential Although we have the authority to
to analyze the types of financial burden associated with completing the impose civil monetary penalties, we
relationships involving hospitals and DFRR, including an analysis that seek not to invoke this authority and
physicians, the structure of various provides estimates of the burden for will work with entities to comply with
compensation arrangements and trends small, medium, and large hospitals. To the reporting requirements. Prior to
therein, and potentially whether the better understand the potential burden imposing a civil monetary penalty in
hospitals are in compliance with the for completing the DFRR collection, we any amount, we would issue a letter to
physician self-referral law and reviewed the bed size of Medicare- any hospital that does not return the
implementing regulations. Using our participating hospitals and developed completed DFRR, inquiring as to why
authority under section 1877(f) of the three categories of hospitals (small, the hospital did not return timely the
Act and 42 CFR 411.361, we are medium, and large hospitals). We completed DFRR. In addition, a hospital
proposing to send the DFRR to 500 randomly selected 20 hospitals from may, upon a demonstration of good
hospitals, a number that we believe is each category and requested that these cause, receive an extension of time to
necessary to provide us with sufficient 60 hospitals estimate the aggregate submit the requested information.
information: (1) To determine number of hours it would take them to
compliance; and (2) to assist us in any complete and submit the entire DFRR E. Uses of Information Captured by the
future rulemaking concerning the collection. The 33 hospitals that DFRR
reporting requirements and other responded included 11 small, 11 As noted above, we anticipate that the
physician self-referral provisions. medium, and 11 large hospitals. We DFRR will be useful in determining
We intend for our sample size to be reviewed the responses from the 33 whether the financial relationships
a significant percentage of the total hospitals and determined that the between 500 hospitals and the
number of Medicare-participating average number of hours to complete physicians associated with those
hospitals. The 2007 CMS Statistics the DFRR was 31 hours. This figure hospitals are in compliance with the
Handbook determined that, as of represents a significant increase from physician self-referral statute and
December 2006, there were our most recent time and burden regulations. In addition, the results of
approximately 6,200 Medicare- estimate. Therefore, we believe it would the DFRR may assist us in other
participating hospitals. Our goal is to be beneficial to seek further comments rulemaking efforts.
begin by sending the DFRR to 8 to 10 on the accuracy of the time and burden In the CY 2008 PFS proposed rule, we
percent of the Medicare-participating estimates associated with this proposed certain changes to our
hospitals (496 to 620 hospitals). We information collection instrument. physician self-referral rules (72 FR
reviewed our available funding and Because the information that we seek is 38179 through 38187). With the
jlentini on PROD1PC65 with PROPOSALS2
determined that our resources would that which hospitals should already be exception of the anti-markup
permit us to review data from 500 keeping in the normal course of their provisions, however, we have not yet
hospitals (both general acute care business activities (even apart from the finalized any of the proposals. We are
hospitals and specialty hospitals). need to document compliance with the actively working on the proposals, and
As discussed further below, the DFRR physician self-referral law), we although we expect to finalize the
also may assist us in making an anticipate that the majority of the time proposals before receiving and
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23698 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
analyzing the completed DFRRs, Response: Redirecting funds obtained data are available in computer tape or
information gleaned from the completed by reducing the IME adjustment to fund cartridge format. However, some files
DFRRs may shape our final rulemaking a quality incentive payment program is are available on diskette as well as on
if that rulemaking is delayed. Our consistent with the VBP initiatives to the Internet at: http://www.cms.hhs.gov/
analysis of the DFRRs may affect improve the quality of care and, providers/hipps. Data files and the cost
subsequent proposals on these and other therefore, merits consideration. for each file, if applicable, are listed
related issues. However, section 502(a) of Pub. L. 108– below. Anyone wishing to purchase
173 modified the formula multiplier (c) data tapes, cartridges, or diskettes
F. Solicitation of Comments
to be used in the calculation of the IME should submit a written request along
We are soliciting comments on the adjustment beginning midway through with a company check or money order
DFRR information collection instrument FY 2004 and provided for a new (payable to CMS-PUF) to cover the cost
through this proposed rule as follows: schedule of formula multipliers for FYs to the following address: Centers for
• Whether the collection effort should 2005 and thereafter. Consequently, CMS Medicare & Medicaid Services, Public
be recurring, and, if so, whether it could not implement MedPAC’s Use Files, Accounting Division, P.O.
should be implemented on an annual or recommendation to reduce the IME Box 7520, Baltimore, MD 21207–0520,
some other periodic basis. adjustment in 2009 without a statutory (410)–786–3691. Files on the Internet
• Whether we are collecting too much change. We note that included in the may be downloaded without charge.
or not enough information, and whether President’s FY 2009 budget proposal
we are collecting the correct (or 1. CMS Wage Data
was a proposal to reduce the IME
incorrect) type of information. adjustment from 5.5 percent to 2.2 This file contains the hospital hours
• The amount of time it will take percent over 3 years, starting in FY and salaries for FY 2005 used to create
hospitals to complete the DFRR and the 2009, in order to better align IME the proposed FY 2009 prospective
costs associated with completing the payments with the estimated costs per payment system wage index. The file is
DFRR; the amount of time we should case that teaching hospitals may face. currently available for the NPRM and
give hospitals to complete and return In its June 2007 ‘‘Report to Congress: will be available by the beginning of
their responses to us. Promoting Greater Efficiency in May for the final rule.
• Whether we should direct the Medicare,’’ MedPAC made
collection instrument to all hospitals, recommendations concerning the Wage data PPS fiscal
and, if so, whether we should stagger Processing year
Medicare hospital wage index. Section year year
the collection so that only a certain 106(b)(1) of the MIEA–TRHCA (Pub. L.
number of hospitals are subject to it in 2008 .................. 2005 2009
109–432) required MedPAC to submit to 2007 .................. 2004 2008
any given year. Congress, not later than June 30, 2007,
• Whether hospitals, once having 2006 .................. 2003 2007
a report on the Medicare hospital wage 2005 .................. 2002 2006
completed the DFRR, should have to
index classification system applied 2004 .................. 2001 2005
send in yearly updates and report only
under the Medicare IPPS, including any 2003 .................. 2000 2004
changed information. 2002 .................. 1999 2003
alternatives that MedPAC recommended
X. MedPAC Recommendations to the method to compute the wage 2001 .................. 1998 2002
index under section 1886(d)(3)(E) of the 2000 .................. 1997 2001
We are required by section 1999 .................. 1996 2000
1886(e)(4)(B) of the Act to respond to Act. In addition, section 106(b)(2) of the
1998 .................. 1995 1999
MedPAC’s recommendations regarding MIEA–TRHCA instructed the Secretary 1997 .................. 1994 1998
hospital inpatient payments in our taking into account MedPAC’s 1996 .................. 1993 1997
annual proposed and final IPPS rules. recommendations on the Medicare 1995 .................. 1992 1996
We have reviewed MedPAC’s March hospital wage index classification 1994 .................. 1991 1995
2008 ‘‘Report to the Congress: Medicare system, to include in this FY 2009 IPPS 1993 .................. 1990 1994
proposed rule one or more proposals to 1992 .................. 1989 1993
Payment Policy’’ and have given it 1991 .................. 1988 1992
careful consideration in conjunction revise the wage index adjustment
with the proposed policies set forth in applied under section 1886(d)(3)(E) of
the Act for purposes of the IPPS. The These files support the following:
this document. MedPAC’s
MedPAC recommendations and our • Notice of proposed rulemaking
Recommendation 2A–1 states that ‘‘The
proposals concerning the Medicare published in the Federal Register.
Congress should increase payment rates
for the acute inpatient and outpatient hospital wage index are discussed in • Final rule published in the Federal
prospective payment systems in 2009 by section III.B. of the preamble of this Register.
the projected rate of increase in the proposed rule. Media: Diskette/most recent year on
hospital market basket index, For further information relating the Internet.
concurrent with implementation of a specifically to the MedPAC reports or to File Cost: $165.00 per year.
quality incentive payment program.’’ obtain a copy of the reports, contact Periods Available: FY 2009 PPS
This recommendation is discussed in MedPAC at (202) 653–7220, or visit Update.
Appendix B to this proposed rule. MedPAC’s Web site at: http://
www.medpac.gov. 2. CMS Hospital Wages Indices
Recommendation 2A–2: MedPAC (Formerly: Urban and Rural Wage Index
recommended that ‘‘The Congress XI. Other Required Information Values Only)
should reduce the indirect medical
education adjustment in 2009 by 1 A. Requests for Data From the Public This file contains a history of all wage
jlentini on PROD1PC65 with PROPOSALS2
percentage point to 4.5 percent per 10 In order to respond promptly to indices since October 1, 1983.
percent increment in the resident-to-bed public requests for data related to the Media: Diskette/most recent year on
ratio. The funds obtained by reducing prospective payment system, we have the Internet.
the indirect medical education established a process under which File Cost: $165.00 per year.
adjustment should be used to fund a commenters can gain access to raw data Periods Available: FY 2009 PPS
quality incentive payment program.’’ on an expedited basis. Generally, the Update.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23699
3. FY 2009 Proposed Rule Occupational a Medicare participating hospital by the report (as submitted, final settled, or
Mix Adjusted and Unadjusted AHW by Medicare fiscal intermediary to CMS. reopened) submitted for a Medicare-
Provider This data set is updated at the end of certified hospital by the Medicare fiscal
This file includes each hospital’s each calendar quarter and is available intermediary to CMS. The data set is
adjusted and unadjusted average hourly on the last day of the following month. updated at the end of each calendar
wage. Media: Tape/Cartridge. quarter and is available on the last day
Media: Internet. File Cost: $770.00 per year. of the following month.
Periods Available: FY 2009 PPS Media: Diskette/Internet.
Periods
Update. beginning and before File Cost: $2,500.00.
4. FY 2009 Proposed Rule Occupational on or after
Periods
Mix Adjusted and Unadjusted AHW and PPS–IV ............. 10/01/86 10/01/87 beginning and before
Pre-Reclassified Wage Index by CBSA PPS–V .............. 10/01/87 10/01/88 on or after
This file includes each CBSA’s PPS–VI ............. 10/01/88 10/01/89
PPS–XIII ........... 10/01/95 10/01/96
adjusted and unadjusted average hourly PPS–VII ............ 10/01/89 10/01/90
PPS–XIV ........... 10/01/96 10/01/97
wage. PPS–VIII ........... 10/01/90 10/01/91
PPS–XV ............ 10/01/97 10/01/98
PPS–IX ............. 10/01/91 10/01/92
Media: Internet. PPS–XVI ........... 10/01/98 10/01/99
PPS–X .............. 10/01/92 10/01/93
Periods Available: FY 2009 PPS PPS–XI ............. 10/01/93 10/01/94
PPS–XVII .......... 10/01/99 10/01/00
Update. PPS–XII ............ 10/01/94 10/01/95
PPS–XVIII ......... 10/01/00 10/01/01
PPS–XIX ........... 10/01/01 10/01/02
5. Provider Occupational Mix (NOTE: The PPS–XIII, PPS–XIV, PPS–XV, PPS–XX ............ 10/01/02 10/01/03
Adjustment Factors for Each PPS–XVI, PPS–XVII, PPS–XVIII, PPS–XIX PPS–XXI ........... 10/01/03 10/01/04
Occupational Category PPS–XX, PPS–XXI, PPS–XXII, and PPS– PPS–XXII .......... 10/01/04 10/01/05
XXIII Minimum Data Sets are part of the PPS– PPS–XXIII ......... 10/01/05 10/01/06
This file contains each hospital’s XIII, PPS–XIV, PPS–XV, PPS–XVI, PPS–XVII,
occupational mix adjustment factors by PPS–XVIII, PPS–XIX, PPS–XX, PPS–XXI,
occupational category. PPS–XXII, and PPS–XXIII Hospital Data Set 11. Provider-Specific File
Files (refer to item 10 below).)
Media: Internet. This file is a component of the
Periods Available: FY 2009 PPS 9. PPS–IX to PPS–XII Capital Data Set PRICER program used in the fiscal
Update. intermediary’s or the MAC’s system to
The Capital Data Set contains selected
6. PPS SSA/FIPS MSA State and County data for capital-related costs, interest compute DRG payments for individual
Crosswalk expense and related information and bills. The file contains records for all
complete balance sheet data from the prospective payment system eligible
This file contains a crosswalk of State hospitals, including hospitals in waiver
and county codes used by the Social Medicare hospital cost report. The data
set includes only the most current cost States, and data elements used in the
Security Administration (SSA) and the prospective payment system
Federal Information Processing report (as submitted, final settled or
reopened) submitted for a Medicare recalibration processes and related
Standards (FIPS), county name, and a activities. Beginning with December
historical list of Metropolitan Statistical certified hospital by the Medicare fiscal
intermediary to CMS. This data set is 1988, the individual records were
Areas (MSAs). enlarged to include pass-through per
Media: Diskette/Internet. updated at the end of each calendar
quarter and is available on the last day diems and other elements.
File Cost: $165.00 per year.
Periods Available: FY 2009 PPS of the following month. Media: Diskette/Internet.
Update. Media: Tape/Cartridge. File Cost: $265.00.
File Cost: $770.00 per year. Periods Available: FY 2009 PPS
7. Reclassified Hospitals New Wage Update.
Index (Formerly: Reclassified Hospitals Periods
by Provider Only) beginning and before 12. CMS Medicare Case-Mix Index File
on or after
This file contains a list of hospitals This file contains the Medicare case-
that were reclassified for the purpose of PPS–IX ............. 10/01/91 10/01/92 mix index by provider number as
assigning a new wage index. Two PPS–X .............. 10/01/92 10/01/93 published in each year’s update of the
versions of these files are created each PPS–XI ............. 10/01/93 10/01/94 Medicare hospital inpatient prospective
year. They support the following: PPS–XII ............ 10/01/94 10/01/95 payment system. The case-mix index is
• Notice of proposed rulemaking a measure of the costliness of cases
published in the Federal Register. (Note: The PPS–XIII, PPS–XIV, PPS– treated by a hospital relative to the cost
• Final rule published in the Federal XV, PPS–XVI, PPS–XVII, PPS–XVIII, of the national average of all Medicare
Register. PPS–XIX PPS–XX, PPS–XXI, PPS–XXII, hospital cases, using DRG weights as a
Media: Diskette/Internet. and PPS–XXIII Capital Data Sets are part measure of relative costliness of cases.
File Cost: $165.00 per year. of the PPS–XIII, PPS–XIV, PPS–XV, Two versions of this file are created
Periods Available: FY 2009 PPS PPS–XVI, PPS–XVII, PPS–XVIII, PPS– each year. They support the following:
Update. XIX, PPS–XX, PPS–XXI, PPS–XXII, and • Notice of proposed rulemaking
PPS–XXIII Hospital Data Set Files (refer published in the Federal Register.
8. PPS–IV to PPS–XII Minimum Data to item 10 below).)
Set • Final rule published in the Federal
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23700 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
13. MS–DRG Relative Weights index, cost-of-living adjustment (COLA), may be made under Medicare must
(Formerly Table 5 DRG) case-mix index, disproportionate share, submit information to CMS or to the
This file contains a listing of MS– and the Metropolitan Statistical Area Office of the Inspector General (OIG)
DRGs, MS–DRG narrative descriptions, (MSA). The file supports the following: concerning their reportable financial
relative weights, and geometric and • Notice of proposed rulemaking relationships (any ownership or
arithmetic mean lengths of stay as published in the Federal Register. investment interest, or compensation
published in the Federal Register. The • Final rule published in the Federal arrangement) in the form, manner, and
hard copy image has been copied to Register. at times that CMS or OIG specifies. As
diskette. There are two versions of this Media: Internet. described in section IX. of the preamble
file as published in the Federal File Cost: No charge. of this proposed rule, and in accordance
Periods Available: FY 2009 PPS with its authority under 42 CFR
Register:
• Notice of proposed rulemaking. Update. 411.361(e), CMS is requiring that
• Final rule. For further information concerning hospitals provide information
Media: Diskette/Internet. these data tapes, contact the CMS Public concerning their ownership, investment
File Cost: $165.00. Use Files Hotline at (410) 786–3691. and compensation arrangements with
Periods Available: FY 2009 PPS Commenters interested in discussing physicians by completing the DFRR
Update. any data used in constructing this instrument.
proposed rule should contact Nisha An information collection request
14. PPS Payment Impact File Bhat at (410) 786–5320. concerning the DFRR was previously
This file contains data used to submitted to OMB for approval. We
B. Collection of Information announced and sought public comment
estimate payments under Medicare’s
Requirements on the information collection request in
hospital inpatient prospective payment
systems for operating and capital-related 1. Legislative Requirement for both 60-day and 30-day Federal
costs. The data are taken from various Solicitation of Comments Register notices that published on May
sources, including the Provider-Specific 18, 2007 (72 FR 28056), and September
Under the Paperwork Reduction Act 14, 2007 (72 FR 52568), respectively. As
File, Minimum Data Sets, and prior
of 1995, we are required to provide 60- further discussed in section IX. of this
impact files. The data set is abstracted
day notice in the Federal Register and preamble, we have decided to obtain
from an internal file used for the impact
solicit public comment before a additional input from the public
analysis of the changes to the
collection of information requirement is concerning the time and cost burden
prospective payment systems published
submitted to the Office of Management associated with completing and
in the Federal Register. This file is
and Budget (OMB) for review and submitting the DFRR instrument. (The
available for release 1 month after the
approval. In order to fairly evaluate instrument is included as Appendix C
proposed and final rules are published
whether an information collection to this proposed rule.) We believe that
in the Federal Register.
should be approved by OMB, section hospital accounting personnel would be
Media: Diskette/Internet.
3506(c)(2)(A) of the Paperwork responsible for: (1) Ensuring that the
File Cost: $165.00.
Periods Available: FY 2009 PPS Reduction Act of 1995 requires that we appropriate data or supporting
Update. solicit comment on the following issues: documentation is retrieved; (2)
• The need for the information completing the DFRR; and (3)
15. AOR/BOR Tables collection and its usefulness in carrying submitting the DFRR to the Chief
This file contains data used to out the proper functions of our agency. Executive Officer, Chief Financial
develop the MS–DRG relative weights. It • The accuracy of our estimate of the Officer, or comparable officer of the
contains mean, maximum, minimum, information collection burden. hospital for his or her signature on the
standard deviation, and coefficient of • The quality, utility, and clarity of certification statement.
variation statistics by MS–DRG for the information to be collected. Initially, CMS would require 500
length of stay and standardized charges. • Recommendations to minimize the hospitals to complete and submit the
The BOR tables are ‘‘Before Outliers information collection burden on the DFRR instrument. We estimate that
Removed’’ and the AOR is ‘‘After affected public, including automated these tasks would require 31 hours for
Outliers Removed.’’ (Outliers refer to collection techniques. each of the 500 hospitals to complete
statistical outliers, not payment the DFRR. Thus, the total number of
2. Solicitation of Comments on
outliers.) burden hours required for 500 hospitals
Proposed Requirements in Regulatory
Two versions of this file are created to complete the DFRR instrument is
Text
each year. They support the following: 15,500 hours.
• Notice of proposed rulemaking We are soliciting public comment on
each of the issues listed under section b. ICRs Regarding Risk Adjustment Data
published in the Federal Register. (§ 422.310)
• Final rule published in the Federal XI.B.1. of this preamble for the
Register. following sections of this document that As discussed in section IV.H. of the
Media: Diskette/Internet. contain information collection preamble of this proposed rule,
File Cost: $165.00. requirements (ICRs): § 422.310(b) states that each MA
Periods Available: FY 2009 PPS organization must submit to CMS (in
a. ICRs Regarding Physician Reporting accordance with CMS instructions) the
Update. Requirements (§ 411.361) data necessary to characterize the
16. Prospective Payment System (PPS) Section 411.361(a) of the regulations context and purposes of each item and
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Standardizing File states that except for entities that service provided to a Medicare enrollee
This file contains information that furnish 20 or fewer Part A and Part B by a provider, supplier, physician, or
standardizes the charges used to services during a calendar year or for other practitioner. In addition,
calculate relative weights to determine Medicare covered services furnished § 422.310(b) states that CMS may collect
payments under the prospective outside the United States, all entities data necessary to characterize the
payment system. Variables include wage furnishing services for which payment functional limitations of enrollees of
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23701
each MA organization. Section immediately disseminate the list to the patients. In addition, we estimate 30
422.310(c) lists the nature of the data requesting patient. seconds to provide the disclosure to
elements to be submitted to CMS. The burden associated with the each patient and an additional 30
The burden associated with these requirements in this section is the time seconds to record the proof of disclosure
requirements is the time and effort and effort necessary for a hospital to into each patient’s medical record.
necessary for the MA organization to furnish written notice to all patients that Although we can estimate the number
submit the necessary data to CMS. the hospital is a physician-owned of physician-owned hospitals, we are
These requirements are subject to the hospital. Whereas this requirement is unable to quantify the number of
PRA and the associated burden is subject to the PRA, the associated physicians that possess an ownership or
currently approved under OMB control burden is currently approved under investment interest in hospitals. There
number 0938–0878. However, under OMB control number 0938–1034, with is limited data available concerning
notice and comment periods separate an expiration date of February 28, 2011. physician ownership in hospitals. The
from this proposed rule, we intend to In addition, there is burden associated studies to date, including those by CMS
revise the currently approved with furnishing a patient with the list of and the Government Accountability
information collection to include the hospital’s owners or investors who Office, pertain to physician ownership
burden estimates as they pertain to are physicians (or immediate family in specialty hospitals (cardiac,
§ 422.310. The preliminary burden members of physicians) at the time of orthopedic, and surgical hospitals).
estimate for this proposed rule is as the patient request. However, CMS has These specialty hospital studies
follows: Currently, there are 676 MA no way to accurately quantify the published data concerning the average
organizations. Assuming that 99 percent burden because we cannot estimate the percentage of shares of direct ownership
of encounter data claims are submitted number of this type of request that a by physicians (less than 2 percent),
electronically and 1 percent are hospital may receive. We are soliciting indirect ownership through group
submitted manually, we estimate that it public comments on the annual number practices, and the aggregate percentage
will take 1,089 hours annually for of requests a hospital may receive for of physician ownership, but did not
submission of electronic claims and lists of physician-owners and investors, publish the number of physician owners
73,335 hours annually for submission of and will reevaluate this issue in the in these types of hospitals. More
manual claims. The estimated annual final rule stage of rulemaking. importantly, proposed § 489.20(u)(2)
burden associated with these Proposed § 489.20(u)(2) would require would apply to physician ownership in
requirements is an annual average of disclosure of physician ownership as a any type of hospital. Our other research
110 hours per MA organization. condition of continued medical staff involved a review of enrollment data.
membership or admitting privileges. However, the CMS enrollment
c. ICRs Regarding Basic Commitments of The burden associated with this application (CMS–855) requires the
Providers (§ 489.20) requirement is the time and effort reporting of ownership interests that
As discussed in section IV.I. of the required for a hospital to develop, draft, exceed 5 percent or greater, and, thus,
preamble of this proposed rule, and implement changes to its medical most physician ownership is not
proposed § 489.20(r)(2) states that a staff bylaws and other policies captured. In summary, because we are
hospital, as defined in § 489.24(b), must governing admitting privileges. unable to estimate the total physician
maintain an on-call list of physicians on Approximately 175 physician-owned burden associated with this reporting
its medical staff to provide treatment hospitals would be required to comply requirement, we are seeking public
necessary to stabilize patients who are with this requirement. We estimate that comment pertaining to this burden and
receiving services required under it will require a hospital’s general will reevaluate this issue in the final
§ 489.24 in accordance with the counsel 4 hours to revise a hospital’s rule stage of rulemaking.
resources available to the hospital. The medical staff bylaws and policies Proposed § 489.20(v) states that the
burden associated with this requirement governing admitting privileges. aforementioned requirements in
is the time and effort necessary to draft, Therefore, the total annual hospital § 489.20(u)(1) and (u)(2) do not apply to
maintain, and periodically update the burden would be 700 hours. a physician-owned hospital that does
list of on-call physicians. We estimate In addition, the proposed not have at least one referring physician
that it will take 3 hours for each of the § 489.20(u)(2) imposes a burden on who has an ownership or investment
100 Medicare-participating hospitals to physicians. As stated earlier, all interest in the hospital or who has an
comply with this recordkeeping physicians who are also members of the immediate family member who has an
requirement. The estimated annual hospital’s medical staff must agree, as a ownership or investment interest in the
burden associated with this requirement condition of continued medical staff hospital. To comply with this exception,
is 300 hours. membership or admitting privileges, to an eligible hospital must sign an
As discussed in section VII. of the disclose, in writing, to all patients they attestation to that effect and maintain
preamble of this proposed rule, refer to the hospital any ownership or the document in its records. Therefore,
proposed § 489.20(u)(1) states that, in investment interest in the hospital held the number of hospitals that are now
the case of a physician-owned hospital by themselves or by an immediate subject to the disclosure requirement
as defined in § 489.3, the hospital must family member. The disclosure must be would be slightly reduced. However,
furnish written notice to all patients at made at the time the referral is made. there may be a minimal burden
the beginning of their hospital stay or The burden associated with this attributable to the proposed requirement
outpatient visit that the hospital is a requirement is the time and effort that the hospital maintain an attestation
physician-owned facility. In addition, necessary for a physician to draft a statement in its records.
patients must be advised that a list of disclosure and to provide it to the The burden associated with this
jlentini on PROD1PC65 with PROPOSALS2
the hospital’s owners or investors who patient at the time the referral is made requirement will be limited to those
are physicians (or immediate family to the physician-owned hospital. We physician-owned hospitals that do not
members of physicians) is available estimate that it will take each physician, have at least one referring physician
upon request. Upon receiving the or designated office staff member, 1 who has an ownership or investment
request of the patient or an individual hour to develop a disclosure notice and interest in the hospital or who has an
on behalf of the patient, a hospital must make copies that will be distributed to immediate family member who has an
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23702 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
ownership or investment interest in the physician-owned hospitals that do not in the hospital 24 hours per day, 7 days
hospital. The burden would include the have at least one referring physician per week. The notice must indicate how
time and effort for these hospitals to who has an ownership or investment the hospital will meet the medical needs
develop, sign, and maintain the interest in the hospital or who has an of any inpatient who develops an
attestations in their records. We immediate family member who has an emergency medical condition, as
estimate that 10 percent, or ownership or investment interest in the defined in § 489.24(b), at a time when
approximately 18, of the estimated 175 hospital, we are requesting public there is no physician present in the
physician-owned hospitals would be comment regarding the accuracy of our hospital. The burden associated with
subject to this requirement. We estimate estimate and the associated burden with this requirement is the time and effort
that it would take each of these the attestation requirement. necessary for each hospital to develop a
physician-owned hospitals an average of Section 489.20(w) requires all
standard notice to furnish to its patients.
1 hour to develop, sign, and maintain hospitals, as defined in § 489.24(b), to
Whereas this requirement is subject to
the attestation in its records. The furnish all patients notice, in
the PRA, the associated burden is
estimated annual burden associated accordance with § 482.13(b)(2), at the
with this requirement is 18 hours. beginning of their hospital stay or approved under OMB control number
However, because we have no way of outpatient visit if a doctor of medicine 0938–1034 with a current expiration
knowing for certain the number of or a doctor of osteopathy is not present date of February 28, 2011.
3. Associated Information Collections necessary to place the appropriate POA stated in that final rule, we believe the
Not Specified in Regulatory Text codes on Medicare claims. While the associated burden is exempt from the
This proposed rule imposes collection requirement is subject to the PRA; the PRA as stipulated under 5 CFR
of information requirements as outlined associated burden is approved under 1320.3(h)(6). Collection of the
in the regulation text and specified 0938–0997 with an expiration date of information for this requirement will be
above. However, this proposed rule also August 31, 2009. conducted on an individual case-by-
makes reference to several associated case basis.
b. Proposed Add-On Payments for New
information collections that are not Services and Technologies c. Reporting of Hospital Quality Data for
discussed in the regulation text. The Annual Hospital Payment Update
following is a discussion of these Section II.J. of the preamble of this
collections, which have already proposed rule discusses proposed add- As noted in section IV.B. of the
received OMB approval. on payments for new services and preamble of this proposed rule, the
technologies. Specifically, this section RHQDAPU program was originally
a. Present on Admission (POA) states that applicants for add-on established to implement section 501(b)
Indicator Reporting payments for new medical services or of Pub. L. 108–173, thereby expanding
Section II.F.8 of the preamble of this technologies for FY 2010 must submit a our voluntary Hospital Quality
proposed rule discusses the present on formal request. A formal request Initiative. The RHQDAPU program
admission indicator (POA) reporting includes a full description of the originally consisted of a ‘‘starter set’’ of
requirements. As stated earlier, POA clinical applications of the medical 10 quality measures. OMB approved the
indicator information is necessary to service or technology and the results of collection of data associated with the
identify which conditions were any clinical evaluations demonstrating original starter set of quality measures
acquired during hospitalization for the that the new medical service or under OMB control number 0938–0918,
hospital-acquired condition (HAC) technology represents a substantial with a current expiration date of January
payment provision and for broader clinical improvement. In addition, the 31, 2010.
public health uses of Medicare data. request must contain a significant We added additional quality measures
Through Change Request No. 5499 sample of the data to demonstrate that to the RHQDAPU program and
jlentini on PROD1PC65 with PROPOSALS2
(released May 11, 2007), CMS issued the medical service or technology meets submitted the information collection
instructions requiring IPPS hospitals to the high-cost threshold. request to OMB for approval. This
submit the POA indicator data for all We detailed the burden associated expansion of the RHQDAPU measures
diagnosis codes on Medicare claims. with this requirement in a final rule was part of our implementation of
The burden associated with this published in the Federal Register on section 5001(a) of the DRA. Section
requirement is the time and effort September 7, 2001 (66 FR 46902). As 1886(b)(3)(B)(viii)(III) of the Act, added
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23703
by section 5001(a) of the DRA, requires While this is a reporting requirement, Federal Register documents, we are not
that the Secretary expand the ‘‘starter the burden associated with it is not able to acknowledge or respond to them
set’’ of 10 quality measures that were subject to the PRA under 5 CFR individually. We will consider all
established by the Secretary as of 1320.4(a)(2). The burden associated comments we receive by the date and
November 1, 2003, to include measures with information collection time specified in the DATES section of
‘‘that the Secretary determines to be requirements imposed subsequent to an this preamble, and, when we proceed
appropriate for the measurement of the administrative action is not subject to with a subsequent document, we will
quality of care furnished by hospitals in the PRA. respond to the comments in the
inpatient settings.’’ The burden preamble to that document.
associated with these reporting d. Occupational Mix Adjustment to the
requirements is currently approved FY 2009 Index (Hospital Wage Index List of Subjects
under OMB control number 0938–1022 Occupational Mix Survey)
42 CFR Part 411
with a current expiration date of Section III. of the preamble of this
Kidney diseases, Medicare, Physician
December 31, 2008. proposed rule details the proposed
However, for FY 2009, we submitted referral, Reporting and recordkeeping
changes to the hospital wage index.
to OMB for approval a revised requirements.
Specifically, section III.D. addresses the
information collection request using the proposed occupational mix adjustment 42 CFR Part 412
same OMB control number (0938–1022). to the proposed FY 2009 index. While Administrative practice and
In the revised request, we proposed to the preamble does not contain any new procedure, Health facilities, Medicare,
add three new RHQDAPU quality information collection requirements, it Puerto Rico, Reporting and
measures that we adopted for the FY is important to note that there is an recordkeeping requirements.
2009 RHADAPU program to the PRA OMB approved collection associated
process. These three measures are as with the hospital wage index. 42 CFR Part 413
follows: Section 304(c) of Pub. L. 106–554 Health facilities, Kidney diseases,
• Pneumonia 30-day Mortality amended section 1886(d)(3)(E) of the Medicare, Puerto Rico, Reporting and
(Medicare patients); Act to require CMS to collect data at recordkeeping requirements.
• SCIP Infection 4: Cardiac Surgery least once every 3 years on the
Patients with Controlled 6AM occupational mix of employees for each 42 CFR Part 422
Postoperative Serum Glucose; and short-term, acute care hospital Administrative practice and
• SCIP Infection 6: Surgery Patients participating in the Medicare program, procedure, Grant programs—health,
with Appropriate Hair Removal. in order to construct an occupational Health care, Health insurance, Health
The revised information collection mix adjustment to the wage index. We maintenance organizations (HMO), Loan
request was announced in the Federal collect the data via the occupational mix programs—health, Medicare, Reporting
Register via an emergency notice on survey. and recordkeeping requirements.
January 28, 2008 (73 FR 4868). The The burden associated with this
information collection request is information collection request is the 42 CFR Part 489
currently under review by OMB. Once time and effort required to collect and Health facilities, Medicare, Reporting
approved, we will submit another submit the data in the Hospital Wage and recordkeeping requirements.
revision of the information collection Index Occupational Mix Survey to CMS. For the reasons stated in the preamble
request to obtain approval for the new While this burden is subject to the PRA, of this proposed rule, the Centers for
measures contained in this proposed it is already approved under OMB Medicare & Medicaid Services is
rule. control number 0938–0907, with an
Section IV.B.5. of the preamble of this proposing to amend 42 CFR Chapter IV
expiration date of February 28, 2011. as follows:
proposed rule also discusses the
requirements for the continuous 4. Addresses for Submittal of Comments
PART 411—EXCLUSIONS FROM
collection of HCAHPS quality data. The on Information Collection Requirements
MEDICARE AND LIMITATIONS ON
HCAHPS survey is designed to produce If you comment on these information MEDICARE PAYMENT
comparable data on the patient’s collection and recordkeeping
perspective on care that allows objective requirements, please do either of the 1. The authority citation for part 411
and meaningful comparisons between following: continues to read as follows:
hospitals on domains that are important 1. Submit your comments Authority: Secs. 1102, 1860D–1 through
to consumers. We also added the electronically as specified in the 1860D–42, 1871, and 1877 of the Social
HCAHPS survey to the PRA process in ADDRESSES section of this proposed rule; Security Act (42 U.S.C. 1302, 1395w–101
the information collection request or through 1395w–152, 1395hh, and 1395nn).
currently approved under OMB control 2. Mail copies to the address specified 2. Section 411.351 is amended by—
number 0938–1022 with a current in the ADDRESSES section of this a. Revising the definition of
expiration date of December 31, 2008. proposed rule and to— Office of ‘‘physician’’.
Section IV.B.9. of the preamble of this Information and Regulatory Affairs, b. Revising the definition of
proposed rule addresses the Office of Management and Budget, ‘‘physician organization’’.
reconsideration and appeal procedures Room 10235, New Executive Office The revisions read as follows:
for a hospital that we believe did not Building, Washington, DC 20503, Attn:
meet the RHQDAPU program Carolyn L. Raffaelli, CMS Desk Officer, § 411.351 Definitions.
requirements. If a hospital disagrees CMS–1390–P; E-mail: * * * * *
jlentini on PROD1PC65 with PROPOSALS2
with our determination, it may submit Carolyn_L._Raffaelli@omb.eop.gov. Fax Physician means a doctor of medicine
a written request to us requesting that (202) 395–6974. or osteopathy, a doctor of dental surgery
we reconsider our decision. The or dental medicine, a doctor of podiatric
hospital’s letter must explain the C. Response to Comments medicine, a doctor of optometry, or a
reasons it believes it did meet the Because of the large number of public chiropractor, as defined in section
RHQDAPU program requirements. comments we normally receive on 1861(r) of the Act. A physician and the
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23704 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
professional corporation of which he or an organization in which it has a 100 ‘‘paragraph (f) of this section’’ and
she is a sole owner are the same for percent ownership interest. adding in its place ‘‘paragraphs (e)(1)
purposes of this subpart. * * * * * (vi) and (f) of this section’’.
* * * * * (c) * * * b. Adding a new paragraph (e)(1)(vi).
Physician organization means a (2) * * * The addition reads as follows:
physician, a physician practice, or a (iv) For purposes of paragraph (c)(2)(i) § 412.22 Excluded hospitals and hospital
group practice that complies with the of this section, a physician is deemed to units: General rules.
requirements of § 411.352. ‘‘stand in the shoes’’ of his or her * * * * *
* * * * * physician organization unless the total (e) * * *
3. Section 411.353 is amended by compensation from the physician (1) * * *
revising paragraph (c) to read as follows: organization to the physician satisfies (vi) Effective October 1, 2008, if a
the requirements of § 411.357(c), (d), or State hospital that is occupying space in
§ 411.353 Prohibition on certain referrals (l).
by physicians and limitations on billing.
the same building or on the same
(3) * * * campus as another State hospital cannot
* * * * * (ii) The provisions of paragraphs meet the criterion under paragraph
(c) Denial of payment. Except as (c)(1)(ii) and (c)(2)(iv) of this section— (e)(1)(i) of this section solely because its
provided in paragraph (e) of this (A) Need not apply during the original governing body is under the control of
section, no Medicare payment may be term or current renewal term of an the State hospital with which it shares
made for a designated health service arrangement that satisfied the a building or a campus, or is under the
that is furnished pursuant to a requirements of § 411.357(p) as of control of a third entity that also
prohibited referral. The period during September 5, 2007 (42 CFR parts 400– controls the State hospital with which it
which referrals are prohibited is the 413, revised as of October 1, 2007); shares a building or a campus, the State
period of disallowance. For purposes of (B) Do not apply to an arrangement hospital can nevertheless qualify for an
this section, with respect to the that satisfies the requirements of exclusion if it meets the other
following types of noncompliance, the § 411.355(e); and applicable criteria in this section and—
period of disallowance begins at the (C) Do not apply with respect to an (A) Both State hospitals occupy space
time the financial relationship fails to arrangement between a physician in the same building or on the same
satisfy the requirements of an applicable organization and a component of an campus and have been continuously
exception and ends no later than— academic medical center listed in owned and operated by the State since
(1) Where the noncompliance is § 411.355(e)(2) for the provision to that October 1, 1995;
unrelated to compensation, the date that academic medical center of only (B) Is required by State law to be
the financial relationship satisfies all of services required to satisfy the academic subject to the governing authority of the
the requirements of an applicable medical center’s obligations under the State hospital with which it shares
exception; Medicare graduate medical education space or the governing authority of a
(2) Where the noncompliance is due (GME) rules in part 413, subpart F of third entity that controls both hospitals;
to the payment of excess compensation, this chapter. and
the date on which the excess * * * * * (C) Was excluded from the inpatient
compensation is returned to the party prospective payment system before
that paid it and the financial PART 412—PROSPECTIVE PAYMENT October 1, 1995, and continues to be
relationship satisfies all of the SYSTEMS FOR INPATIENT HOSPITAL excluded from the inpatient prospective
requirements of an applicable SERVICES payment system through September 30,
exception; or 2008.
(3) Where the noncompliance is due 5. The authority citation for part 412
continues to read as follows: * * * * *
to the payment of compensation that is 8. Section 412.64 is amended by—
of an amount insufficient to satisfy the Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
a. Republishing the introductory text
requirements of an applicable of paragraph (b)(1)(ii) and revising
exception, the date on which the 1395hh), and sec. 124 of Pub. L. 106–113
(113 Stat. 1501A–332). paragraph (b)(1)(ii)(A).
additional required compensation is b. In the introductory text of
paid to the party to which it is owed 6. Section 412.4 is amended by paragraph (h)(4), removing the date
such that the financial relationship revising paragraph (c)(3) to read as ‘‘September 30, 2008’’ and adding in its
would satisfy all of the requirements of follows: place ‘‘September 30, 2011’’.
the exception as of its date of inception. The revision reads as follows:
§ 412.4 Discharges and transfers.
* * * * *
* * * * * § 412.64 Federal rates for inpatient
4. Section 411.354 is amended by—
(c) * * * operating costs for Federal fiscal year 2005
a. Adding a new paragraph (a)(1)(iii).
(3) To home under a written plan of and subsequent fiscal years.
b. Revising paragraph (c)(2)(iv).
care for the provision of home health * * * * *
c. Revising paragraph (c)(3)(ii).
services from a home health agency and (b) * * *
The addition and revisions read as
those services begin— (1) * * *
follows:
(i) Effective for fiscal years prior to FY (ii) The term urban area means—
§ 411.354 Financial relationship, 2009, within 3 days after the date of (A) A Metropolitan Statistical Area or
compensation, and ownership or discharge; and a Metropolitan division (in the case
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investment interest. (ii) Effective FY 2009, within 7 days where a Metropolitan Statistical Area is
(a) * * * after the date of discharge. divided into Metropolitan Divisions), as
(1) * * * * * * * * defined by the Executive Office of
(iii) For purposes of paragraph (c) of 7. Section 412.22 is amended by— Management and Budget; or
this section, an entity that furnishes a. In the introductory text of * * * * *
DHS is deemed to stand in the shoes of paragraph (e), removing the phrase 9. Section 412.87 is amended by—
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23705
a. Revising paragraph (b)(1). § 412.232 Criteria for all hospitals in a rural hospitals in the county seek
b. Adding a new paragraph (c). county seeking urban redesignation. reclassification.
The revision and addition read as * * * * * * * * * *
follows: (c) * * *
(1) Aggregate hourly wage for fiscal PART 413—PRINCIPLES OF
§ 412.87 Additional payment for new REASONABLE COST
medical services and technologies: General years before fiscal year 2010—(i)
provisions. Aggregate hourly wage. With respect to REIMBURSEMENT; PAYMENT FOR
redesignations effective beginning fiscal END-STAGE RENAL DISEASE
* * * * * SERVICES; PROSPECTIVELY
(b) * * * year 1999 and before fiscal year 2010,
the aggregate average hourly wage for all DETERMINED PAYMENT RATES FOR
(1) A new medical service or SKILLED NURSING FACILITIES
technology represents an advance that hospitals in the rural county must be
substantially improves, relating to equal to at least 85 percent of the 13. The authority citation for Part 413
technologies previously available, the average hourly wage in the adjacent continues to read as follows:
diagnosis or treatment of Medicare urban area.
Authority: Secs. 1102, 1812(d), 1814(b),
beneficiaries. (ii) Aggregate hourly wage weighted 1815, 1833(a), (i), and (n), 1861(v), 1871,
for occupational mix. For redesignations 1881, 1883, and 1886 of the Social Security
* * * * *
effective before fiscal year 1999, the Act (42 U.S.C. 1302, 1395d(d), 1395f(b),
(c) Announcement of determinations
aggregate hourly wage for all hospitals 1395g, 1395l(a), (i), and (n), 1395x(v),
and deadline for consideration of new
in the rural county, weighed for 1395hh, 1395rr, 1395tt, and 1395ww); and
medical service or technology sec. 124 of Pub. L. 106–133 (113 Stat. 1501A–
occupational categories, is at least 90
applications. CMS will consider 332).
percent of the average hourly wage in
whether a new medical service or
the adjacent urban area. § 413.79 [Amended]
technology meets the eligibility criteria
specified in paragraph (b) of this section (2) Aggregate hourly wage for fiscal 14. In § 413.79(f)(6)(iv), remove the
and announce the results in the Federal year 2010 and later fiscal years. With cross-reference ‘‘§ 413.75(d)’’ and add
Register as part of its annual updates respect to redesignations effective for the cross-reference ‘‘paragraph (d) of
and changes to the IPPS. CMS will only fiscal year 2010 and later fiscal years, this section’’ in its place.
consider, for add-on payments for a the aggregate average hourly wage for all
particular fiscal year, an application for hospitals in the rural county must be PART 422—MEDICARE ADVANTAGE
which the new medical service or equal to at least 88 percent of the PROGRAM
technology has received FDA approval average hourly wage in the adjacent
urban area. 15. The authority citation for Part 422
or clearance by July 1 prior to the continues to read as follows:
particular fiscal year. * * * * *
12. Section 412.234 is amended by Authority: Secs. 1102 and 1871 of the
10. Section 412.230 is amended by— Social Security Act (42 U.S.C. 1302 and
a. Revising paragraph (d)(1)(iv)(C). revising paragraphs (b)(1) and (b)(2) to 1395hh).
b. Adding a new paragraph read as follows:
(d)(1)(iv)(D). 16. Section 422.310 is revised to read
§ 412.234 Criteria for all hospitals in an as follows:
The addition and revision read as urban county seeking redesignation to
follows: another urban area. § 422.310 Risk adjustment data.
§ 412.230 Criteria for an individual hospital * * * * * (a) Definition of risk adjustment data.
seeking redesignation to another rural area (b) * * * Risk adjustment data are all data that are
or an urban area. (1) Aggregate hourly wage for fiscal used in the development and
* * * * * years before fiscal year 2010—(i) application of a risk adjustment
(d) * * * Aggregate hourly wage. With respect to payment model.
(1) * * * redesignations effective beginning fiscal (b) Data collection: Basic rule. Each
(iv) * * * year 1999 and before fiscal year 2010, MA organization must submit to CMS
(C) With respect to redesignations for the aggregate average hourly wage for all (in accordance with CMS instructions)
fiscal years 2002 through 2009, the hospitals in the urban county must be the data necessary to characterize the
hospital’s average hourly wage is equal at least 85 percent of the average hourly context and purposes of each item and
to, in the case of a hospital located in service provided to a Medicare enrollee
wage in the urban area to which the
a rural area, at least 82 percent, and in by a provider, supplier, physician, or
hospitals in the county seek
the case of a hospital located in an other practitioner. CMS may also collect
reclassification.
urban area, at least 84 percent of the data necessary to characterize the
(ii) Aggregate hourly wage weighted
average hourly wage of hospitals in the functional limitations of enrollees of
for occupational mix. For redesignations
area to which it seeks redesignation. each MA organization.
effective before fiscal year 1999, the (c) Sources and extent of data. (1) To
(D) With respect to redesignations for aggregate hourly wage for all hospitals the extent required by CMS, risk
fiscal year 2010 and later fiscal years, in the county, weighed for occupational adjustment data must account for the
the hospital’s average hourly wage is categories, is at least 90 percent of the following:
equal to, in the case of a hospital located average hourly wage in the adjacent (i) Items and services covered under
in a rural area, at least 86 percent, and urban area. the original Medicare program.
in the case of a hospital located in an (2) Aggregate hourly wage for fiscal (ii) Medicare-covered items and
urban area, at least 88 percent of the year 2010 and later fiscal years. With services for which Medicare is not the
jlentini on PROD1PC65 with PROPOSALS2
average hourly wage of hospitals in the respect to redesignations effective for primary payer.
area to which it seeks redesignation. fiscal year 2010 and later fiscal years, (iii) Other additional or supplemental
* * * * * the aggregate average hourly wage for all benefits that the MA organization may
11. Section 412.232 is amended by hospitals in the urban county must be provide.
revising paragraphs (c)(1) and (c)(2) to at least 88 percent of the average hourly (2) The data must account separately
read as follows: wage in the urban area to which the for each provider, supplier, physician,
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23706 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
or other practitioner that would be March deadline until January 31 of the (1) To furnish written notice to all
permitted to bill separately under the year following the payment year. After patients at the beginning of their
original Medicare program, even if they the payment year is completed, CMS hospital stay or outpatient visit that the
participate jointly in the same service. recalculates the risk factors for affected hospital is a physician-owned hospital,
(d) Other data requirements. (1) MA individuals to determine if adjustments in order to assist the patients in making
organizations must submit data that to payments are necessary. Risk an informed decision regarding their
conform to CMS’ requirements for data adjustment data that are received after care, in accordance with § 482.13(b)(2)
equivalent to Medicare fee-for-service the annual January 31 late data of this subchapter. The notice should
data, when appropriate, and to all submission deadline will not be disclose, in a manner reasonably
relevant national standards. CMS may accepted for the purposes of designed to be understood by all
specify abbreviated formats for data reconciliation. patients, the fact that the hospital meets
submission required of MA the Federal definition of a physician-
organizations. PART 489—PROVIDER AGREEMENTS owned hospital specified in § 489.3 and
(2) The data must be submitted AND SUPPLIER APPROVAL that the list of the hospital’s owners or
electronically to the appropriate CMS 17. The authority citation for part 489 investors who are physicians or
contractor. continues to read as follows: immediate family members of
(3) MA organizations must obtain the physicians (as defined at § 411.351 of
risk adjustment data required by CMS Authority: Secs. 1102, 1819, 1820(e), 1861,
1864(m), 1866, 1869, and 1871 of the Social this chapter) must be provided to the
from the provider, supplier, physician, patients at the time the request for the
Security Act (42 U.S.C. 1302, 1395i–3, 1395x,
or other practitioner that furnished the 1395aa(m), 1395cc, 1395ff, and 1395hh). list is made by or on behalf of the
item or service. patient. For purposes of this paragraph
(4) MA organizations may include in 18. Section 489.3 is amended by
revising the definition of ‘‘physician- (u)(1), the hospital stay or outpatient
their contracts with providers, visit begins with the provision of a
suppliers, physicians, and other owned hospital’’ to read as follows:
package of information regarding
practitioners, provisions that require § 489.3 Definitions. scheduled preadmission testing and
submission of complete and accurate registration for a planned hospital
risk adjustment data as required by * * * * *
Physician-owned hospital means any admission for inpatient care or
CMS. These provisions may include outpatient service.
participating hospital (as defined in
financial penalties for failure to submit (2) To require all physicians who are
§ 489.24) in which a physician, or an
complete data. members of the hospital’s medical staff
immediate family member of a
(e) Validation of risk adjustment data. to agree, as a condition of continued
physician (as defined in § 411.351 of
MA organizations and their providers medical staff membership or admitting
this chapter), has an ownership or
and practitioners will be required to privileges, to disclose, in writing, to all
investment interest. The ownership or
submit a sample of medical records for patients they refer to the hospital any
investment interest may be through
the validation of risk adjustment data, as ownership or investment interest in the
equity, debt, or other means, and
required by CMS. There may be hospital that is held by themselves or by
includes an interest in an entity that
penalties for submission of false data. an immediate family member (as
holds an ownership or investment
(f) Use of data. CMS uses the data
interest in the hospital. This definition defined in § 411.351 of this chapter).
obtained under this section to determine
does not include a hospital with Disclosure must be required at the time
the risk adjustment factors used to
physician ownership or investment the referral is made.
adjust payments, as required under (v) The requirements of paragraph (u)
interests that satisfy the requirements at
§§ 422.304(a) and (c). CMS may also use of this section do not apply to any
§ 411.356(a) or (b) of this chapter.
the data for other purposes, including physician-owned hospital that does not
updating of risk adjustment models. * * * * *
19. Section 489.20 is amended by— have at least one referring physician (as
(g) Deadlines for submission of risk
a. Revising paragraph (r)(2). defined at § 411.351 of this chapter)
adjustment data. Risk adjustment
b. Revising paragraph (u). who has an ownership or investment
factors for each payment year are based c. Redesignating paragraphs (v) and interest in the hospital or who has an
on risk adjustment data submitted for (w) as paragraphs (w) and (x), immediate family member who has an
items and services furnished during the respectively. ownership or investment interest in the
12-month period before the payment d. Adding a new paragraph (v). hospital, provided that such hospital
year that is specified by CMS. As The revisions and addition read as signs an attestation statement to that
determined by CMS, this 12-month follows: effect and maintain such a notice in its
period may include a 6-month data lag
§ 489.20 Basic commitments. records.
that may be changed or eliminated as
appropriate. CMS may adjust these * * * * * * * * * *
deadlines, as appropriate. (r) * * * 20. Section 489.24 is amended by—
(1) The annual deadline for risk (2) An on-call list of physicians on its a. Revising paragraph (a)(2).
medical staff available to provide b. Revising paragraph (f).
adjustment data submission is the first c. Revising paragraph (j).
Friday in September for risk adjustment treatment necessary after the initial
The revisions read as follows:
data reflecting items and services examination to stabilize individuals
furnished during the 12-month period with emergency medical conditions § 489.24 Special responsibilities of
ending the prior June 30, and the first who are receiving services required Medicare hospitals in emergency cases.
Friday in March for data reflecting under § 489.24 in accordance with the (a) * * *
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services furnished during the 12-month resources available to the hospital; and (2) Nonapplicability of provisions of
period ending the prior December 31. * * * * * this section. Sanctions under this
(2) CMS allows a reconciliation (u) Except as provided in paragraph section for an inappropriate transfer
process to account for late data (v) of this section, in the case of a during a national emergency or for the
submissions. CMS continues to accept physician-owned hospital as defined in direction or relocation of an individual
risk adjustment data submitted after the § 489.3— to receive medical screening at an
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23707
alternate location pursuant to an (ii) Permit on-call physicians to have Dated: April 1, 2008.
appropriate State emergency simultaneous on-call duties; and Kerry Weems,
preparedness plan or, in the case of a (iii) Participate in a formal Acting Administrator, Centers for Medicare
public health emergency that involves a community call plan. Notwithstanding & Medicaid Services.
pandemic infectious disease, pursuant participation in a community call plan, Dated: April 10, 2008.
to a State pandemic preparedness plan
hospitals are still required to perform Michael O. Leavitt,
do not apply to a hospital with a
medical screening examinations on Secretary.
dedicated emergency department
located in an emergency area during an individuals who present seeking
[Editorial Note: The following Addendum
emergency period, as specified in treatment and to conduct appropriate and appendixes will not appear in the Code
section 1135(g)(1) of the Act. A waiver transfers. The formal community plan of Federal Regulations.]
of these sanctions is limited to a 72-hour must include the following elements:
Addendum—Proposed Schedule of
period beginning upon the (A) A clear delineation of on-call Standardized Amounts, Update
implementation of a hospital disaster coverage responsibilities; that is, when Factors, and Rate-of-Increase
protocol, except that, if a public health each hospital participating in the plan is Percentages Effective With Cost
emergency involves a pandemic responsible for on-call coverage. Reporting Periods Beginning On or
infectious disease (such as pandemic (B) A description of the specific After October 1, 2008
influenza), the waiver will continue in
geographic area to which the plan I. Summary and Background
effect until the termination of the
applies.
applicable declaration of a public health In this Addendum, we are setting forth the
emergency, as provided for by section (C) A signature by an appropriate methods and data we used to determine the
135(e)(1)(B) of the Act. representative of each hospital proposed prospective payment rates for
participating in the plan. Medicare hospital inpatient operating costs
* * * * * and Medicare hospital inpatient capital-
(f) Recipient hospital responsibilities. (D) Assurances that any local and related costs. We are also setting forth the
A participating hospital that has regional EMS system protocol formally proposed rate-of-increase percentages for
specialized capabilities or facilities includes information on community on- updating the target amounts for certain
(including, but not limited to, facilities call arrangements. hospitals and hospital units excluded from
such as burn units, shock-trauma units, the IPPS. In general, except for SCHs, MDHs,
(E) Evidence of engagement of the and hospitals located in Puerto Rico, each
neonatal intensive case units, or, with
respect to rural areas, regional referral hospitals participating in the hospital’s payment per discharge under the
community call plan in an analysis of IPPS is based on 100 percent of the Federal
centers (which, for purposes of this national rate, also known as the national
subpart, mean hospitals meeting the the specialty on-call needs of the
community for which the plan is adjusted standardized amount. This amount
requirements of referral centers found at reflects the national average hospital cost per
§ 412.96 of this chapter)) may not refuse effective. case from a base year, updated for inflation.
to accept from a referring hospital (F) A statement specifying that even if SCHs are paid based on whichever of the
within the boundaries of the United an individual arrives at a hospital that following rates yields the greatest aggregate
States an appropriate transfer of an is not designated as the on-call hospital, payment: The Federal national rate; the
individual who requires such updated hospital-specific rate based on FY
that hospital still has an obligation 1982 costs per discharge; the updated
specialized capabilities or facilities if under § 489.24 to provide a medical hospital-specific rate based on FY 1987 costs
the receiving hospital has the capacity screening examination and stabilizing per discharge; or the updated hospital-
to treat the individual. This provision treatment within its capability, and that specific rate based on FY 1996 costs per
applies to— hospitals participating in the discharge.
(1) Any participating hospital with community call plan must abide by the Under section 1886(d)(5)(G) of the Act,
specialized capabilities, regardless of MDHs historically have been paid based on
regulations under § 489.24 governing the Federal national rate or, if higher, the
whether the hospital has a dedicated
appropriate transfers. Federal national rate plus 50 percent of the
emergency department; and
(G) An annual assessment of the difference between the Federal national rate
(2) An individual who has been
community call plan by the and the updated hospital-specific rate based
admitted under paragraph (d)(2)(i) of on FY 1982 or FY 1987 costs per discharge,
this section and who has not been participating hospitals. whichever was higher. (MDHs did not have
stabilized. 21. Section 489.53 is amended by the option to use their FY 1996 hospital-
* * * * * revising paragraph (c) to read as follows: specific rate.) However, section 5003(a)(1) of
(j) Availability of on-call physicians. Pub. L. 109–171 extended and modified the
In accordance with the on-call list § 489.53 Termination by CMS. MDH special payment provision that was
previously set to expire on October 1, 2006,
requirements specified in § 489.20(r)(2), * * * * * to include discharges occurring on or after
a hospital must have written policies (c) Termination of agreements with October 1, 2006, but before October 1, 2011.
and procedures in place— physician-owned hospitals. In the case Under section 5003(b) of Pub. L. 109–171, if
(1) To respond to situations in which the change results in an increase to an MDH’s
of a physician-owned hospital, as
a particular specialty is not available or target amount, an MDH must rebase its
defined at § 489.3, CMS may terminate
the on-call physician cannot respond hospital-specific rates to its FY 2002 cost
because of circumstances beyond the the provider agreement if the hospital report. Section 5003(c) of Pub. L. 109–171
physician’s control; and failed to comply with the requirements further required that MDHs be paid based on
(2) To provide that emergency of § 489.20(u) or (w). the Federal national rate or, if higher, the
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23708 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
For hospitals located in Puerto Rico, the hospitals), as provided for under and rural hospitals in the initial development
payment per discharge is based on the sum § 412.211(c), which states that we update the of standardized amounts for the IPPS. The
of 25 percent of an updated Puerto Rico- Puerto Rico-specific standardized amount September 1, 1987 final rule (52 FR 33043
specific rate based on average costs per case using the percentage increase specified in and 33066) contains a detailed explanation of
of Puerto Rico hospitals for the base year and § 412.64(d)(1), or the percentage increase in how the target amounts were determined and
75 percent of the Federal national rate. (We the market basket index for prospective how they are used in computing the Puerto
refer readers to section II.D.3. of this payment hospitals for all areas. Rico rates.
Addendum for a complete description.) • An adjustment to the standardized Sections 1886(d)(2)(B) and (d)(2)(C) of the
As discussed below in section II. of this amount to ensure budget neutrality for DRG Act require us to update base-year per
Addendum, we are proposing to make recalibration and reclassification, as provided discharge costs for FY 1984 and then
changes in the determination of the for under section 1886(d)(4)(C)(iii) of the Act. standardize the cost data in order to remove
prospective payment rates for Medicare • An adjustment to ensure the wage index the effects of certain sources of cost
inpatient operating costs for FY 2009. In update and changes are budget neutral, as variations among hospitals. These effects
section III. of this Addendum, we discuss our provided for under section 1886(d)(3)(E) of include case-mix, differences in area wage
proposed policy changes for determining the the Act. levels, cost-of-living adjustments for Alaska
prospective payment rates for Medicare • An adjustment to ensure the effects of and Hawaii, indirect medical education
inpatient capital-related costs for FY 2009. geographic reclassification are budget costs, and costs to hospitals serving a
Section IV. of this Addendum sets forth our neutral, as provided for in section disproportionate share of low-income
proposed changes for determining the rate-of- 1886(d)(8)(D) of the Act, by removing the FY patients.
increase limits for certain hospitals excluded 2008 budget neutrality factor and applying a In accordance with section 1886(d)(3)(E) of
from the IPPS for FY 2009. The tables to revised factor. the Act, the Secretary estimates, from time-
which we refer in the preamble of this • An adjustment to remove the FY 2008 to-time, the proportion of hospitals’ costs that
proposed rule are presented in section V. of outlier offset and apply an offset for FY 2009. are attributable to wages and wage-related
this Addendum of this proposed rule. • An adjustment to ensure the effects of costs. In general, the standardized amount is
the rural community hospital demonstration divided into labor-related and nonlabor-
II. Proposed Changes to Prospective Payment required under section 410A of Pub. L. 108– related amounts; only the proportion
Rates for Hospital Inpatient Operating Costs 173 are budget neutral, as required under considered to be the labor-related amount is
for FY 2009 section 410A(c)(2) of Pub. L. 108–173. adjusted by the wage index. Section
The basic methodology for determining • An adjustment to eliminate the effect of 1886(d)(3)(E) of the Act requires that 62
prospective payment rates for hospital coding or classification changes that do not percent of the standardized amount be
inpatient operating costs for FY 2005 and reflect real changes in case-mix, as discussed adjusted by the wage index, unless doing so
subsequent fiscal years is set forth at below and in section II.D. of the preamble to would result in lower payments to a hospital
§ 412.64. The basic methodology for this proposed rule. than would otherwise be made. (Section
determining the prospective payment rates We note that, beginning in FY 2008, we 1886(d)(9)(C)(iv)(II) of the Act extends this
for hospital inpatient operating costs for applied the budget neutrality adjustment for provision to the labor-related share for
hospitals located in Puerto Rico for FY 2005 the rural floor to the hospital wage indices hospitals located in Puerto Rico.)
and subsequent fiscal years is set forth at rather than the standardized amount. For FY For FY 2009, we are not proposing to
§§ 412.211 and 412.212. Below we discuss 2009, we are proposing to continue to apply change the national and Puerto Rico-specific
the factors used for determining the the rural floor budget neutrality adjustment labor-related and nonlabor-related shares
prospective payment rates. to hospital wage indices rather than the from the percentages established for FY 2008.
In summary, the proposed standardized standardized amount. In addition, instead of Therefore, the labor-related share continues
amounts set forth in Tables 1A, 1B, and 1C, applying the budget neutrality adjustment for to be 69.7 percent for the national
of section VI. of this Addendum reflect— the imputed rural floor adopted under standardized amounts and 58.7 percent for
• Equalization of the standardized section 1886(d)(3)(E) of the Act to the the Puerto Rico-specific standardized
amounts for urban and other areas at the standardized amounts, beginning with FY amount. Consistent with section
level computed for large urban hospitals 2009, we are proposing to apply the imputed 1886(d)(3)(E) of the Act, we are applying the
during FY 2004 and onward, as provided for rural floor budget neutrality adjustment to wage index to a labor-related share of 62
under section 1886(d)(3)(A)(iv) of the Act, the wage indices. Beginning in FY 2009, we percent for all non-Puerto Rico hospitals
updated by the applicable percentage are also proposing to apply the budget whose wage indexes are less than or equal to
increase required under sections neutrality adjustments for the rural floor and 1.0000. For all non-Puerto Rico hospitals
1886(b)(3)(B)(i)(XX) and 1886(b)(3)(B)(viii) of imputed rural floor at the State level rather whose wage indices are greater than 1.0000,
the Act. than the national level. For a complete we are applying the wage index to a labor-
• The labor-related share that is applied to discussion of the budget neutrality proposals related share of 69.7 percent of the national
the standardized amounts and Puerto Rico- concerning the rural floor and the imputed standardized amount. For hospitals located
rural floor, including the proposal for a in Puerto Rico, we are applying a labor-
specific standardized amounts to give the
within-State budget neutrality adjustment, related share of 58.7 percent if its Puerto
hospital the highest payment, as provided for
we refer readers to section III.B.2.b. of the Rico-specific wage index is less than or equal
under sections 1886(d)(3)(E), and
preamble to this proposed rule. to 1.0000. For hospitals located in Puerto
1886(d)(9)(C)(iv) of the Act.
Rico whose Puerto Rico-specific wage index
• Proposed updates of 3.0 percent for all A. Calculation of the Adjusted Standardized values are greater than 1.0000, we are
areas (that is, the estimated full market basket Amount applying a labor share of 62 percent.
percentage increase of 3.0 percent), as
1. Standardization of Base-Year Costs or The standardized amounts for operating
required by section 1886(b)(3)(B)(i)(XX) of
Target Amounts costs appear in Table 1A, 1B, and 1C of the
the Act, as amended by section 5001(a)(1) of
Addendum to this proposed rule.
Pub. L. 109–171, and reflecting the In general, the national standardized
requirements of section 1886(b)(3)(B)(viii) of amount is based on per discharge averages of 2. Computing the Average Standardized
the Act, as added by section 5001(a)(3) of adjusted hospital costs from a base period Amount
Pub. L. 109–171, to reduce the applicable (section 1886(d)(2)(A) of the Act) or, for Section 1886(d)(3)(A)(iv)(II) of the Act
percentage increase by 2.0 percentage points Puerto Rico, adjusted target amounts from a requires that, beginning with FY–2004 and
for a hospital that fails to submit data, in a base period (section 1886(d)(9)(B)(i) of the thereafter, an equal standardized amount be
jlentini on PROD1PC65 with PROPOSALS2
form and manner specified by the Secretary, Act), updated and otherwise adjusted in computed for all hospitals at the level
relating to the quality of inpatient care accordance with the provisions of section computed for large urban hospitals during FY
furnished by the hospital. 1886(d) of the Act. The September 1, 1983 2003, updated by the applicable percentage
• A proposed update of 3.0 percent to the interim final rule (48 FR 39763) contained a update. Section 1886(d)(9)(A)(ii)(II) of the
Puerto Rico-specific standardized amount detailed explanation of how base-year cost Act equalizes the Puerto Rico-specific urban
(that is, the full estimated rate-of-increase in data (from cost reporting periods ending and rural area rates. Accordingly, we are
the hospital market basket for IPPS during FY 1981) were established for urban calculating FY 2009 national and Puerto Rico
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23709
standardized amounts irrespective of standardized amount based on proposed FY updates or adjustments to the wage index in
whether a hospital is located in an urban or 2009 payment policies. a manner that ensures that aggregate
rural location. We do not remove the prior year’s budget payments to hospitals are not affected by the
3. Updating the Average Standardized neutrality adjustments for reclassification change in the wage index. Consistent with
Amount and recalibration of the DRG weights and for current policy, for FY 2009, we are adjusting
updated wage data because, in accordance 100 percent of the wage index factor for
In accordance with section with sections 1886(d)(4)(C)(iii) and occupational mix. We describe the
1886(d)(3)(A)(iv)(II) of the Act, we are 1886(d)(3)(E) of the Act, estimated aggregate occupational mix adjustment in section III.D.
updating the equalized standardized amount payments after updates in the DRG relative of the preamble to this proposed rule.
for FY 2008 by the full estimated market weights and wage index should equal To comply with the requirement that DRG
basket percentage increase for hospitals in all estimated aggregate payments prior to the reclassification and recalibration of the
areas, as specified in section changes. If we removed the prior year’s relative weights and the updated wage index
1886(b)(3)(B)(i)(XX) of the Act, as amended adjustment, we would not have satisfied be budget neutral, we used FY 2007
by section 5001(a)(1) of Pub. L. 109–171. The these conditions. discharge data to simulate payments and
percentage change in the market basket Budget neutrality is determined by compared aggregate payments using the FY
reflects the average change in the price of comparing aggregate IPPS payments before 2008 relative weights and wage indices to
goods and services purchased by hospitals to and after making changes that are required to aggregate payments using the proposed FY
furnish inpatient care. The most recent be budget neutral (for example, changes to 2009 relative weights and wage indices. The
forecast of the hospital market basket DRG classifications, recalibration of the DRG same methodology was used for the FY 2008
increase for FY 2009 is 3.0 percent. Thus, for relative weights, updates to the wage index, budget neutrality adjustment. Based on this
FY 2009, the proposed update to the average and different geographic reclassifications). comparison, we computed a proposed budget
standardized amount is 3.0 percent for We included outlier payments in the neutrality adjustment factor equal to
hospitals in all areas. The estimated market simulations because they may be affected by 0.999525 to be applied to the national
basket increase of 3.0 percent is based on the changes in these parameters. standardized amount. We are also adjusting
2008 first quarter forecast of the hospital We are also proposing to adjust the the Puerto Rico-specific standardized amount
market basket increase (as discussed in standardized amount this year by an for the effect of DRG reclassification and
Appendix B of this proposed rule). estimated amount to ensure that aggregate recalibration. We computed a proposed
Section 1886(b)(3)(B) of the Act specifies IPPS payments did not exceed the amount of budget neutrality adjustment factor of
the mechanism to be used to update the payments that would have been made in the 0.998700 to be applied to the Puerto Rico-
standardized amount for payment for absence of the rural community hospital specific standardized amount. These
inpatient hospital operating costs. Section demonstration program, as required under proposed budget neutrality adjustment
1886(b)(3)(B)(viii) of the Act, as added by section 410A of Pub. L. 108–173. This factors are applied to the standardized
section 5001(a)(3) of Pub. L. 109–171, demonstration is required to be budget amounts for FY 2008 without removing the
provides for a reduction of 2.0 percentage neutral under section 410A(c)(2) of Pub. L. prior year’s budget neutrality adjustments. In
points from the update percentage increase 108–173. For FY 2009, we are proposing to addition, as discussed in section IV. of this
(also known as the market basket update) for no longer apply budget neutrality for the Addendum, we are applying the same
FY 2007 and each subsequent fiscal year for imputed rural floor to the standardized proposed DRG reclassification and
any ‘‘subsection (d) hospital’’ that does not amount, and to apply it instead to the wage recalibration budget neutrality factor of
submit quality data, as discussed in section index, as discussed in section of II.B.2. of the 0.998700 to the hospital-specific rates that
IV.A. of the preamble of this proposed rule. preamble to this proposed rule. For FY 2009, would be effective for cost reporting periods
The standardized amounts in Tables 1A we are also proposing an adjustment to beginning on or after October 1, 2008.
through 1C of section V. of the Addendum eliminate the effect of coding or classification
to this proposed rule reflect these differential b. Reclassified Hospitals—Budget Neutrality
changes that did not reflect real changes in Adjustment
amounts. case-mix using the Secretary’s authority
Section 412.211(c) states that we update under section 1886(d)(3)(A)(vi) of the Act, by Section 1886(d)(8)(B) of the Act provides
the Puerto Rico-specific standardized amount the percentage specified in section 7 of Pub. that, effective with discharges occurring on
using the percentage increase specified in L. 110–90. or after October 1, 1988, certain rural
§ 412.64(d)(1) or the percentage increase in hospitals are deemed urban. In addition,
the market basket index for prospective a. Proposed Recalibration of DRG Weights section 1886(d)(10) of the Act provides for
payment hospitals for all areas. We are and Updated Wage Index—Budget Neutrality the reclassification of hospitals based on
proposing to apply the full rate-of-increase in Adjustment determinations by the MGCRB. Under section
the hospital market basket for IPPS hospitals Section 1886(d)(4)(C)(iii) of the Act 1886(d)(10) of the Act, a hospital may be
to the Puerto Rico-specific standardized specifies that, beginning in FY 1991, the reclassified for purposes of the wage index.
amount. Therefore, the proposed update to annual DRG reclassification and recalibration Under section 1886(d)(8)(D) of the Act, the
the Puerto Rico-specific standardized amount of the relative weights must be made in a Secretary is required to adjust the
is estimated to be 3.0 percent. manner that ensures that aggregate payments standardized amount to ensure that aggregate
Although the update factors for FY 2009 to hospitals are not affected. As discussed in payments under the IPPS after
are set by law, we are required by section section II. of the preamble of this proposed implementation of the provisions of sections
1886(e)(4) of the Act to recommend, taking rule, we normalized the recalibrated DRG 1886(d)(8)(B) and (C) and 1886(d)(10) of the
into account MedPAC’s recommendations, weights by an adjustment factor so that the Act are equal to the aggregate prospective
appropriate update factors for FY 2009 for average case weight after recalibration is payments that would have been made absent
both IPPS hospitals and hospitals and equal to the average case weight prior to these provisions. We note that the wage
hospital units excluded from the IPPS. Our recalibration. However, equating the average index adjustments provided under section
recommendation on the update factors case weight after recalibration to the average 1886(d)(13) of the Act are not budget neutral.
(which is required by sections 1886(e)(4)(A) case weight before recalibration does not Section 1886(d)(13)(H) of the Act provides
and (e)(5)(A) of the Act) is set forth in necessarily achieve budget neutrality with that any increase in a wage index under
Appendix B of this proposed rule. respect to aggregate payments to hospitals section 1886(d)(13) shall not be taken into
because payments to hospitals are affected by account ‘‘in applying any budget neutrality
4. Other Adjustments to the Average factors other than average case weight. adjustment with respect to such index’’
Standardized Amount Therefore, as we have done in past years, we under section 1886(d)(8)(D) of the Act. To
jlentini on PROD1PC65 with PROPOSALS2
As in the past, we are adjusting the FY made a budget neutrality adjustment to calculate the proposed budget neutrality
2009 standardized amount to remove the ensure that the requirement of section factor for FY 2009, we used FY 2007
effects of the FY 2008 geographic 1886(d)(4)(C)(iii) of the Act is met. discharge data to simulate payments, and
reclassifications and outlier payments before Section 1886(d)(3)(E) of the Act requires us compared total IPPS payments prior to any
applying the FY 2009 updates. We then to update the hospital wage index on an reclassifications under sections 1886(d)(8)(B)
applied budget neutrality offsets for outliers annual basis beginning October 1, 1993. This and (C) and 1886(d)(10) of the Act to total
and geographic reclassifications to the provision also requires us to make any IPPS payments after such reclassifications.
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23710 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
Based on these simulations, we calculated a inadvertent error and applied the (1) Proposed FY 2009 Outlier Fixed-Loss Cost
proposed adjustment factor of 0.992333 to documentation and coding adjustment Threshold
ensure that the effects of these provisions are established using our authority in section For FY 2009, we are proposing to use the
budget neutral, consistent with the statute. 1886(d)(3)(A)(vi) of the Act (which only same methodology used for FY 2008 (72 FR
The proposed adjustment factor is applied applies to the national standardized 47417) to calculate the outlier threshold.
to the standardized amount after removing amounts) to the Puerto Rico-specific Similar to the methodology used in the FY
the effects of the FY 2008 budget neutrality standardized amount. We are currently in the 2008 final rule with comment period, for FY
adjustment factor. We note that the FY 2009 process of developing a Federal Register 2009, we are applying an adjustment factor
adjustment reflects FY 2009 wage index notice to remove the ¥0.6 percent to the CCRs to account for cost and charge
reclassifications approved by the MGCRB or documentation and coding adjustment from inflation (as explained below). As we have
the Administrator. (Section 1886(d)(10)(D)(v) the FY 2008 Puerto Rico-specific done in the past, to calculate the proposed
of the Act makes wage index reclassifications standardized amount retroactive to October FY 2009 outlier threshold, we simulated
effective for 3 years. Therefore, the FY 2009 1, 2007. As discussed in section II.D. of the payments by applying FY 2009 rates and
geographic reclassification could either be preamble of this proposed rule, we are not policies using cases from the FY 2007
the continuation of a 3-year reclassification applying the documentation and coding MedPAR files. Therefore, in order to
that began in FY 2007 or FY 2008, or a new adjustment to the Puerto Rico-specific determine the proposed FY 2009 outlier
one beginning in FY 2009.) standardized amount for FY 2009, but we threshold, we inflate the charges on the
c. Case-Mix Budget Neutrality Adjustment may consider doing so for the FY 2010 Puerto MedPAR claims by 2 years, from FY 2007 to
As stated earlier, beginning in FY 2008, we Rico-specific standardized amount in the FY FY 2009.
adopted the new MS–DRG patient 2010 rulemaking. In calculating the FY 2009 We are proposing to continue using a
classification system for the IPPS to better Puerto Rico-specific standardized amount for refined methodology that takes into account
recognize severity of illness in Medicare this proposed rule, we have removed the the lower inflation in hospital charges that
payment rates. In the FY 2008 IPPS final rule ¥0.6 percent documentation and coding are occurring as a result of the outlier final
with comment period, we indicated that we adjustment that was inadvertently applied to rule (68 FR 34494), which changed our
believe the adoption of the MS–DRGs had the the FY 2008 Puerto Rico-specific methodology for determining outlier
potential to lead to increases in aggregate standardized amount. payments by implementing the use of more
payments without a corresponding increase d. Outliers current CCRs. Our refined methodology uses
in actual patient severity of illness due to the more recent data that reflect the rate-of-
Section 1886(d)(5)(A) of the Act provides change in hospital charges under the new
incentives for improved documentation and
for payments in addition to the basic outlier policy.
coding. In that final rule, using the
prospective payments for ‘‘outlier’’ cases Using the most recent data available, we
Secretary’s authority under section
involving extraordinarily high costs. To calculated the 1-year average annualized rate-
1886(d)(3)(A)(vi) of the Act to maintain
qualify for outlier payments, a case must of-change in charges-per-case from the last
budget neutrality by adjusting the national
have costs greater than the sum of the quarter of FY 2006 in combination with the
standardized amounts to eliminate the effect
prospective payment rate for the DRG, any first quarter of FY 2007 (July 1, 2006 through
of changes in coding or classification that do
not reflect real change in case-mix, we IME and DSH payments, any new technology December 31, 2006) to the last quarter of FY
established prospective documentation and add-on payments, and the ‘‘outlier 2007 in combination with the first quarter of
coding adjustments of ¥1.2 percent for FY threshold’’ or ‘‘fixed loss’’ amount (a dollar FY 2008 (July 1, 2007 through December 31,
2008, ¥1.8 percent for FY 2009, and ¥1.8 amount by which the costs of a case must 2007). This rate of change was 5.84 percent
percent for FY 2010. On September 29, 2007, exceed payments in order to qualify for an (1.0585) or 12.03 percent (1.1204) over 2
Pub. L. 110–90 was enacted. Section 7 of outlier payment). We refer to the sum of the years.
Pub. L. 110–90 included a provision that prospective payment rate for the DRG, any As we have done in the past, we are
reduces the documentation and coding IME and DSH payments, any new technology proposing to establish the proposed FY 2009
adjustment for the MS–DRG system that we add-on payments, and the outlier threshold outlier threshold using hospital CCRs from
adopted in the FY 2008 IPPS final rule with as the outlier ‘‘fixed-loss cost threshold.’’ To the December 2007 update to the Provider-
comment period to ¥0.6 percent for FY 2008 determine whether the costs of a case exceed Specific File (PSF)—the most recent available
and ¥0.9 percent for FY 2009. To comply the fixed-loss cost threshold, a hospital’s CCR data at the time of this proposed rule. This
with the provision of section 7 of Pub. L. is applied to the total covered charges for the file includes CCRs that reflected
110–90, in a final rule that appeared in the case to convert the charges to estimated costs. implementation of the changes to the policy
Federal Register on November 27, 2007 (72 Payments for eligible cases are then made for determining the applicable CCRs that
FR 66886), we changed the IPPS based on a marginal cost factor, which is a became effective August 8, 2003 (68 FR
documentation and coding adjustment for FY percentage of the estimated costs above the 34494).
2008 to ¥0.6 percent, and revised the FY fixed-loss cost threshold. The marginal cost As discussed in the FY 2007 final rule (71
2008 national standardized amounts (as well factor for FY 2009 is 80 percent, the same FR 48150), we worked with the Office of
as other payment factors and thresholds) marginal cost factor we have used since FY Actuary to derive the methodology described
accordingly, with these revisions effective 1995 (59 FR 45367). below to develop the CCR adjustment factor.
October 1, 2007. For FY 2009, section 7 of In accordance with section For FY 2009, we are proposing to use the
Pub. L. 110–90 requires a documentation and 1886(d)(5)(A)(iv) of the Act, outlier payments same methodology to calculate the CCR
coding adjustment of ¥0.9 percent instead of for any year are projected to be not less than adjustment by using the FY 2007 operating
the ¥1.8 percent adjustment specified in the 5 percent nor more than 6 percent of total cost per discharge increase in combination
FY 2008 IPPS final rule with comment operating DRG payments plus outlier with the actual FY 2007 operating market
period. As required by statute, we are payments. Section 1886(d)(3)(B) of the Act basket increase determined by Global Insight,
applying a documentation and coding requires the Secretary to reduce the average Inc., as well as the charge inflation factor
adjustment of ¥0.9 percent to the FY 2009 standardized amount by a factor to account described above to estimate the adjustment to
IPPS national standardized amounts. The for the estimated proportion of total DRG the CCRs. (We note that the FY 2007 actual
documentation and coding adjustments payments made to outlier cases. Similarly, (otherwise referred to as ‘‘final’’) operating
established in the FY 2008 IPPS final rule section 1886(d)(9)(B)(iv) of the Act requires market basket increase reflects historical data
with comment period are cumulative. As a the Secretary to reduce the average whereas the published FY 2007 operating
result, the ¥0.9 percent documentation and standardized amount applicable to hospitals market basket update factor was based on
jlentini on PROD1PC65 with PROPOSALS2
coding adjustment in FY 2009 is in addition located in Puerto Rico to account for the Global Insight, Inc.’s 2006 second quarter
to the ¥0.6 percent adjustment in FY 2008, estimated proportion of total DRG payments forecast with historical data through the first
yielding a combined effect of ¥1.5 percent. made to outlier cases. More information on quarter of 2007.) By using the operating
As discussed in more detail in section II.D. outlier payments may be found on the CMS market basket rate-of-increase and the
of the preamble of this proposed rule, in Web site at http://www.cms.hhs.gov/ increase in the average cost per discharge
calculating the FY 2008 Puerto Rico AcuteInpatientPPS/ from hospital cost reports, we are using two
standardized amount, we made an 04_outlier.asp#TopOfPage. different measures of cost inflation. For FY
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23711
2009, we determined the adjustment by charge inflation factor for the capital CCRs point from the March 2007 update (used to
taking the percentage increase in the that was used for the operating CCRs. The calculate the FY 2008 outlier threshold) to
operating costs per discharge from FY 2005 charge inflation factor is based on the overall the December 2007 update of the PSF (used
to FY 2006 (1.0538) from the cost report and billed charges. Therefore, we believe it is to calculate the proposed FY 2009 outlier
dividing it by the final operating market appropriate to apply the charge factor to both threshold). In addition, as discussed in
basket increase from FY 2006 (1.0420). We the operating and capital CCRs. sections II.C. and II.H. of the preamble of this
repeated this calculation for 2 prior years to For purposes of estimating the proposed proposed rule, we began a 2-year phase-in of
determine the 3-year average of the rate of outlier threshold for FY 2009, we assume 3.0 the MS–DRGs in FY 2008, with the DRG
adjusted change in costs between the percent case-mix growth in FY 2009 relative weights based on a 50 percent blend
operating market basket rate-of-increase and compared with our FY 2007 claims data (that of the CMS DRGs and MS–DRGs in FY 2008
the increase in cost per case from the cost is, a 1.2 percent increase in FY 2008 and an and based on 100 percent of the MS–DRGs
report (FY 2003 to FY 2004 percentage additional 1.8 percent increase in FY 2009). beginning in FY 2009. Better recognition of
increase of operating costs per discharge of The 3 percent case-mix growth was projected severity of illnesses with the MS–DRGs
1.0629 divided by FY 2004 final operating by the Office of the Actuary as the amount means that nonoutlier payments will
market basket increase of 1.0400, FY 2004 to case-mix is expected to increase in response compensate hospitals for the higher costs of
FY 2005 percentage increase of operating to adoption of the MS–DRGs as a result of some cases that previously received outlier
costs per discharge of 1.0565 divided by FY improvements in documentation and coding payments. As cases are paid more accurately,
2005 final operating market basket increase that do not reflect real changes in patient in order to meet the 5.1 percent target, we
of 1.0430). For FY 2009, we averaged the severity of illness. It is necessary to take the need to decrease the fixed-loss outlier
differentials calculated for FY 2004, FY 2005, 3 percent expected case-mix growth into threshold so that more cases qualify for
and FY 2006, which resulted in a mean ratio account when calculating the outlier outlier payments. In addition, as noted
of 1.0154. We multiplied the 3-year average threshold that results in outlier payments previously, in our modeling of the outlier
of 1.0154 by the 2007 operating market being 5.1 percent of total payments for FY threshold, we included a 3-percent
basket percentage increase of 1.0340, which 2009. If we did not take this 3 percent adjustment for expected case-mix growth
resulted in an operating cost inflation factor projected case-mix growth into account, our between FY 2007 and FY 2009. Together, we
of 5.0 percent or 1.05. We then divided the estimate of total payments would be too low, believe that the above factors cumulatively
operating cost inflation factor by the 1-year and as a result, our estimate of the outlier contributed to a lower proposed fixed-loss
average change in charges (1.058474) and threshold would be too high. While we outlier threshold in FY 2009 compared to FY
applied an adjustment factor of 0.9920 to the assume 3 percent case-mix growth for all 2008.
operating CCRs from the PSF. hospitals in our outlier threshold
As stated in the FY 2008 final rule with calculations, the FY 2009 national (2) Other Proposed Changes Concerning
comment period, we continue to believe it is standardized amounts used to calculate the Outliers
appropriate to apply only a 1-year adjustment outlier threshold reflect the statutorily As stated in the FY 1994 IPPS final rule (58
factor to the CCRs. On average, it takes mandated documentation and coding FR 46348), we establish an outlier threshold
approximately 9 months for fiscal adjustment of ¥0.9 percent for FY 2009, on that is applicable to both hospital inpatient
intermediaries (or, if applicable, the MAC) to top of the ¥0.6 percent adjustment for FY operating costs and hospital inpatient
tentatively settle a cost report from the fiscal 2008. capital-related costs. When we modeled the
year end of a hospital’s cost reporting period. Using this methodology, we are proposing combined operating and capital outlier
The average ‘‘age’’ of hospitals’ CCRs from an outlier fixed-loss cost threshold for FY payments, we found that using a common
the time the fiscal intermediary or the MAC 2009 equal to the prospective payment rate threshold resulted in a lower percentage of
inserts the CCR in the PSF until the for the DRG, plus any IME and DSH outlier payments for capital-related costs
beginning of FY 2008 is approximately 1 payments, and any add-on payments for new than for operating costs. We are projecting
year. Therefore, as stated above, we believe technology, plus $21,025. that the proposed thresholds for FY 2009 will
a 1-year adjustment factor to the CCRs is As we did in establishing the FY 2008 result in outlier payments that will equal 5.1
appropriate. outlier threshold (72 FR 47417), in our percent of operating DRG payments and 5.73
We used the same methodology for the projection of FY 2009 outlier payments, we percent of capital payments based on the
capital CCRs and determined the adjustment are not making any adjustments for the Federal rate.
by taking the percentage increase in the possibility that hospitals’ CCRs and outlier In accordance with section 1886(d)(3)(B) of
capital costs per discharge from FY 2005 to payments may be reconciled upon cost report the Act, we are reducing the FY 2009
FY 2006 (1.0462) from the cost report and settlement. We continue to believe that, due standardized amount by the same percentage
dividing it by the final capital market basket to the policy implemented in the outlier final to account for the projected proportion of
increase from FY 2006 (1.0090). We repeated rule (68 FR 34494, June 9, 2003), CCRs will payments paid as outliers.
this calculation for 2 prior years to determine no longer fluctuate significantly and, The outlier adjustment factors that are
the 3-year average of the rate of adjusted therefore, few hospitals will actually have applied to the standardized amount for the
change in costs between the capital market these ratios reconciled upon cost report proposed FY 2009 outlier threshold are as
basket rate-of-increase and the increase in settlement. In addition, it is difficult to follows:
cost per case from the cost report (FY 2003 predict the specific hospitals that will have
to FY 2004 percentage increase of capital CCRs and outlier payments reconciled in any Operating
costs per discharge of 1.0315 divided by FY given year. We also noted that reconciliation Capital
standardized federal rate
2004 final capital market basket increase of occurs because hospitals’ actual CCRs for the amounts
1.0050, FY 2004 to FY 2005 percentage cost reporting period are different than the
increase of capital costs per discharge of interim CCRs used to calculate outlier National ......... 0.948928 0.942711
1.0311 divided by FY 2005 final capital payments when a bill is processed. Our Puerto Rico ... 0.955988 0.925627
market basket increase of 1.0060). For FY simulations assume that CCRs accurately
2009, we averaged the differentials calculated measure hospital costs based on information Consistent with current policy, we are
for FY 2004, FY 2005, and FY 2006, which available to us at the time we set the outlier applying the outlier adjustment factors to FY
resulted in a mean ratio of 1.0294. We threshold. For these reasons, we are not 2009 rates after removing the effects of the
multiplied the 3-year average of 1.0294 by making any assumptions about the effects of FY 2008 outlier adjustment factors on the
the 2007 capital market basket percentage reconciliation on the outlier threshold standardized amount.
jlentini on PROD1PC65 with PROPOSALS2
increase of 1.0120, which resulted in a calculation. To determine whether a case qualifies for
capital cost inflation factor of 4.17 percent or We also note that there are some factors outlier payments, we apply hospital-specific
1.0417. We then divided the capital cost that contributed to a proposed lower fixed CCRs to the total covered charges for the
inflation factor by the 1-year average change loss outlier threshold for FY 2009 compared case. Estimated operating and capital costs
in charges (1.058474) and applied an to FY 2008. First, the case-weighted national for the case are calculated separately by
adjustment factor of 0.9842 to the capital average operating CCR declined by applying separate operating and capital
CCRs from the PSF. We are using the same approximately an additional 1 percentage CCRs. These costs are then combined and
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23712 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
compared with the outlier fixed-loss cost of actual outlier payments did not reflect projected to be $32,011,849. The required
threshold. actual FY 2007 bills, but instead reflected the adjustment to the Federal rate used in
The outlier final rule (68 FR 34494) application of FY 2007 rates and policies to calculating Medicare inpatient prospective
eliminated the application of the statewide available FY 2006 bills. payments as a result of the demonstration is
average CCRs for hospitals with CCRs that Our current estimate, using available FY 0.999666.
fell below 3 standard deviations from the 2007 bills, is that actual outlier payments for In order to achieve budget neutrality, we
national mean CCR. However, for those FY 2007 were approximately 4.64 percent of are adjusting the national IPPS rates by an
hospitals for which the fiscal intermediary or actual total DRG payments. Thus, the data amount sufficient to account for the added
MAC computes operating CCRs greater than indicate that, for FY 2007, the percentage of costs of this demonstration. In other words,
1.213 or capital CCRs greater than 0.148, or actual outlier payments relative to actual we are applying budget neutrality across the
hospitals for whom the fiscal intermediary or total payments is lower than we projected payment system as a whole rather than
MAC is unable to calculate a CCR (as before FY 2007. Consistent with the policy merely across the participants of this
described at § 412.84(i)(3) of our regulations), and statutory interpretation we have demonstration, consistent with past practice.
we still use statewide average CCRs to maintained since the inception of the IPPS, We believe that the language of the statutory
determine whether a hospital qualifies for we do not plan to make retroactive budget neutrality requirement permits the
outlier payments.27 Table 8A in this adjustments to outlier payments to ensure agency to implement the budget neutrality
Addendum contains the statewide average that total outlier payments for FY 2007 are provision in this manner. The statutory
operating CCRs for urban hospitals and for equal to 5.1 percent of total DRG payments. language requires that ‘‘aggregate payments
rural hospitals for which the fiscal We currently estimate that actual outlier made by the Secretary do not exceed the
intermediary or MAC is unable to compute payments for FY 2008 will be approximately amount which the Secretary would have paid
a hospital-specific CCR within the above 4.8 percent of actual total DRG payments, 0.3 if the demonstration * * * was not
range. Effective for discharges occurring on percentage points lower than the 5.1 percent implemented,’’ but does not identify the
or after October 1, 2008, these statewide we projected in setting the outlier policies for range across which aggregate payments must
average ratios would replace the ratios FY 2008. This estimate is based on be held equal.
published in the IPPS final rule for FY 2008 simulations using the FY 2007 MedPAR file 5. Proposed FY 2009 Standardized Amount
(72 FR 48126–48127). Table 8B in this (discharge data for FY 2007 bills). We used
Addendum contains the comparable these data to calculate an estimate of the The adjusted proposed standardized
statewide average capital CCRs. Again, the actual outlier percentage for FY 2008 by amount is divided into labor-related and
CCRs in Tables 8A and 8B would be used applying FY 2008 rates and policies, nonlabor-related portions. Tables 1A and 1B
during FY 2009 when hospital-specific CCRs including an outlier threshold of $22,185 to of this Addendum contain the national
based on the latest settled cost report are available FY 2007 bills. standardized amounts that we are proposing
either not available or are outside the range to apply to all hospitals, except hospitals
e. Proposed Rural Community Hospital located in Puerto Rico, for FY 2009. The
noted above. For an explanation of Table 8C, Demonstration Program Adjustment (Section
we refer readers to section V. of this proposed Puerto Rico-specific amounts are
410A of Pub. L. 108–173) shown in Table 1C of this Addendum. The
Addendum.
We finally note that we published a Section 410A of Pub. L. 108–173 requires proposed amounts shown in Tables 1A and
manual update (Change Request 3966) to our the Secretary to establish a demonstration 1B differ only in that the labor-related share
outlier policy on October 12, 2005, which that will modify reimbursement for inpatient applied to the standardized amounts in Table
updated Chapter 3, Section 20.1.2 of the services for up to 15 small rural hospitals. 1A is 69.7 percent, and Table 1B is 62
Medicare Claims Processing Manual. The Section 410A(c)(2) of Pub. L. 108–173 percent. In accordance with sections
manual update covered an array of topics, requires that ‘‘in conducting the 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act,
including CCRs, reconciliation, and the time demonstration program under this section, we are applying a labor-related share of 62
value of money. We encourage hospitals that the Secretary shall ensure that the aggregate percent, unless application of that percentage
are assigned the statewide average operating payments made by the Secretary do not would result in lower payments to a hospital
and/or capital CCRs to work with their fiscal exceed the amount which the Secretary than would otherwise be made. In effect, the
intermediaries (or MAC if applicable) on a would have paid if the demonstration statutory provision means that we apply a
possible alternative operating and/or capital program under this section was not labor-related share of 62 percent for all
CCR as explained in Change Request 3966. implemented.’’ As discussed in section IV.K. hospitals (other than those in Puerto Rico)
Use of an alternative CCR developed by the of the preamble to this proposed rule, we whose wage indexes are less than or equal to
hospital in conjunction with the fiscal have satisfied this requirement by adjusting 1.0000.
intermediary or MAC can avoid possible national IPPS rates by a factor that is In addition, Tables 1A and 1B include
overpayments or underpayments at cost sufficient to account for the added costs of proposed standardized amounts reflecting
report settlement, thus ensuring better this demonstration. There are currently nine the full 3.0 percent update for FY 2009, and
accuracy when making outlier payments and hospitals participating in the demonstration proposed standardized amounts reflecting
negating the need for outlier reconciliation. program. CMS is currently conducting a the 2.0 percentage point reduction to the
We also note that a hospital may request an solicitation for up to six additional hospitals update (a 1.0 percent update) applicable for
alternative operating or capital CCR ratio at to participate in the demonstration program. hospitals that fail to submit quality data
any time as long as the guidelines of Change For this proposed rule, we used data from the consistent with section 1886(b)(3)(B)(viii) of
Request 3966 are followed. To download and cost reports of the 9 currently participating the Act.
view the manual instructions on outlier and hospitals to estimate a total cost number for Under section 1886(d)(9)(A)(ii) of the Act,
cost-to-charge ratios, visit the Web site: 15 hospitals that could potentially participate the Federal portion of the Puerto Rico
http://www.cms.hhs.gov/manuals/ in the demonstration program in FY 2009. (In payment rate is based on the discharge-
downloads/clm104c03.pdf. the final rule, we will know the exact number weighted average of the national large urban
of hospitals participating in the standardized amount (this proposed amount
(3) FY 2007 and FY 2008 Outlier Payments demonstration program, and we will revise is set forth in Table 1A). The proposed labor-
In the FY 2008 IPPS final rule (72 FR our estimates accordingly.) We estimate that related and nonlabor-related portions of the
47420), we stated that, based on available the average additional annual payment that national average standardized amounts for
data, we estimated that actual FY 2007 will be made to each participating hospital Puerto Rico hospitals for FY 2009 are set
outlier payments would be approximately 4.6 under the demonstration will be forth in Table 1C of this Addendum. This
percent of actual total DRG payments. This approximately $2,134,123. We based this table also includes the proposed Puerto Rico
jlentini on PROD1PC65 with PROPOSALS2
estimate was computed based on simulations estimate on the recent historical experience standardized amounts. The labor-related
using the FY 2006 MedPAR file (discharge of the difference between inpatient cost and share applied to the Puerto Rico specific
data for FY 2006 bills). That is, the estimate payment for hospitals that are participating standardized amount is 58.7 percent, or 62
in the demonstration program. As an estimate percent, depending on which provides higher
27 These figures represent 3.0 standard deviations of the cost for a total of 15 hospitals that may payments to the hospital. (Section
from the mean of the log distribution of CCRs for participate, the total annual impact of the 1886(d)(9)(C)(iv) of the Act, as amended by
all hospitals. demonstration program for FY 2009 is section 403(b) of Pub. L. 108–173, provides
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23713
that the labor-related share for hospitals the proposed changes for hospitals receiving table. Also, in order to properly apply the
located in Puerto Rico be 62 percent, unless the reduced update (1.0 percent) with the documentation and coding adjustment, it was
the application of that percentage would different labor-related shares that apply to necessary to first remove the FY 2008
result in lower payments to the hospital.) hospitals. The first row of the table shows the adjustment from the FY 2008 rate in the first
The following table illustrates the updated (through FY 2008) average row of the table and then later in the table
proposed changes from the FY 2008 national standardized amount after restoring the FY
average standardized amount. The second 2008 offsets for outlier payments, to cumulatively apply the sum of the FY
and third columns show the proposed demonstration budget neutrality, the New 2008 and FY 2009 adjustments (that is,
changes from the FY 2008 standardized Jersey imputed floor budget neutrality, and 1¥(.006 + .009)) to the FY 2009 rate. (For a
amounts for hospitals that satisfy the quality the geographic reclassification budget complete discussion on the documentation
data submission requirement for receiving neutrality. The DRG reclassification and and coding adjustment, we refer readers to
the full update (3.0 percent) with the recalibration and wage index budget section II.D of the preamble to this proposed
different labor-related shares that apply to neutrality factor is cumulative. Therefore, the rule.)
hospitals. The fourth and fifth columns show FY 2008 factor is not removed from this
COMPARISON OF FY 2008 STANDARDIZED AMOUNTS TO THE PROPOSED FY 2009 SINGLE STANDARDIZED AMOUNT WITH
FULL UPDATE AND REDUCED UPDATE
Full update (3.0 per- Full update (3.0 per- Reduced update (1.0 Reduced update (1.0
cent); wage index is cent); wage index is percent); wage index percent); wage index
greater than 1.0000 less than 1.0000 is greater than 1.0000 is less than 1.0000
FY 2008 Base Rate, after removing geo- Labor: $3,723.07 ........ Labor: $3,311.77 ........ Labor: $3,723.07 ........ Labor: $3,311.77
graphic reclassification budget neutrality, Nonlabor: $1,618.50 .. Nonlabor: $2,029.80 .. Nonlabor: $1,618.50 .. Nonlabor: $2,029.80
demonstration budget neutrality, docu-
mentation and coding adjustment, NJ im-
puted floor budget neutrality and outlier
offset (based on the labor and market
share percentage for FY 2009).
FY 2009 Update Factor ................................. 1.030 .......................... 1.030 .......................... 1.010 .......................... 1.010
FY 2009 DRG Recalibrations and Wage 0.999525 .................... 0.999525 .................... 0.999525 .................... 0.999525
Index Budget Neutrality Factor.
FY 2009 Reclassification Budget Neutrality 0.992333 .................... 0.992333 .................... 0.992333 .................... 0.992333
Factor.
FY 2009 Outlier Factor .................................. 0.948928 .................... 0.948928 .................... 0.948928 .................... 0.948928
Rural Demonstration Budget Neutrality Fac- 0.999666 .................... 0.999666 .................... 0.999666 .................... 0.999666
tor.
FY 2009 Documentation and Coding Adjust- 0.985 .......................... 0.985 .......................... 0.985 .......................... 0.985
ment and Actual FY 2008 Adjustment.
Proposed Rate for FY 2009 ........................... Labor: $3,553.98 ........ Labor: $3,161.36 ........ Labor: $3,484.97 ........ Labor: $3,099.97
Nonlabor: $1,544.98 .. Nonlabor: $1,937.60 .. Nonlabor: $1,514.98 .. Nonlabor: $1,899.98
Under section 1886(d)(9)(A)(ii) of the Act, B. Proposed Adjustments for Area Wage multiplying the labor-related portion of the
the Federal portion of the Puerto Rico Levels and Cost-of-Living adjusted standardized amounts by the
payment rate is based on the national average Tables 1A through 1C, as set forth in this appropriate wage index for the area in which
standardized amounts. The labor-related and Addendum, contain the proposed labor- the hospital is located. In section III. of the
nonlabor-related portions of the national related and nonlabor-related shares that we preamble to this proposed rule, we discuss
average standardized amounts for hospitals are using to calculate the proposed the data and methodology for the FY 2009
prospective payment rates for hospitals wage index.
located in Puerto Rico are set forth in Table
1C of this Addendum. This table also located in the 50 States, the District of 2. Proposed Adjustment for Cost-of-Living in
Columbia, and Puerto Rico for FY 2009. This Alaska and Hawaii
includes the Puerto Rico standardized
section addresses two types of adjustments to
amounts. The labor-related share applied to Section 1886(d)(5)(H) of the Act authorizes
the standardized amounts that were made in
the Puerto Rico standardized amount is 58.7 the Secretary to make an adjustment to take
determining the prospective payment rates as
percent, or 62 percent, depending on which described in this Addendum. into account the unique circumstances of
results in higher payments to the hospital. hospitals in Alaska and Hawaii. Higher labor-
1. Proposed Adjustment for Area Wage related costs for these two States are taken
(Section 1886(d)(9)(C)(iv) of the Act, as Levels into account in the adjustment for area wages
amended by section 403(b) of Pub. L. 108–
Sections 1886(d)(3)(E) and described above. For FY 2009, we are
173, provides that the labor-related share for
1886(d)(9)(C)(iv) of the Act require that we proposing to adjust the payments for
hospitals located in Puerto Rico be 62 make an adjustment to the labor-related hospitals in Alaska and Hawaii by
percent, unless the application of that portion of the national and Puerto Rico multiplying the nonlabor-related portion of
percentage would result in lower payments prospective payment rates, respectively, to the standardized amount by the applicable
to the hospital.) account for area differences in hospital wage adjustment factor contained in the table
levels. This adjustment is made by below.
Cost of living
Area adjustment
factor
Alaska:
City of Anchorage and 80-kilometer (50-mile) radius by road ..................................................................................................... 1.24
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23714 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
C. Proposed MS–DRG Relative Weights Step 5—Multiply the final amount from or MDH will receive for its discharges
As discussed in section II.H. of the Step 4 by the relative weight corresponding beginning on or after October 1, 2007.
preamble of this proposed rule, we have to the applicable MS–DRG (see Table 5 of b. Updating the FY 1982, FY 1987, FY 1996,
developed proposed relative weights for each this Addendum). and FY 2002 Hospital-Specific Rates for FY
MS–DRG that reflect the resource utilization The Federal rate as determined in Step 5 2009
of cases in each MS–DRG relative to is then further adjusted if the hospital
qualifies for either the IME or DSH We are proposing to increase the hospital-
Medicare cases in other MS–DRGs. Table 5 specific rates by 3.0 percent (the proposed
of this Addendum contains the proposed adjustment. In addition, for hospitals that
qualify for a low-volume payment adjustment estimated hospital market basket percentage
relative weights that we will apply to increase) for FY 2009 for those SCHs and
discharges occurring in FY 2009. These under section 1886(d)(12) of the Act and 42
CFR 412.101(b), the payment in Step 5 is MDHs that submit qualifying quality data
factors have been recalibrated as explained in and by 1.0 percent for SCHs and MDHs that
section II. of the preamble of this proposed increased by 25 percent.
fail to submit qualifying quality data. Section
rule. 2. Hospital-Specific Rate (Applicable Only to 1886(b)(3)(C)(iv) of the Act provides that the
D. Calculation of the Proposed Prospective SCHs and MDHs) update factor applicable to the hospital-
Payment Rates a. Calculation of Hospital-Specific Rate specific rates for SCHs is equal to the update
factor provided under section
General Formula for Calculation of the Section 1886(b)(3)(C) of the Act provides 1886(b)(3)(B)(iv) of the Act, which, for SCHs
Proposed Prospective Payment Rates for FY that SCHs are paid based on whichever of the in FY 2008, is the market basket rate-of-
2009 following rates yields the greatest aggregate increase for hospitals that submit qualifying
In general, the operating prospective payment: the Federal rate; the updated quality data and the market basket rate-of-
payment rate for all hospitals paid under the hospital-specific rate based on FY 1982 costs increase minus 2 percent for hospitals that
IPPS located outside of Puerto Rico, except per discharge; the updated hospital-specific fail to submit qualifying quality data. Section
SCHs and MDHs, for FY 2009 equals the rate based on FY 1987 costs per discharge; or 1886(b)(3)(D) of the Act provides that the
Federal rate. the updated hospital-specific rate based on update factor applicable to the hospital-
The prospective payment rate for SCHs for FY 1996 costs per discharge. specific rates for MDHs also equals the
FY 2009 equals the higher of the applicable As discussed previously, MDHs are update factor provided for under section
Federal rate, or the hospital-specific rate as required to rebase their hospital-specific rates 1886(b)(3)(B)(iv) of the Act, which, for FY
described below. The prospective payment to their FY 2002 cost reports if doing so 2009, is the market basket rate-of-increase for
rate for MDHs for FY 2009 equals the higher results in higher payments. In addition, hospitals that submit qualifying quality data
of the Federal rate, or the Federal rate plus effective for discharges occurring on or after and the market basket rate-of-increase minus
75 percent of the difference between the October 1, 2006, MDHs are to be paid based 2 percent for hospitals that fail to submit
Federal rate and the hospital-specific rate as on the Federal national rate or, if higher, the qualifying quality data.
described below. The prospective payment Federal national rate plus 75 percent 3. General Formula for Calculation of
rate for hospitals located in Puerto Rico for (changed from 50 percent) of the difference Proposed Prospective Payment Rates for
FY 2009 equals 25 percent of the Puerto Rico between the Federal national rate and the Hospitals Located in Puerto Rico Beginning
rate plus 75 percent of the applicable greater of the updated hospital-specific rates On or After October 1, 2008, and Before
national rate. based on either FY 1982, FY 1987 or FY 2002 October 1, 2009
1. Federal Rate costs per discharge. Further, MDHs are no
Section 1886(d)(9)(E)(iv) of the Act
The Federal rate is determined as follows: longer subject to the 12-percent cap on their
provides that, effective for discharges
Step 1—Select the applicable average DSH payment adjustment factor.
occurring on or after October 1, 2004,
standardized amount depending on whether Hospital-specific rates have been
hospitals located in Puerto Rico are paid
the hospital submitted qualifying quality data determined for each of these hospitals based
based on a blend of 75 percent of the national
(full update for qualifying hospitals, update on the FY 1982 costs per discharge, the FY
prospective payment rate and 25 percent of
minus 2.0 percentage points for 1987 costs per discharge, or, for SCHs, the FY
the Puerto Rico-specific rate.
nonqualifying hospitals). 1996 costs per discharge and for MDHs, the
Step 2—Multiply the labor-related portion FY 2002 cost per discharge. For a more a. Puerto Rico Rate
of the standardized amount by the applicable detailed discussion of the calculation of the The Puerto Rico prospective payment rate
wage index for the geographic area in which hospital-specific rates, we refer the reader to is determined as follows:
the hospital is located or the area to which the FY 1984 IPPS interim final rule (48 FR Step 1—Select the applicable average
the hospital is reclassified. 39772); the April 20, 1990 final rule with standardized amount considering the
Step 3—For hospitals in Alaska and comment (55 FR 15150); the FY 1991 IPPS applicable wage index (Table 1C of this
jlentini on PROD1PC65 with PROPOSALS2
Hawaii, multiply the nonlabor-related final rule (55 FR 35994); and the FY 2001 Addendum).
portion of the standardized amount by the IPPS final rule (65 FR 47082). In addition, for Step 2—Multiply the labor-related portion
applicable cost-of-living adjustment factor. both SCHs and MDHs, the hospital-specific of the standardized amount by the applicable
Step 4—Add the amount from Step 2 and rate is adjusted by the budget neutrality Puerto Rico-specific wage index.
the nonlabor-related portion of the adjustment factor as discussed in section III. Step 3—Add the amount from Step 2 and
standardized amount (adjusted, if applicable, of this Addendum. The resulting rate will be the nonlabor-related portion of the
under Step 3). used in determining the payment rate an SCH standardized amount.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23715
Step 4—Multiply the amount from Step 3 addition, § 412.308(c)(3) requires that the hospitals located in Puerto Rico under the
by the applicable MS–DRG relative weight capital Federal rate be reduced by an IPPS for acute care hospital inpatient capital-
(Table 5 of this Addendum). adjustment factor equal to the estimated related costs. Accordingly, under the capital
Step 5—Multiply the result in Step 4 by 25 proportion of payments for (regular and PPS, we compute a separate payment rate
percent. special) exceptions under § 412.348. Section specific to hospitals located in Puerto Rico
b. National Rate 412.308(c)(4)(ii) requires that the capital using the same methodology used to compute
standard Federal rate be adjusted so that the the national Federal rate for capital-related
The national prospective payment rate is effects of the annual DRG reclassification and costs. In accordance with section
determined as follows: the recalibration of DRG weights and changes 1886(d)(9)(A) of the Act, under the IPPS for
Step 1—Select the applicable average in the geographic adjustment factor (GAF) are acute care hospital operating costs, hospitals
standardized amount. budget neutral. located in Puerto Rico are paid for operating
Step 2—Multiply the labor-related portion For FYs 1992 through 1995, § 412.352 costs under a special payment formula. Prior
of the standardized amount by the applicable required that the capital Federal rate also be to FY 1998, hospitals located in Puerto Rico
wage index for the geographic area in which adjusted by a budget neutrality factor so that were paid a blended operating rate that
the hospital is located or the area to which aggregate payments for inpatient hospital consisted of 75 percent of the applicable
the hospital is reclassified. capital costs were projected to equal 90 standardized amount specific to Puerto Rico
Step 3—Add the amount from Step 2 and percent of the payments that would have hospitals and 25 percent of the applicable
the nonlabor-related portion of the national been made for capital-related costs on a national average standardized amount.
average standardized amount. reasonable cost basis during the respective Similarly, prior to FY 1998, hospitals located
Step 4—Multiply the amount from Step 3 fiscal year. That provision expired in FY in Puerto Rico were paid a blended capital
by the applicable MS–DRG relative weight 1996. Section 412.308(b)(2) describes the 7.4 rate that consisted of 75 percent of the
(Table 5 of this Addendum). percent reduction to the capital Federal rate applicable capital Puerto Rico-specific rate
Step 5—Multiply the result in Step 4 by 75 that was made in FY 1994, and and 25 percent of the applicable capital
percent. § 412.308(b)(3) describes the 0.28 percent Federal rate. However, effective October 1,
The sum of the Puerto Rico rate and the reduction to the capital Federal rate made in 1997, in accordance with section 4406 of
national rate computed above equals the FY 1996 as a result of the revised policy for Pub. L. 105–33, the methodology for
prospective payment for a given discharge for paying for transfers. In FY 1998, we operating payments made to hospitals
a hospital located in Puerto Rico. This rate implemented section 4402 of Pub. L. 105–33, located in Puerto Rico under the IPPS was
is then further adjusted if the hospital which required that, for discharges occurring revised to make payments based on a blend
qualifies for either the IME or DSH on or after October 1, 1997, the budget of 50 percent of the applicable standardized
adjustment. neutrality adjustment factor in effect as of amount specific to Puerto Rico hospitals and
III. Proposed Changes to Payment Rates for September 30, 1995, be applied to the 50 percent of the applicable national average
Acute Care Hospital Inpatient Capital- unadjusted capital standard Federal rate and standardized amount. In conjunction with
Related Costs for FY 2009 the unadjusted hospital-specific rate. That this change to the operating blend
The PPS for acute care hospital inpatient factor was 0.8432, which was equivalent to percentage, effective with discharges
capital-related costs was implemented for a 15.68 percent reduction to the unadjusted occurring on or after October 1, 1997, we also
cost reporting periods beginning on or after capital payment rates. An additional 2.1 revised the methodology for computing
October 1, 1991. Effective with that cost percent reduction to the rates was effective capital payments to hospitals located in
reporting period, hospitals were paid during from October 1, 1997 through September 30, Puerto Rico to be based on a blend of 50
a 10-year transition period (which extended 2002, making the total reduction 17.78 percent of the Puerto Rico capital rate and 50
through FY 2001) to change the payment percent. As we discussed in the FY 2003 percent of the capital Federal rate.
methodology for Medicare acute care hospital IPPS final rule (67 FR 50102) and As we discussed in the FY 2005 IPPS final
inpatient capital-related costs from a implemented in § 412.308(b)(6), the 2.1 rule (69 FR 49185), section 504 of Pub. L.
reasonable cost-based methodology to a percent reduction was restored to the 108–173 increased the national portion of the
prospective methodology (based fully on the unadjusted capital payment rates effective operating IPPS payments for hospitals
Federal rate). October 1, 2002. located in Puerto Rico from 50 percent to
The basic methodology for determining To determine the appropriate budget 62.5 percent and decreased the Puerto Rico
Federal capital prospective rates is set forth neutrality adjustment factor and the regular portion of the operating IPPS payments from
in the regulations at 42 CFR 412.308 through exceptions payment adjustment during the 50 percent to 37.5 percent for discharges
412.352. Below we discuss the factors that 10-year transition period, we developed a occurring on or after April 1, 2004 through
we are proposing to use to determine the dynamic model of Medicare inpatient September 30, 2004 (see the March 26, 2004
capital Federal rate for FY 2009, which capital-related costs; that is, a model that One-Time Notification (Change Request
would be effective for discharges occurring projected changes in Medicare inpatient 3158)). In addition, section 504 of Pub. L.
on or after October 1, 2008. capital-related costs over time. With the 108–173 provided that the national portion of
The 10-year transition period ended with expiration of the budget neutrality provision, operating IPPS payments for hospitals
hospital cost reporting periods beginning on the capital cost model was only used to located in Puerto Rico is equal to 75 percent
or after October 1, 2001 (FY 2002). Therefore, estimate the regular exceptions payment and the Puerto Rico portion of operating IPPS
for cost reporting periods beginning in FY adjustment and other factors during the payments is equal to 25 percent for
2002, all hospitals (except ‘‘new’’ hospitals transition period. As we explained in the FY discharges occurring on or after October 1,
under § 412.304(c)(2)) are paid based on the 2002 IPPS final rule (66 FR 39911), beginning 2004. Consistent with that change in
capital Federal rate. For FY 1992, we in FY 2002, an adjustment for regular operating IPPS payments to hospitals located
computed the standard Federal payment rate exception payments is no longer necessary in Puerto Rico, for FY 2005 (as we discussed
for capital-related costs under the IPPS by because regular exception payments were in the FY 2005 IPPS final rule), we revised
updating the FY 1989 Medicare inpatient only made for cost reporting periods the methodology for computing capital
capital cost per case by an actuarial estimate beginning on or after October 1, 1991, and payments to hospitals located in Puerto Rico
of the increase in Medicare inpatient capital before October 1, 2001 (see § 412.348(b)). to be based on a blend of 25 percent of the
costs per case. Each year after FY 1992, we Because payments are no longer made under Puerto Rico capital rate and 75 percent of the
update the capital standard Federal rate, as the regular exception policy effective with capital Federal rate for discharges occurring
provided at § 412.308(c)(1), to account for cost reporting periods beginning in FY 2002, on or after October 1, 2004.
jlentini on PROD1PC65 with PROPOSALS2
capital input price increases and other we discontinued use of the capital cost
factors. The regulations at § 412.308(c)(2) model. The capital cost model and its A. Determination of Proposed Federal
provide that the capital Federal rate be application during the transition period are Hospital Inpatient Capital-Related
adjusted annually by a factor equal to the described in Appendix B of the FY 2002 IPPS Prospective Payment Rate Update
estimated proportion of outlier payments final rule (66 FR 40099). In the FY 2008 IPPS final rule with
under the capital Federal rate to total capital Section 412.374 provides for the use of a comment period (72 FR 66886 through
payments under the capital Federal rate. In blended payment system for payments to 66888), we established a capital Federal rate
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23716 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
of $426.14 for FY 2008. In the discussion that The case-mix index can change for any of factors. In setting a prospective payment rate
follows, we explain the factors that we are several reasons: under the framework, we make an
proposing to use to determine the proposed • The average resource use of Medicare adjustment for forecast error only if our
FY 2009 capital Federal rate. In particular, patients changes (‘‘real’’ case-mix change); estimate of the change in the capital input
we explain why the proposed FY 2009 • Changes in hospital coding of patient price index for any year is off by 0.25
capital Federal rate would decrease records result in higher weight MS–DRG percentage points or more. There is a 2-year
approximately 1.14 percent, compared to the assignments (‘‘coding effects’’); and lag between the forecast and the availability
FY 2008 capital Federal rate. However, taking • The annual MS–DRG reclassification and of data to develop a measurement of the
into account an estimated increase in recalibration changes may not be budget forecast error. A forecast error of 0.10
Medicare fee-for-service discharges in FY neutral (‘‘reclassification effect’’). percentage point was calculated for the FY
2009 as compared to FY 2008, as well as the We define real case-mix change as actual 2007 update. That is, current historical data
estimated increase in payments due to changes in the mix (and resource indicate that the forecasted FY 2007 CIPI (1.1
documentation and coding (discussed in requirements) of Medicare patients as percent) used in calculating the FY 2007
section VIII. of Appendix A to this proposed opposed to changes in coding behavior that update factor slightly understated the actual
rule), we estimate that the increase in result in assignment of cases to higher realized price increases (1.2 percent) by 0.10
aggregate capital payments would be weighted MS-DRGs but do not reflect higher percentage point. This slight underprediction
negligible during this same period resource requirements. The capital update was mostly due to the incorporation of newly
(approximately $6 million). Total payments framework includes the same case-mix index available source data for fixed asset prices
to hospitals under the IPPS are relatively adjustment used in the former operating IPPS and moveable asset prices into the market
unaffected by changes in the capital update framework (as discussed in the May basket. However, because this estimation of
prospective payments. Because capital 18, 2004 IPPS proposed rule for FY 2005 (69 the change in the CIPI is less than 0.25
payments constitute about 10 percent of FR 28816)). (We no longer use an update percentage points, it is not reflected in the
hospital payments, a 1-percent change in the framework to make a recommendation for update recommended under this framework.
capital Federal rate yields only about a 0.1 updating the operating IPPS standardized Therefore, we are proposing to make a 0.0
percent change in actual payments to amounts as discussed in section II. of percent adjustment for forecast error in the
hospitals. As noted above, aggregate Appendix B in the FY 2006 IPPS final rule update for FY 2009.
payments under the capital IPPS are (70 FR 47707).) Under the capital IPPS update framework,
projected to increase in FY 2009 compared to Absent the projected increase in case-mix we also make an adjustment for changes in
FY 2008. resulting from documentation and coding intensity. We calculate this adjustment using
1. Projected Capital Standard Federal Rate improvements under the recently adopted the same methodology and data that were
Update MS-DRGs, for FY 2009, we are projecting a used in the past under the framework for
1.0 percent total increase in the case-mix operating IPPS. The intensity factor for the
a. Description of the Update Framework index. We estimate that the real case-mix operating update framework reflects how
Under § 412.308(c)(1), the capital standard increase will also equal 1.0 percent for FY hospital services are utilized to produce the
Federal rate is updated on the basis of an 2009. The net adjustment for change in case- final product, that is, the discharge. This
analytical framework that takes into account mix is the difference between the projected component accounts for changes in the use
changes in a capital input price index (CIPI) real increase in case-mix and the projected of quality-enhancing services, for changes
and several other policy adjustment factors. total increase in case-mix. Therefore, the net within DRG severity, and for expected
Specifically, we have adjusted the projected adjustment for case-mix change in FY 2009 modification of practice patterns to remove
CIPI rate-of-increase as appropriate each year is 0.0 percentage points. noncost-effective services.
for case-mix index-related changes, for The capital update framework also We calculate case-mix constant intensity as
intensity, and for errors in previous CIPI contains an adjustment for the effects of DRG the change in total charges per admission,
forecasts. The proposed update factor for FY reclassification and recalibration. This adjusted for price level changes (the CPI for
2009 under that framework is 0.7 percent adjustment is intended to remove the effect hospital and related services) and changes in
based on the best data available at this time. on total payments of prior year’s changes to real case-mix. The use of total charges in the
The proposed update factor under that the DRG classifications and relative weights, calculation of the intensity factor makes it a
framework is based on a projected 1.2 in order to retain budget neutrality for all total intensity factor; that is, charges for
percent increase in the CIPI, a 0.0 percent case-mix index-related changes other than capital services are already built into the
adjustment for intensity, a 0.0 percent those due to patient severity. Due to the lag calculation of the factor. Therefore, we have
adjustment for case-mix, a ¥0.5 percent time in the availability of data, there is a 2- incorporated the intensity adjustment from
adjustment for the FY 2007 DRG year lag in data used to determine the the operating update framework into the
reclassification and recalibration, and a adjustment for the effects of DRG capital update framework. Without reliable
forecast error correction of 0.0 percent. As reclassification and recalibration. For estimates of the proportions of the overall
discussed below in section III.C. of the example, we are adjusting for the effects of annual intensity increases that are due,
Addendum to this proposed rule, we the FY 2007 DRG reclassification and respectively, to ineffective practice patterns
continue to believe that the CIPI is the most recalibration as part of our proposed update and the combination of quality-enhancing
appropriate input price index for capital for FY 2009. We estimate that FY 2007 DRG new technologies and complexity within the
costs to measure capital price changes in a reclassification and recalibration resulted in DRG system, we assume that one-half of the
given year. We also explain the basis for the a 0.5 percent change in the case-mix when annual increase is due to each of these
FY 2009 CIPI projection in that same section compared with the case-mix index that factors. The capital update framework thus
of this Addendum. In addition, as also noted would have resulted if we had not made the provides an add-on to the input price index
below, the proposed capital rates would be reclassification and recalibration changes to rate of increase of one-half of the estimated
further adjusted to account for the DRGs. Therefore, we are proposing to annual increase in intensity, to allow for
documentation and coding improvements make a ¥0.5 percent adjustment for DRG increases within DRG severity and the
under the MS–DRGs discussed in section reclassification in the proposed update for adoption of quality-enhancing technology.
II.D. of the preamble of this proposed rule. FY 2009 to maintain budget neutrality. We have developed a Medicare-specific
Below we describe the policy adjustments The capital update framework also intensity measure based on a 5-year average.
that we are proposing to apply in the update contains an adjustment for forecast error. The Past studies of case-mix change by the RAND
framework for FY 2009. input price index forecast is based on Corporation (Has DRG Creep Crept Up?
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The case-mix index is the measure of the historical trends and relationships Decomposing the Case Mix Index Change
average MS–DRG weight for cases paid under ascertainable at the time the update factor is Between 1987 and 1988 by G. M. Carter, J.
the IPPS. Because the MS–DRG weight established for the upcoming year. In any P. Newhouse, and D. A. Relles, R–4098–
determines the prospective payment for each given year, there may be unanticipated price HCFA/ProPAC (1991)) suggest that real case-
case, any percentage increase in the case-mix fluctuations that may result in differences mix change was not dependent on total
index corresponds to an equal percentage between the actual increase in prices and the change, but was usually a fairly steady
increase in hospital payments. forecast used in calculating the update increase of 1.0 to 1.5 percent per year.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23717
However, we used 1.4 percent as the upper (discussed below). For FY 2004 and FY 2005, (approximately 12 percent and 8 percent,
bound because the RAND study did not take the change in hospitals’ charges is somewhat respectively), for example, which, while less
into account that hospitals may have induced lower in comparison to FY 2003, but is still than the increase in the previous 3 years, are
doctors to document medical records more significantly large. For FY 2006 and FY 2007, still much higher than increases in years
completely in order to improve payment. the change in hospitals’ charges appears to be prior to FY 2001. In addition, these increases
We calculate case-mix constant intensity as slightly moderating. However, the change in in charges for FYs 2003, FY 2004, and FY
the change in total charges per admission, hospitals’ charges for FYs 2003 and 2004 and 2005 significantly exceed the respective case-
adjusted for price level changes (the CPI for to a somewhat lesser extent FY 2005 remains mix increases for the same period. Based on
hospital and related services), and changes in similar to the considerable increase in
the significant increases in charges for FYs
real case-mix. As we noted above, in hospitals’ charges that we found when
2003 through 2005 that remain in the 5-year
accordance with § 412.308(c)(1)(ii), we began examining hospitals’ charge data in
updating the capital standard Federal rate in determining the intensity factor in the update average used for the intensity adjustment, we
FY 1996 using an update framework that recommendations for the past few years, as believe residual effects of hospitals’ charge
takes into account, among other things, discussed in the FY 2004 IPPS final rule (68 practices prior to the implementation of the
allowable changes in the intensity of hospital FR 45482), the FY 2005 IPPS final rule (69 outlier policy revisions established in the
services. For FYs 1996 through 2001, we FR 49285), the FY 2006 IPPS final rule (70 June 9, 2003 final rule continue to appear in
found that case-mix constant intensity was FR 47500), the FY 2007 IPPS final rule (72 the data, because it may have taken hospitals
declining, and we established a 0.0 percent FR 47500), and the FY 2008 IPPS final rule some time to adopt changes in their behavior
adjustment for intensity in each of those with comment period (72 FR 47426). If in response to the new outlier policy. Thus,
years. For FYs 2002 and 2003, we found that hospitals were treating new or different types we believe that the FY 2003, FY 2004, FY
case-mix constant intensity was increasing, of cases, which would result in an 2005 charge data may still be skewed.
and we established a 0.3 percent adjustment appropriate increase in charges per Although it appears that the change in
and 1.0 percent adjustment for intensity, discharge, then we would expect hospitals’ hospitals’ charges is more reasonable because
respectively. For FYs 2004 and 2005, we case-mix to increase proportionally. As we the intensity adjustment is based on a 5-year
found that the charge data appeared to be discussed most recently in the FY 2008 IPPS average, and although the new outlier policy
skewed (as discussed in greater detail below), final rule with comment period (72 FR was generally effective in FY 2004, we
and we established a 0.0 percent adjustment 47426), because our intensity calculation believe the effects of hospitals attempting to
in each of those years. Furthermore, we relies heavily upon charge data and we maximize outlier payments, while lessening
stated that we would continue to apply a 0.0 believe that these charge data may be costs, continue to skew the charge data.
percent adjustment for intensity until any inappropriately skewed, we established a 0.0 Therefore, we are proposing to make a 0.0
increase in charges can be tied to intensity percent adjustment for intensity for FY 2008 percent adjustment for intensity for FY 2009.
rather than attempts to maximize outlier just as we did for FYs 2004 through 2007.
In the past (FYs 1996 through 2001) when we
payments. On June 9, 2003, we published in the
found intensity to be declining, we believed
As noted above, our intensity measure is Federal Register revisions to our outlier
based on a 5-year average, and therefore, the policy for determining the additional a zero (rather than negative) intensity
intensity adjustment for FY 2009 is based on payment for extraordinarily high-cost cases adjustment was appropriate. Similarly, we
data from the 5-year period beginning with (68 FR 34494 through 34515). These revised believe that it is appropriate to apply a zero
FY 2003 and extending through FY 2007. policies were effective on August 8, 2003, intensity adjustment for FY 2009 until any
There continues to be a substantial increase and October 1, 2003. While it does appear increase in charges during the 5-year period
in hospital charges for three of those 5 years that a response to these policy changes is upon which the intensity adjustment is based
without a corresponding increase in the beginning to occur, that is, the increase in can be tied to intensity rather than to
hospital case-mix index. Most dramatically, charges for FYs 2004 and 2005 are somewhat attempts to maximize outlier payments.
for FY 2003, the change in hospitals’ charges less than the previous 4 years, they still show Above, we described the basis of the
is over 16 percent, which is reflective of the a significant annual increase in charges components used to develop the proposed
large increases in charges that we found in without a corresponding increase in hospital 0.7 percent capital update factor for all
the 4 years prior to FY 2003 and before our case-mix. Specifically, the increases in hospitals under the capital update framework
revisions to the outlier policy in 2003 charges in FY 2004 and FY 2005 for FY 2009 as shown in the table below.
b. Comparison of CMS and MedPAC Update (MedPAC’s Report to the Congress: Medicare be reduced by an adjustment factor equal to
Recommendation Payment Policy, March 2008, Section 2A.) the estimated proportion of capital-related
In its March 2008 Report to Congress, 2. Proposed Outlier Payment Adjustment outlier payments to total inpatient capital-
Factor related PPS payments. The outlier thresholds
MedPAC did not make a specific update
are set so that operating outlier payments are
recommendation for capital IPPS payments Section 412.312(c) establishes a unified projected to be 5.1 percent of total operating
jlentini on PROD1PC65 with PROPOSALS2
for FY 2009. However, in that same report, outlier payment methodology for inpatient DRG payments.
in assessing the adequacy of current operating and inpatient capital-related costs. In the FY 2008 IPPS final rule with
payments and costs, MedPAC recommended A single set of thresholds is used to identify comment (72 FR 66887), we estimated that
an update to the hospital inpatient and outlier cases for both inpatient operating and outlier payments for capital would equal 4.77
outpatient PPS rates equal to the increase in inpatient capital-related payments. Section percent of inpatient capital-related payments
the hospital market basket in FY 2009, 412.308(c)(2) provides that the standard based on the capital Federal rate in FY 2008.
concurrent with a quality incentive program. Federal rate for inpatient capital-related costs Based on the proposed thresholds as set forth
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23718 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
in section II.A. of this Addendum, we basis of the capital Federal rate without such relative weights and the proposed FY 2009
estimate that proposed outlier payments for changes. Because we implemented a separate GAFs. We established the final FY 2008
capital-related costs would equal 5.73 GAF for Puerto Rico, we apply separate budget neutrality factors of 0.9902 for the
percent for inpatient capital-related budget neutrality adjustments for the national capital rate and 0.9955 for the
payments based on the proposed capital national GAF and the Puerto Rico GAF. We Puerto Rico capital rate. In making the
Federal rate in FY 2009. Therefore, we are apply the same budget neutrality factor for comparison, we set the exceptions reduction
proposing to apply an outlier adjustment DRG reclassifications and recalibration factor to 1.00. To achieve budget neutrality
factor of 0.9427 to the capital Federal rate. nationally and for Puerto Rico. Separate for the changes in the national GAFs, based
Thus, we estimate that the percentage of adjustments were unnecessary for FY 1998 on calculations using updated data, we are
capital outlier payments to total capital and earlier because the GAF for Puerto Rico proposing to apply an incremental budget
standard payments for FY 2009 will be was implemented in FY 1998. neutrality adjustment of 1.0013 for FY 2009
higher than the percentages for FY 2008. This In the past, we used the actuarial capital to the previous cumulative FY 2008
increase is primarily due to the proposed cost model (described in Appendix B of the adjustments of 0.9902, yielding a proposed
decrease to the fixed-loss amount, which is FY 2002 IPPS final rule (66 FR 40099)) to adjustment of 0.9915, through FY 2009. For
discussed section II.A. of this Addendum. estimate the aggregate payments that would the Puerto Rico GAFs, we are proposing to
The outlier reduction factors are not built have been made on the basis of the capital apply a proposed incremental budget
permanently into the capital rates; that is, Federal rate with and without changes in the neutrality adjustment of 1.0009 for FY 2009
they are not applied cumulatively in DRG classifications and weights and in the
to the previous cumulative FY 2008
determining the capital Federal rate. The GAF to compute the adjustment required to
adjustment of 0.9955, yielding a proposed
proposed FY 2009 outlier adjustment of maintain budget neutrality for changes in
cumulative adjustment of 0.9965 (calculated
0.9427 is a ¥1.01percent change from the FY DRG weights and in the GAF. During the
with unrounded numbers) through FY 2009.
2008 outlier adjustment of 0.9523. Therefore, transition period, the capital cost model was
also used to estimate the regular exception We then compared estimated aggregate
the net change in the proposed outlier capital Federal rate payments based on the
adjustment to the capital Federal rate for FY payment adjustment factor. As we explain in
section III.A. of this Addendum, beginning in FY 2008 DRG relative weights and the
2009 is 0.9899 (0.9427/0.9523). Thus, the proposed FY 2009 GAFs to estimated
proposed outlier adjustment decreases the FY FY 2002, an adjustment for regular exception
payments is no longer necessary. Therefore, aggregate capital Federal rate payments based
2009 capital Federal rate by 1.01 percent on the cumulative effects of the proposed FY
compared with the FY 2008 outlier we will no longer use the capital cost model.
Instead, we are using historical data based on 2009 DRG relative weights and the proposed
adjustment. FY 2009 GAFs. The proposed incremental
hospitals’ actual cost experiences to
3. Proposed Budget Neutrality Adjustment determine the exceptions payment adjustment for proposed DRG classifications
Factor for Changes in DRG Classifications adjustment factor for special exceptions and proposed changes in relative weights is
and Weights and the GAF payments. 0.9994 both nationally and for Puerto Rico.
Section 412.308(c)(4)(ii) requires that the To determine the proposed factors for FY The proposed cumulative adjustments for
capital Federal rate be adjusted so that 2009, we compared (separately for the DRG classifications and changes in relative
aggregate payments for the fiscal year based national capital rate and the Puerto Rico weights and for proposed changes in the
on the capital Federal rate after any changes capital rate) estimated aggregate capital GAFs through FY 2009 are 0.9909 nationally
resulting from the annual DRG Federal rate payments based on the FY 2008 and 0.9959 for Puerto Rico. The following
reclassification and recalibration and changes DRG relative weights and the FY 2008 GAF table summarizes the adjustment factors for
in the GAF are projected to equal aggregate to estimated aggregate capital Federal rate each fiscal year:
payments that would have been made on the payments based on the proposed FY 2009 BILLING CODE 4120–01–P
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23719
BILLING CODE 4120–01–C separately from the effects of other changes geographic reclassification has on the other
The methodology used to determine the in the hospital wage index and the DRG payment parameters, such as the payments
recalibration and geographic (DRG/GAF) relative weights. Under the capital PPS, there for serving low-income patients or indirect
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budget neutrality adjustment factor is similar is a single DRG/GAF budget neutrality medical education payments.
to the methodology used in establishing adjustment factor (the national capital rate In the FY 2008 IPPS correction notice (72
budget neutrality adjustments under the PPS and the Puerto Rico capital rate are FR 57636), we calculated a GAF/DRG budget
for operating costs. One difference is that, determined separately) for changes in the neutrality factor of 0.9996 for FY 2008. For
under the operating PPS, the budget GAF (including geographic reclassification) FY 2009, we are proposing to establish a
neutrality adjustments for the effect of and the DRG relative weights. In addition, GAF/DRG budget neutrality factor of 1.0007.
geographic reclassifications are determined there is no adjustment for the effects that The GAF/DRG budget neutrality factors are
ep30ap08.021</GPH>
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23720 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
built permanently into the capital rates; that special exceptions payments if it meets the are proposing an additional 0.9 percent
is, they are applied cumulatively in following criteria: (1) A project need reduction to the proposed standardized
determining the capital Federal rate. This requirement as described at § 412.348(g)(2), amounts for both capital and operating
follows the requirement that estimated which, in the case of certain urban hospitals, Federal payment rates in FY 2009. The
aggregate payments each year be no more or includes an excess capacity test as described proposed 0.9 percent reduction is based on
less than they would have been in the at § 412.348(g)(4); (2) an age of assets test as our Actuary’s analysis of the effect of changes
absence of the annual DRG reclassification described at § 412.348(g)(3); and (3) a project in coding or classification of discharges that
and recalibration and changes in the GAFs. size requirement as described at do not reflect real changes in case-mix in
The incremental change in the proposed § 412.348(g)(5). light of the adoption of the MS–DRGs.
adjustment from FY 2008 to FY 2009 is Based on information compiled from our Although the proposed 0.9 percent reduction
1.0007. The cumulative change in the fiscal intermediaries, six hospitals have is outside the established process for
proposed capital Federal rate due to this qualified for special exceptions payments developing the proposed capital Federal
proposed adjustment is 0.9909 (the product under § 412.348(g). Because we have cost payment rate, it nevertheless is a factor in the
of the incremental factors for FYs 1994 reports ending in FY 2005 for all of these final prospective payment rate to hospitals
though 2008 and the proposed incremental hospitals, we calculated the adjustment for capital-related costs. For that reason, the
factor of 1.0007 for FY 2009). (We note that based on actual cost experience. Using data proposed national capital Federal payment
averages of the incremental factors that were from cost reports ending in FY 2005 from the rate proposed in this proposed rule was
in effect during FYs 2004 and 2005, December 2007 update of the HCRIS data, we determined by applying the proposed 0.9
respectively, were used in the calculation of divided the capital special exceptions percent reduction. (As discussed below in
the proposed cumulative adjustment of payment amounts for the six hospitals that section II.A.6. of this Addendum, we are not
0.9909 for FY 2009.) qualified for special exceptions by the total proposing to apply the proposed 0.9 percent
The proposed factor accounts for DRG capital PPS payment amounts (including reduction in developing the proposed FY
reclassifications and recalibration and for special exception payments) for all hospitals. 2009 Puerto Rico-specific capital rate.) As a
changes in the GAFs. It also incorporates the Based on the data from cost reports ending result of the proposed 0.70 percent update
effects on the proposed GAFs of FY 2009 in FY 2005, this ratio is rounded to 0.0002. and other proposed budget neutrality factors
geographic reclassification decisions made by We also computed the ratios for FY 2004 and discussed above, we are proposing to
the MGCRB compared to FY 2008 decisions. FY 2003, which both round to 0.0003. Since establish a capital Federal rate of $421.29 for
However, it does not account for changes in the ratios are trending downward, we are FY 2009. The proposed capital Federal rate
payments due to changes in the DSH and proposing an adjustment of 0.0002. Because for FY 2009 was calculated as follows:
IME adjustment factors. special exceptions are budget neutral, we are • The proposed FY 2009 update factor is
4. Exceptions Payment Adjustment Factor proposing to offset the proposed capital 1.0070, that is, the update is 0.70 percent.
Federal rate by 0.02 percent for special • The proposed FY 2009 budget neutrality
Section 412.308(c)(3) of our regulations exceptions payments for FY 2009. Therefore, adjustment factor that is applied to the
requires that the capital standard Federal rate the proposed exceptions adjustment factor is capital standard Federal payment rate for
be reduced by an adjustment factor equal to equal to 0.9998 (1¥0.0002) to account for changes in the DRG relative weights and in
the estimated proportion of additional special exceptions payments in FY 2009.
payments for both regular exceptions and the GAFs is 1.0007.
In the FY 2008 IPPS final rule with • The proposed FY 2009 outlier
special exceptions under § 412.348 relative to comment period (72 FR 47430), we estimated
total capital PPS payments. In estimating the adjustment factor is 0.9427.
that total (special) exceptions payments for • The proposed FY 2009 (special)
proportion of regular exception payments to FY 2008 would equal 0.03 percent of
total capital PPS payments during the exceptions payment adjustment factor is
aggregate payments based on the capital 0.9998.
transition period, we used the actuarial Federal rate. Therefore, we applied an
capital cost model originally developed for • The proposed FY 2009 reduction for
exceptions adjustment factor of 0.9997 (1 ¥ improvements in documentation and coding
determining budget neutrality (described in 0.0003) to determine the FY 2008 capital
Appendix B of the FY 2002 IPPS final rule under the MS–DRGs is 0.9 percent.
Federal rate. As we stated above, we estimate Because the proposed capital Federal rate
(66 FR 40099)) to determine the exceptions that exceptions payments in FY 2009 would
payment adjustment factor, which was has already been adjusted for differences in
equal 0.02 percent of aggregate payments case-mix, wages, cost-of-living, indirect
applied to both the Federal and hospital- based on the proposed FY 2009 capital
specific capital rates. medical education costs, and payments to
Federal rate. Therefore, we are proposing to hospitals serving a disproportionate share of
An adjustment for regular exception apply an exceptions payment adjustment
payments is no longer necessary in low-income patients, we are not proposing to
factor of 0.9998 to the proposed capital make additional adjustments in the proposed
determining the FY 2009 capital Federal rate Federal rate for FY 2009. The proposed
because, in accordance with § 412.348(b), capital standard Federal rate for these factors,
exceptions adjustment factor for FY 2009 is other than the budget neutrality factor for
regular exception payments were only made slightly lower than the factor used in
for cost reporting periods beginning on or changes in the DRG relative weights and the
determining the FY 2008 capital Federal rate
after October 1, 1991 and before October 1, GAFs.
in the FY 2008 IPPS final rule. The
2001. Accordingly, as we explained in the FY We are providing the following chart that
exceptions reduction factors are not built
2002 IPPS final rule (66 FR 39949), in FY shows how each of the proposed factors and
permanently into the capital rates; that is, the
2002 and subsequent fiscal years, no adjustments for FY 2009 affected the
factors are not applied cumulatively in
payments are made under the regular computation of the proposed FY 2009 capital
determining the capital Federal rate.
exceptions provision. However, in Federal rate in comparison to the FY 2008
Therefore, the net change in the proposed
accordance with § 412.308(c), we still need to capital Federal rate. The proposed FY 2009
exceptions adjustment factor used in
compute a budget neutrality adjustment for update factor has the effect of increasing the
determining the proposed FY 2009 capital
special exception payments under proposed capital Federal rate by 0.70 percent
Federal rate is 1.0001 (0.9998/0.9997).
§ 412.348(g). We describe our methodology compared to the FY 2008 capital Federal rate.
for determining the exceptions adjustment 5. Proposed Capital Standard Federal Rate for The proposed GAF/DRG budget neutrality
used in calculating the FY 2008 capital FY 2009 factor has the effect of increasing the
Federal rate below. In the FY 2008 IPPS final rule with proposed capital Federal rate by 0.07 percent.
Under the special exceptions provision comment period (72 FR 66888), we The proposed FY 2009 outlier adjustment
specified at § 412.348(g)(1), eligible hospitals established a capital Federal rate of $426.14 factor has the effect of decreasing the
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include SCHs, urban hospitals with at least for all hospitals for FY 2008. We are proposed capital Federal rate by 1.01 percent
100 beds that have a disproportionate share proposing to establish an update of 0.7 compared to the FY 2008 capital Federal rate.
percentage of at least 20.2 percent or qualify percent in determining the proposed FY 2009 The proposed FY 2009 exceptions payment
for DSH payments under § 412.106(c)(2), and capital Federal rate for all hospitals. adjustment factor has the effect of increasing
hospitals with a combined Medicare and However, under the statutory authority at the proposed capital Federal rate by 0.01
Medicaid inpatient utilization of at least 70 section 1886(d)(3)(A)(vi) of the Act, and as percent. The proposed adjustment for
percent. An eligible hospital may receive specified in section 7 of Pub. L. 110–90, we improvements in documentation and coding
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23721
under the MS–DRGs has the effect of the FY 2008 capital Federal rate. The by 1.14 percent compared to the FY 2008
decreasing the proposed FY 2009 capital combined effect of all the proposed changes capital Federal rate.
Federal rate by 0.9 percent as compared to decreases the proposed capital Federal rate
COMPARISON OF FACTORS AND ADJUSTMENTS: FY 2008 CAPITAL FEDERAL RATE AND PROPOSED FY 2009 CAPITAL
FEDERAL RATE
Proposed FY Percent
FY 2008 Change
2009 4 change 5
6. Proposed Special Capital Rate for Puerto combined proposed cumulative adjustment the 0.9 percent documentation and coding
Rico Hospitals of 1.0004. adjustment to the proposed FY 2009 Puerto
Section 412.374 provides for the use of a In computing the payment for a particular Rico-specific portion of the blended capital
blended payment system for payments to Puerto Rico hospital, the Puerto Rico portion payment. However, as also discussed in
of the capital rate (25 percent) is multiplied section II.D. of the preamble of this proposed
hospitals located in Puerto Rico under the
by the Puerto Rico-specific GAF for the labor rule, we may propose to apply such an
PPS for acute care hospital inpatient capital-
market area in which the hospital is located, adjustment to the Puerto Rico operating and
related costs. Accordingly, under the capital capital rates in the future. With the changes
and the national portion of the capital rate
PPS, we compute a separate payment rate we are proposing to make to the other factors
(75 percent) is multiplied by the national
specific to hospitals located in Puerto Rico used to determine the capital rate, the
GAF for the labor market area in which the
using the same methodology used to compute proposed FY 2009 special capital rate for
hospital is located (which is computed from
the national Federal rate for capital-related hospitals in Puerto Rico is $197.19.
national data for all hospitals in the United
costs. Under the broad authority of section
States and Puerto Rico). In FY 1998, we B. Calculation of the Proposed Inpatient
1886(g) of the Act, as discussed in section V. implemented a 17.78 percent reduction to the
of the preamble of this proposed rule, Capital-Related Prospective Payments for FY
Puerto Rico capital rate as a result of Pub. L. 2009
beginning with discharges occurring on or 105–33. In FY 2003, a small part of that
after October 1, 2004, capital payments to reduction was restored. Because the 10-year capital PPS transition
hospitals located in Puerto Rico are based on For FY 2008, before application of the period ended in FY 2001, all hospitals
a blend of 25 percent of the Puerto Rico (except ‘‘new’’ hospitals under § 412.324(b)
GAF, the special capital rate for hospitals
capital rate and 75 percent of the capital and under § 412.304(c)(2)) are paid based on
located in Puerto Rico was $201.67 for
Federal rate. The Puerto Rico capital rate is 100 percent of the capital Federal rate in FY
discharges occurring on or after October 1,
derived from the costs of Puerto Rico 2007. The applicable capital Federal rate was
2007, through September 30, 2008 (72 FR
hospitals only, while the capital Federal rate determined by making the following
66888). However, as discussed in greater
is derived from the costs of all acute care adjustments:
detail in section II.D. of the preamble of this • For outliers, by dividing the capital
hospitals participating in the IPPS (including proposed rule, we are revising this rate in a
Puerto Rico). standard Federal rate by the outlier reduction
forthcoming correction notice that will be factor for that fiscal year; and
To adjust hospitals’ capital payments for retroactive to October 1, 2007, to remove the
geographic variations in capital costs, we • For the payment adjustments applicable
application of the 0.6 percent documentation to the hospital, by multiplying the hospital’s
apply a GAF to both portions of the blended and coding adjustment for FY 2008, GAF, disproportionate share adjustment
capital rate. The GAF is calculated using the consistent with the correction to the Puerto factor, and IME adjustment factor, when
operating IPPS wage index, and varies Rico specific standardized amount for FY appropriate.
depending on the labor market area or rural 2008. The statute gives broad authority to the For purposes of calculating payments for
area in which the hospital is located. We use Secretary under section 1886(g) of the Act, each discharge during FY 2009, the capital
the Puerto Rico wage index to determine the with respect to the development of and standard Federal rate would be adjusted as
GAF for the Puerto Rico part of the capital- adjustments to a capital PPS. Although we follows: (Standard Federal Rate) × (DRG
blended rate and the national wage index to would not be outside the authority of section weight) × (GAF) × (COLA for hospitals
determine the GAF for the national part of 1886(g) of the Act in applying the located in Alaska and Hawaii) × (1 +
the blended capital rate. documentation and coding adjustment to the Disproportionate Share Adjustment Factor +
Because we implemented a separate GAF Puerto Rico-specific portion of the capital IME Adjustment Factor, if applicable). The
for Puerto Rico in FY 1998, we also apply payment rate, we have historically made result is the adjusted capital Federal rate. (As
separate budget neutrality adjustments for changes to the capital PPS consistent with discussed above and in section V. of the
the national GAF and for the Puerto Rico those changes made to the IPPS. Thus, we are preamble of this proposed rule, we
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GAF. However, we apply the same budget removing the documentation and coding eliminated the large urban add-on adjustment
neutrality factor for DRG reclassifications and adjustment from the FY 2008 Puerto Rico- in existing regulations at § 412.316,
recalibration nationally and for Puerto Rico. specific portion of the blended capital beginning in FY 2008.)
As we stated above in section III.A.4. of this payment rate, consistent with its removal Hospitals also may receive outlier
Addendum, for Puerto Rico, the proposed from the Puerto Rico-specific standardized payments for those cases that qualify under
GAF budget neutrality factor is 1.0009, while amount under the IPPS for operating costs. the thresholds established for each fiscal
the DRG adjustment is 0.9994, for a Furthermore, we are not proposing to apply year. Section 412.312(c) provides for a single
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23722 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
set of thresholds to identify outlier cases for weight price index that measures the price market basket, estimated to be 3.0 percent.
both inpatient operating and inpatient changes associated with capital costs during Consistent with our historical approach, if
capital-related payments. The proposed a given year. The CIPI differs from the more recent data are available for the final
outlier thresholds for FY 2009 are in section operating input price index in one important rule, we will use those data to calculate the
II.A. of this Addendum. For FY 2009, a case aspect—the CIPI reflects the vintage nature of IPPS operating market basket. For this
qualifies as a cost outlier if the cost for the capital, which is the acquisition and use of proposed rule, we are proposing to calculate
case plus the IME and DSH payments is capital over time. Capital expenses in any the IPPS operating market basket for FY 2009
greater than the prospective payment rate for given year are determined by the stock of using the most recent data available. For
the DRG plus the proposed fixed-loss amount capital in that year (that is, capital that cancer and children’s hospitals and RNHCIs,
of $21,025. remains on hand from all current and prior the proposed FY 2009 rate-of-increase
An eligible hospital may also qualify for a capital acquisitions). An index measuring percentage that is applied to FY 2008 target
special exceptions payment under capital price changes needs to reflect this amounts in order to calculate the proposed
§ 412.348(g) up through the 10th year beyond vintage nature of capital. Therefore, the CIPI FY 2009 target amounts is based on Global
the end of the capital transition period if it was developed to capture the vintage nature Insight, Inc.’s 2008 forecast of the IPPS
meets the following criteria: (1) A project of capital by using a weighted-average of past operating market basket increase, in
need requirement described at capital purchase prices up to and including accordance with the applicable regulations at
§ 412.348(g)(2), which in the case of certain the current year. 42 CFR 413.40.
urban hospitals includes an excess capacity We periodically update the base year for IRFs, IPFs, and LTCHs were previously
test as described at § 412.348(g)(4); and (2) a the operating and capital input prices to paid under the reasonable cost methodology.
project size requirement as described at reflect the changing composition of inputs for However, the statute was amended to provide
§ 412.348(g)(5). Eligible hospitals include operating and capital expenses. The CIPI was for the implementation of prospective
SCHs, urban hospitals with at least 100 beds last rebased to FY 2002 in the FY 2006 IPPS payment systems for IRFs, IPFs, and LTCHs.
that have a DSH patient percentage of at least final rule (70 FR 47387). In general, the prospective payment systems
20.2 percent or qualify for DSH payments 2. Forecast of the CIPI for FY 2009 for IRFs, IPFs, and LTCHs provide
under § 412.106(c)(2), and hospitals that have transitioning periods of varying lengths of
a combined Medicare and Medicaid inpatient Based on the latest forecast by Global
time during which a portion of the
utilization of at least 70 percent. Under Insight, Inc. (first quarter of 2008), we are
prospective payment is based on cost-based
§ 412.348(g)(8), the amount of a special forecasting the CIPI to increase 1.2 percent in
reimbursement rules under 42 CFR Part 413
exceptions payment is determined by FY 2009. This reflects a projected 1.9 percent
(certain providers do not receive a
comparing the cumulative payments made to increase in vintage-weighted depreciation
transitioning period or may elect to bypass
the hospital under the capital PPS to the prices (building and fixed equipment, and
the transition as applicable under 42 CFR
cumulative minimum payment level. This movable equipment), and a 2.9 percent
increase in other capital expense prices in FY part 412, subparts N, O, and P.) We note that
amount is offset by: (1) Any amount by the various transitioning periods provided for
which a hospital’s cumulative capital 2009, partially offset by 2.8 percent decline
in vintage-weighted interest expenses in FY under the IRF PPS, the IPF PPS, and the
payments exceed its cumulative minimum LTCH PPS have ended. For cost reporting
payment levels applicable under the regular 2009. The weighted average of these three
factors produces the 1.2 percent increase for periods beginning on or after October 1,
exceptions process for cost reporting periods 2002, all IRFs are paid 100 percent of the
beginning during which the hospital has the CIPI as a whole in FY 2009.
adjusted Federal rate under the IRF PPS.
been subject to the capital PPS; and (2) any IV. Proposed Changes to Payment Rates for Therefore, for cost reporting periods
amount by which a hospital’s current year Excluded Hospitals and Hospital Units: beginning on or after October 1, 2002, no
operating and capital payments (excluding 75 Rate-of-Increase Percentages portion of an IRF PPS payment is subject to
percent of operating DSH payments) exceed 42 CFR part 413. Similarly, for cost reporting
its operating and capital costs. Under Historically, hospitals and hospital units
excluded from the prospective payment periods beginning on or after October 1,
§ 412.348(g)(6), the minimum payment level 2006, all LTCHs are paid 100 percent of the
system received payment for inpatient
is 70 percent for all eligible hospitals. adjusted Federal prospective payment rate
hospital services they furnished on the basis
During the transition period, new hospitals under the LTCH PPS. Therefore, for cost
of reasonable costs, subject to a rate-of-
(as defined under § 412.300) were exempt reporting periods beginning on or after
increase ceiling. An annual per discharge
from the capital IPPS for their first 2 years October 1, 2006, no portion of the LTCH PPS
limit (the target amount as defined in
of operation and were paid 85 percent of payment is subject to 42 CFR part 413.
§ 413.40(a)) was set for each hospital or
their reasonable costs during that period. Likewise, for cost reporting periods
hospital unit based on the hospital’s own
Effective with the third year of operation beginning on or after January 1, 2008, all IPFs
cost experience in its base year. The target
through the remainder of the transition are paid 100 percent of the Federal per diem
amount was multiplied by the Medicare
period, under § 412.324(b), we paid the amount under the IPF PPS. Therefore, for
discharges and applied as an aggregate upper
hospitals under the appropriate transition limit (the ceiling as defined in § 413.40(a)) on cost reporting periods beginning on or after
methodology (if the hold-harmless total inpatient operating costs for a hospital’s January 1, 2008, no portion of an IPF PPS
methodology were applicable, the hold- cost reporting period. Prior to October 1, payment is subject to 42 CFR part 413.
harmless payment for assets in use during the 1997, these payment provisions applied
base period would extend for 8 years, even V. Tables
consistently to all categories of excluded
if the hold-harmless payments extend beyond providers (rehabilitation hospitals and units This section contains the tables referred to
the normal transition period). (now referred to as IRFs), psychiatric throughout the preamble to this proposed
Under § 412.304(c)(2), for cost reporting hospitals and units (now referred to as IPFs), rule and in this Addendum. Tables 1A, 1B,
periods beginning on or after October 1, LTCHs, children’s hospitals, and cancer 1C, 1D, 2, 3A, 3B, 4A, 4B, 4C, 4D, 4D–1, 4D–
2002, we pay a new hospital 85 percent of hospitals). 2, 4E, 4F, 4G, 4H, 4J, 5, 6A, 6B, 6C, 6D, 6E,
its reasonable costs during the first 2 years Payment for services furnished in 6F, 7A, 7B, 8A, 8B, 8C, 9A, 9C, 10, and 11
of operation unless it elects to receive children’s hospitals and cancer hospitals that are presented below. The following tables
payment based on 100 percent of the capital are excluded from the IPPS continues to be discussed in section II. of the preamble of
Federal rate. Effective with the third year of subject to the rate-of-increase ceiling based this proposed rule are available only through
operation, we pay the hospital based on 100 on the hospital’s own historical cost the Internet on the CMS Web site at: http://
percent of the capital Federal rate (that is, the experience. (We note that, in accordance www.cms.hhs.gov/AcuteInpatientPPS/: Table
jlentini on PROD1PC65 with PROPOSALS2
same methodology used to pay all other with § 403.752(a), RNHCIs are also subject to 6G.—Additions to the CC Exclusions List;
hospitals subject to the capital PPS). the rate-of-increase limits established under Table 6H.—Deletions from the CC Exclusions
C. Capital Input Price Index § 413.40 of the regulations.) List; Table 6I.—Complete List of
We are proposing that the FY 2009 rate-of- Complication and Comorbidity (CC)
1. Background increase percentage for cancer and children’s Exclusions; Table 6J.—Major Complication
Like the operating input price index, the hospitals and RNHCIs is the percentage and Comorbidity (MCC) List; and Table 6K.—
capital input price index (CIPI) is a fixed- increase in the FY 2009 IPPS operating Complication and Comorbidity (CC).
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23723
The tables presented in this section of the Table 4B.—Wage Index and Capital FY 2007 MedPAR Update—December 2007
Addendum are as follows: Geographic Adjustment Factor (GAF) for GROUPER V25.0 MS–DRGs
Table 1A.—National Adjusted Operating Rural Areas by CBSA and by State—FY Table 7B.—Medicare Prospective Payment
Standardized Amounts, Labor/Nonlabor 2009 System Selected Percentile Lengths of Stay:
(69.7 Percent Labor Share/30.3 Percent Table 4C.—Wage Index and Capital FY 2007 MedPAR Update—December 2007
Nonlabor Share If Wage Index Is Greater Geographic Adjustment Factor (GAF) for GROUPER V26.0 MS–DRGs
Than 1) Hospitals That Are Reclassified by CBSA Table 8A.—Proposed Statewide Average
Table 1B.—National Adjusted Operating and by State—FY 2009 Operating Cost-to-Charge Ratios— March
Standardized Amounts, Labor/Nonlabor Table 4D–1.—Rural Floor Budget Neutrality 2008
(62 Percent Labor Share/38 Percent Factors—FY 2009 Table 8B.—Proposed Statewide Average
Nonlabor Share If Wage Index Is Less Than Table 4D–2.—Urban Areas with Hospitals Capital Cost-to-Charge Ratios—March 2008
or Equal To 1) Receiving the Statewide Rural Floor or Table 8C.—Proposed Statewide Average
Table 1C.—Adjusted Operating Standardized Imputed Floor Wage Index—FY 2009 Total Cost-to-Charge Ratios for LTCHs—
Amounts for Puerto Rico, Labor/Nonlabor Table 4E.—Urban CBSAs and Constituent March 2008
Table 1D.—Capital Standard Federal Counties—FY 2009 Table 9A.—Hospital Reclassifications and
Payment Rate Table 4F.—Puerto Rico Wage Index and Redesignations—FY 2009
Table 2.—Hospital Case-Mix Indexes for Capital Geographic Adjustment Factor Table 9C.—Hospitals Redesignated as Rural
Discharges Occurring in Federal Fiscal (GAF) by CBSA—FY 2009 under Section 1886(d)(8)(E) of the Act—FY
Year 2007; Hospital Wage Indexes for Table 4J.—Out-Migration Adjustment—FY 2009
Federal Fiscal Year 2009; Hospital Average 2009 Table 10.—Geometric Mean Plus the Lesser
Hourly Wages for Federal Fiscal Years
Table 5.—List of Medicare Severity of .75 of the National Adjusted Operating
2007 (2003 Wage Data), 2008 (2004 Wage
Diagnosis-Related Groups (MS–DRGs), Standardized Payment Amount (Increased
Data), and 2009 (2005 Wage Data); and 3-
Year Average of Hospital Average Hourly Relative Weighting Factors, and Geometric to Reflect the Difference Between Costs and
Wages and Arithmetic Mean Length of Stay Charges) or .75 of One Standard Deviation
Table 3A.—FY 2009 and 3-Year Average Table 6A.—New Diagnosis Codes of Mean Charges by Medicare Severity
Hourly Wage for Urban Areas by CBSA Table 6B.—New Procedure Codes Diagnosis-Related Group (MS–DRG)—
Table 3B.—FY 2009 and 3-Year Average Table 6C.—Invalid Diagnosis Codes March 2008
Hourly Wage for Rural Areas by CBSA Table 6D.—Invalid Procedure Codes Table 11.—Proposed FY 2009 MS–LTC–
Table 4A.—Wage Index and Capital Table 6E.—Revised Diagnosis Code Titles DRGs, Proposed Relative Weights,
Geographic Adjustment Factor (GAF) for Table 6F.—Revised Procedure Code Titles Proposed Geometric Average Length of
Urban Areas by CBSA and by State—FY Table 7A.—Medicare Prospective Payment Stay, and Proposed Short-Stay Outlier
2009 System Selected Percentile Lengths of Stay: Threshold
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23724 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23726 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23727
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23728 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23729
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23730 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23731
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23732 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23733
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23734 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23735
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23736 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23737
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23738 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23739
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23740 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23741
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23742 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23743
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23744 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00218 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23745
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00219 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23746 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00220 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23747
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00221 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23748 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00222 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23749
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00223 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23750 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00224 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23751
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00225 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23752 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00226 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23753
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00227 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23754 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00228 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23755
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00229 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23756 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00230 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23757
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00231 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23758 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00232 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23759
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00233 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23760 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00234 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23761
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00235 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23762 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00236 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23763
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00237 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23764 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00238 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23765
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00239 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23766 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00240 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23767
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00241 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23768 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00242 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23769
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00243 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23770 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00244 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23771
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00245 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23772 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00246 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23773
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00247 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23774 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00248 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23775
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00249 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23776 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00250 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23777
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23778 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23779
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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23780 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23781
TABLE 2.—HOSPITAL CASE-MIX INDEXES FOR DISCHARGES OCCURRING IN FEDERAL FISCAL YEAR 2007; HOSPITAL WAGE
INDEXES FOR FEDERAL FISCAL YEAR 2009; HOSPITAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2007
(2003 WAGE DATA), 2008 (2004 WAGE DATA) AND 2009 (2005 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL
AVERAGE HOURLY WAGES—Continued
Average Average Average Average
Case-mix FY 2009 wage
Provider No. hourly wage hourly wage hourly wage hourly wage**
index 2 index FY 2007 FY 2008 FY 2009 1 (3 years)
TABLE 3A.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR URBAN AREAS BY CBSA
[*Based on the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
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23782 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 3A.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR URBAN AREAS BY CBSA—Continued
[*Based on the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23783
TABLE 3A.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR URBAN AREAS BY CBSA—Continued
[*Based on the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
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23784 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 3A.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR URBAN AREAS BY CBSA—Continued
[*Based on the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23785
TABLE 3A.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR URBAN AREAS BY CBSA—Continued
[*Based on the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
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23786 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 3A.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR URBAN AREAS BY CBSA—Continued
[*Based on the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23787
TABLE 3A.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR URBAN AREAS BY CBSA—Continued
[*Based on the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
TABLE 3B.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR RURAL AREAS BY CBSA
[*Based on the sum of the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
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23788 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 3B.—FY 2009 AND 3-YEAR* AVERAGE HOURLY WAGE FOR RURAL AREAS BY CBSA—Continued
[*Based on the sum of the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
TABLE 4A.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR URBAN AREAS BY CBSA AND BY
STATE—FY 2009
[Constituent counties are listed in Table 4E.]
Wage
CBSA Code Urban area State GAF
index
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23789
TABLE 4A.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR URBAN AREAS BY CBSA AND BY
STATE—FY 2009—Continued
[Constituent counties are listed in Table 4E.]
Wage
CBSA Code Urban area State GAF
index
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23790 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4A.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR URBAN AREAS BY CBSA AND BY
STATE—FY 2009—Continued
[Constituent counties are listed in Table 4E.]
Wage
CBSA Code Urban area State GAF
index
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23791
TABLE 4A.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR URBAN AREAS BY CBSA AND BY
STATE—FY 2009—Continued
[Constituent counties are listed in Table 4E.]
Wage
CBSA Code Urban area State GAF
index
30780 ........... Little Rock-North Little Rock-Conway, AR .................................................................................... AR ..... 0.8754 0.9129
30860 ........... Logan, UT-ID ................................................................................................................................. ID ...... 0.8827 0.9181
30860 ........... Logan, UT-ID ................................................................................................................................. UT ..... 0.8827 0.9181
30980 ........... Longview, TX ................................................................................................................................. TX ..... 0.8666 0.9066
31020 ........... Longview, WA ................................................................................................................................ WA .... 1.1434 1.0961
31084 ........... Los Angeles-Long Beach-Glendale, CA ........................................................................................ CA ..... 1.1916 1.1275
31140 ........... Louisville-Jefferson County, KY-IN ................................................................................................ IN ...... 0.9238 0.9472
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23792 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4A.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR URBAN AREAS BY CBSA AND BY
STATE—FY 2009—Continued
[Constituent counties are listed in Table 4E.]
Wage
CBSA Code Urban area State GAF
index
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23793
TABLE 4A.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR URBAN AREAS BY CBSA AND BY
STATE—FY 2009—Continued
[Constituent counties are listed in Table 4E.]
Wage
CBSA Code Urban area State GAF
index
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23794 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4A.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR URBAN AREAS BY CBSA AND BY
STATE—FY 2009—Continued
[Constituent counties are listed in Table 4E.]
Wage
CBSA Code Urban area State GAF
index
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23795
TABLE 4B.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR RURAL AREAS BY CBSA AND BY
STATE—FY 2009
CBSA Rural area State Wage index GAF
code
TABLE 4C.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR HOSPITALS THAT ARE
RECLASSIFIED BY CBSA AND BY STATE—FY 2009
CBSA Area State Wage index GAF
code
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23796 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4C.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR HOSPITALS THAT ARE
RECLASSIFIED BY CBSA AND BY STATE—FY 2009—Continued
CBSA Area State Wage index GAF
code
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23797
TABLE 4C.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR HOSPITALS THAT ARE
RECLASSIFIED BY CBSA AND BY STATE—FY 2009—Continued
CBSA Area State Wage index GAF
code
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23798 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4C.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR HOSPITALS THAT ARE
RECLASSIFIED BY CBSA AND BY STATE—FY 2009—Continued
CBSA Area State Wage index GAF
code
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23799
TABLE 4C.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR HOSPITALS THAT ARE
RECLASSIFIED BY CBSA AND BY STATE—FY 2009—Continued
CBSA Area State Wage index GAF
code
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23800 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4C.—WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR HOSPITALS THAT ARE
RECLASSIFIED BY CBSA AND BY STATE—FY 2009—Continued
CBSA Area State Wage index GAF
code
TABLE 4D–1.—RURAL FLOOR BUDGET TABLE 4D–1.—RURAL FLOOR BUDGET TABLE 4D–1.—RURAL FLOOR BUDGET
NEUTRALITY FACTORS—FY 2009 NEUTRALITY FACTORS—FY 2009— NEUTRALITY FACTORS—FY 2009—
Continued Continued
Rural floor
budget Rural floor Rural floor
State neutrality budget budget
ajustment State neutrality State neutrality
factor ajustment ajustment
factor factor
Alabama ................................ 1.00000
Alaska ................................... 0.99734 Massachusetts ...................... 1.00000 Rhode Island ........................ 1.00000
Arizona .................................. 1.00000 Michigan ............................... 1.00000 South Carolina ...................... 0.99840
Arkansas ............................... 1.00000 Minnesota ............................. 1.00000 South Dakota ........................ 1.00000
California ............................... 0.98552 Mississippi ............................ 1.00000 Tennessee ............................ 0.99741
Colorado ............................... 0.99683
Missouri ................................ 0.99910 Texas .................................... 0.99980
Connecticut ........................... 0.96390
Montana ................................ 1.00000 Utah ...................................... 1.00000
Delaware ............................... 1.00000
Washington, DC ................... 1.00000 Nebraska .............................. 1.00000 Vermont ................................ 0.90100
Florida ................................... 0.99781 Nevada ................................. 1.00000 Virginia .................................. 0.99991
Georgia ................................. 1.00000 New Hampshire .................... 0.97787 Washington ........................... 0.99791
Hawaii ................................... 1.00000 New Jersey ........................... 0.98738 West Virginia ........................ 0.99782
Idaho ..................................... 1.00000 New Mexico .......................... 0.99875 Wisconsin ............................. 0.99809
Illinois .................................... 0.99993 New York .............................. 1.00000 Wyoming ............................... 1.00000
Indiana .................................. 0.99928 North Carolina ...................... 0.99983
Iowa ...................................... 0.99572 North Dakota ........................ 0.99424 * Maryland hospitals, under section
Ohio ...................................... 0.99906 1814(b)(3) of the Act, are waived from the
Kansas .................................. 1.00000 IPPS ratesetting. Therefore, the rural floor
Kentucky ............................... 1.00000 Oklahoma ............................. 0.99983 budget neutrality adjustment does not apply.
Louisiana .............................. 0.99945 Oregon .................................. 0.99955 ** The rural floor budget neutrality factor for
Maine .................................... 1.00000 Pennsylvania ........................ 0.99895 New Jersey is based on an imputed floor (see
Maryland ............................... ........................ Puerto Rico ........................... 1.00000 Table 4B).
TABLE 4D–2.—URBAN AREAS WITH HOSPITALS RECEIVING THE STATEWIDE RURAL FLOOR OR IMPUTED FLOOR WAGE
INDEX—FY 2009
[*Only hospitals that are geographically located in the specified State receive the State’s rural or imputed floor wage index.]
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23801
TABLE 4D–2.—URBAN AREAS WITH HOSPITALS RECEIVING THE STATEWIDE RURAL FLOOR OR IMPUTED FLOOR WAGE
INDEX—FY 2009—Continued
[*Only hospitals that are geographically located in the specified State receive the State’s rural or imputed floor wage index.]
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23802 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4D–2.—URBAN AREAS WITH HOSPITALS RECEIVING THE STATEWIDE RURAL FLOOR OR IMPUTED FLOOR WAGE
INDEX—FY 2009—Continued
[*Only hospitals that are geographically located in the specified State receive the State’s rural or imputed floor wage index.]
TABLE 4E.—URBAN CBSAS AND TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON-
CONSTITUENT COUNTIES—FY 2009 STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009—
Continued Continued
CBSA Urban area
code (constituent counties) CBSA Urban area CBSA Urban area
code (constituent counties) code (constituent counties)
10180 ...... Abilene, TX
Callahan County, TX Anderson County, SC Richmond County, GA
Jones County, TX 11460 ...... Ann Arbor, MI Aiken County, SC
Taylor County, TX Washtenaw County, MI Edgefield County, SC
10380 ...... Aguadilla-Isabela-San Sebastián, 11500 ...... Anniston-Oxford, AL 12420 ...... 1 Austin-Round Rock, TX
PR Calhoun County, AL Bastrop County, TX
Aguada Municipio, PR 11540 ...... Appleton, WI Caldwell County, TX
Aguadilla Municipio, PR Calumet County, WI Hays County, TX
Añasco Municipio, PR Outagamie County, WI Travis County, TX
Isabela Municipio, PR 11700 ...... Asheville, NC Williamson County, TX
Lares Municipio, PR Buncombe County, NC 12540 ...... Bakersfield, CA
Moca Municipio, PR Haywood County, NC Kern County, CA
Rincón Municipio, PR Henderson County, NC 12580 ...... 1 Baltimore-Towson, MD
San Sebastián Municipio, PR Madison County, NC Anne Arundel County, MD
10420 ...... Akron, OH 12020 ...... Athens-Clarke County, GA Baltimore County, MD
Portage County, OH Clarke County, GA Carroll County, MD
Summit County, OH Madison County, GA Harford County, MD
10500 ...... Albany, GA Oconee County, GA Howard County, MD
Baker County, GA Oglethorpe County, GA Queen Anne’s County, MD
Dougherty County, GA 12060 ...... 1 Atlanta-Sandy Springs-Marietta, Baltimore City, MD
Lee County, GA GA 12620 ...... Bangor, ME
Terrell County, GA Barrow County, GA Penobscot County, ME
Worth County, GA Bartow County, GA 12700 ...... Barnstable Town, MA
10580 ...... Albany-Schenectady-Troy, NY Butts County, GA Barnstable County, MA
Albany County, NY Carroll County, GA 12940 ...... Baton Rouge, LA
Rensselaer County, NY Cherokee County, GA Ascension Parish, LA
Saratoga County, NY Clayton County, GA East Baton Rouge Parish, LA
Schenectady County, NY Cobb County, GA East Feliciana Parish, LA
Schoharie County, NY Coweta County, GA Iberville Parish, LA
10740 ...... Albuquerque, NM Dawson County, GA Livingston Parish, LA
Bernalillo County, NM DeKalb County, GA Pointe Coupee Parish, LA
Sandoval County, NM Douglas County, GA St. Helena Parish, LA
Torrance County, NM Fayette County, GA West Baton Rouge Parish, LA
Valencia County, NM Forsyth County, GA West Feliciana Parish, LA
10780 ...... Alexandria, LA Fulton County, GA 12980 ...... Battle Creek, MI
Grant Parish, LA Gwinnett County, GA Calhoun County, MI
Rapides Parish, LA Haralson County, GA 13020 ...... Bay City, MI
10900 ...... Allentown-Bethlehem-Easton, Heard County, GA Bay County, MI
PA-NJ Henry County, GA 13140 ...... Beaumont-Port Arthur, TX
Warren County, NJ Jasper County, GA Hardin County, TX
Carbon County, PA Lamar County, GA Jefferson County, TX
Lehigh County, PA Meriwether County, GA Orange County, TX
Northampton County, PA Newton County, GA 13380 ...... Bellingham, WA
11020 ...... Altoona, PA Paulding County, GA Whatcom County, WA
Blair County, PA Pickens County, GA 13460 ...... Bend, OR
11100 ...... Amarillo, TX Pike County, GA Deschutes County, OR
Armstrong County, TX Rockdale County, GA 13644 ...... 1 Bethesda-Frederick-Gaithers-
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23803
TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON-
STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009—
Continued Continued Continued
CBSA Urban area CBSA Urban area CBSA Urban area
code (constituent counties) code (constituent counties) code (constituent counties)
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23804 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON-
STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009—
Continued Continued Continued
CBSA Urban area CBSA Urban area CBSA Urban area
code (constituent counties) code (constituent counties) code (constituent counties)
20260 ...... Duluth, MN-WI 22520 ...... Florence-Muscle Shoals, AL 24780 ...... Greenville, NC
Carlton County, MN Colbert County, AL Greene County, NC
St. Louis County, MN Lauderdale County, AL Pitt County, NC
Douglas County, WI 22540 ...... Fond du Lac, WI 24860 ...... Greenville-Mauldin-Easley, SC
20500 ...... Durham, NC Fond du Lac County, WI Greenville County, SC
Chatham County, NC 22660 ...... Fort Collins-Loveland, CO Laurens County, SC
Durham County, NC Larimer County, CO Pickens County, SC
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23805
TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON-
STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009—
Continued Continued Continued
CBSA Urban area CBSA Urban area CBSA Urban area
code (constituent counties) code (constituent counties) code (constituent counties)
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23806 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON-
STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009—
Continued Continued Continued
CBSA Urban area CBSA Urban area CBSA Urban area
code (constituent counties) code (constituent counties) code (constituent counties)
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23807
TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON-
STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009—
Continued Continued Continued
CBSA Urban area CBSA Urban area CBSA Urban area
code (constituent counties) code (constituent counties) code (constituent counties)
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23808 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON-
STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009—
Continued Continued Continued
CBSA Urban area CBSA Urban area CBSA Urban area
code (constituent counties) code (constituent counties) code (constituent counties)
Orleans County, NY Bexar County, TX 42020 ...... San Luis Obispo-Paso Robles,
Wayne County, NY Comal County, TX CA
40420 ...... Rockford, IL Guadalupe County, TX San Luis Obispo County, CA
Boone County, IL Kendall County, TX 42044 ...... 1 Santa Ana-Anaheim-Irvine, CA
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23809
TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON- TABLE 4E.—URBAN CBSAS AND CON-
STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009— STITUENT COUNTIES—FY 2009—
Continued Continued Continued
CBSA Urban area CBSA Urban area CBSA Urban area
code (constituent counties) code (constituent counties) code (constituent counties)
Yuba County, CA
Brooks County, GA Black Hawk County, IA 49740 ...... Yuma, AZ
Echols County, GA Bremer County, IA Yuma County, AZ
Lanier County, GA Grundy County, IA
Lowndes County, GA 48140 ...... Wausau, WI 1 Large urban area.
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23810 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 4F.—PUERTO RICO WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) BY CBSA—FY 2009
[Note: The rural floor budget neutrality adjustment is not applicable to the Puerto Rico-specific wage index.]
Wage GAF—re-
index—re-
CBSA code Area Wage index GAF classified
classified hospitals
hospitals
The following list represents all hospitals 1886(d)(10) of the Act or redesignated under deemed to have waived the out-migration
that are eligible to have their wage index section 1886(d)(8)(B) of the Act wish to retain adjustment, unless they explicitly notify
increased by the out-migration adjustment their reclassification/redesignation status and CMS that they elected to receive the out-
listed in this table. Hospitals cannot receive waive the application of the out-migration migration adjustment instead within 45 days
the out-migration adjustment if they are adjustment. Section 1886(d)(10) hospitals from the publication of this proposed rule.
reclassified under section 1886(d)(10) of the that wish to receive the out-migration
Act or redesignated under section adjustment, rather than their reclassification, These notifications should be sent to the
1886(d)(8)(B) of the Act. Hospitals that have should follow the termination/withdrawal following address: Centers for Medicare and
already been reclassified under section procedures specified in 42 CFR 412.273 and Medicaid Services, Center for Medicare
1886(d)(10) of the Act or redesignated under section III.I.3. of the preamble of this Management, Attn.: Wage Index Adjustment
section 1886(d)(8)(B) of the Act are proposed rule. Otherwise, they will be Waivers, Division of Acute Care, Room C4–
designated with an asterisk. We will deemed to have waived the out-migration 08–06, 7500 Security Boulevard, Baltimore,
automatically assume that hospitals that have adjustment. Hospitals redesignated under MD 21244–1850.
already been reclassified under section section 1886(d)(8)(B) of the Act will be
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23818 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23819
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
jlentini on PROD1PC65 with PROPOSALS2
special pay
acute DRG DRG
001 ........... No ............ No ............ PRE SURG ...... Heart transplant or implant of heart 23.4061 29.1 40.2
assist system w MCC.
002 ........... No ............ No ............ PRE SURG ...... Heart transplant or implant of heart 12.8956 18.4 24.7
assist system w/o MCC.
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23820 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
003 ........... Yes .......... No ............ PRE SURG ...... ECMO or trach w MV 96+ hrs or PDX 18.3635 32.5 39.6
exc face, mouth & neck w maj O.R.
004 ........... Yes .......... No ............ PRE SURG ...... Trach w MV 96+ hrs or PDX exc face, 11.1684 23.5 28.8
mouth & neck w/o maj O.R..
005 ........... No ............ No ............ PRE SURG ...... Liver transplant w MCC or intestinal 10.7436 15.9 21.2
transplant.
006 ........... No ............ No ............ PRE SURG ...... Liver transplant w/o MCC .................... 4.8292 8.9 10.2
007 ........... No ............ No ............ PRE SURG ...... Lung transplant .................................... 9.7325 15.9 19.7
008 ........... No ............ No ............ PRE SURG ...... Simultaneous pancreas/kidney trans- 4.8917 10.1 11.9
plant.
009 ........... No ............ No ............ PRE SURG ...... Bone marrow transplant ...................... 6.6398 18.2 21.9
010 ........... No ............ No ............ PRE SURG ...... Pancreas transplant ............................ 3.7508 9.1 10.8
011 ........... No ............ No ............ PRE SURG ...... Tracheostomy for face,mouth & neck 4.8900 13.1 16.7
diagnoses w MCC.
012 ........... No ............ No ............ PRE SURG ...... Tracheostomy for face,mouth & neck 3.0563 8.9 10.7
diagnoses w CC.
013 ........... No ............ No ............ PRE SURG ...... Tracheostomy for face,mouth & neck 1.9057 5.9 6.9
diagnoses w/o CC/MCC.
020 ........... No ............ No ............ 01 SURG ...... Intracranial vascular procedures w 8.3276 14.8 18.4
PDX hemorrhage w MCC.
021 ........... No ............ No ............ 01 SURG ...... Intracranial vascular procedures w 6.3534 13.7 15.4
PDX hemorrhage w CC.
022 ........... No ............ No ............ 01 SURG ...... Intracranial vascular procedures w 4.2072 7.6 9.4
PDX hemorrhage w/o CC/MCC.
023 ........... No ............ No ............ 01 SURG ...... Cranio w major dev impl/acute com- 5.0763 8.9 12.7
plex CNS PDX w MCC or chemo
implant.
024 ........... No ............ No ............ 01 SURG ...... Cranio w major dev impl/acute com- 3.4757 6.3 9.0
plex CNS PDX w/o MCC.
025 ........... Yes .......... No ............ 01 SURG ...... Craniotomy & endovascular 5.0324 9.9 13.0
intracranial procedures w MCC.
026 ........... Yes .......... No ............ 01 SURG ...... Craniotomy & endovascular 3.0107 6.5 8.2
intracranial procedures w CC.
027 ........... Yes .......... No ............ 01 SURG ...... Craniotomy & endovascular 2.1083 3.5 4.5
intracranial procedures w/o CC/
MCC.
028 ........... Yes .......... Yes .......... 01 SURG ...... Spinal procedures w MCC .................. 5.1853 10.7 14.3
029 ........... Yes .......... Yes .......... 01 SURG ...... Spinal procedures w CC or spinal 2.7949 5.1 7.1
neurostimulators.
030 ........... Yes .......... Yes .......... 01 SURG ...... Spinal procedures w/o CC/MCC ......... 1.5395 2.8 3.7
031 ........... Yes .......... No ............ 01 SURG ...... Ventricular shunt procedures w MCC 4.3899 9.4 13.1
032 ........... Yes .......... No ............ 01 SURG ...... Ventricular shunt procedures w CC .... 1.9471 4.0 6.0
033 ........... Yes .......... No ............ 01 SURG ...... Ventricular shunt procedures w/o CC/ 1.3334 2.3 3.0
MCC.
034 ........... No ............ No ............ 01 SURG ...... Carotid artery stent procedure w MCC 3.2182 4.6 7.2
035 ........... No ............ No ............ 01 SURG ...... Carotid artery stent procedure w CC .. 2.0258 2.1 3.3
036 ........... No ............ No ............ 01 SURG ...... Carotid artery stent procedure w/o 1.5706 1.3 1.6
CC/MCC.
037 ........... No ............ No ............ 01 SURG ...... Extracranial procedures w MCC ......... 3.0208 5.9 8.5
038 ........... No ............ No ............ 01 SURG ...... Extracranial procedures w CC ............ 1.5585 2.5 3.8
039 ........... No ............ No ............ 01 SURG ...... Extracranial procedures w/o CC/MCC 1.0057 1.5 1.8
040 ........... Yes .......... Yes .......... 01 SURG ...... Periph/cranial nerve & other nerv syst 3.9691 9.7 13.3
proc w MCC.
041 ........... Yes .......... Yes .......... 01 SURG ...... Periph/cranial nerve & other nerv syst 2.1517 5.3 7.2
proc w CC or periph neurostim.
042 ........... Yes .......... Yes .......... 01 SURG ...... Periph/cranial nerve & other nerv syst 1.6771 2.5 3.6
proc w/o CC/MCC.
052 ........... No ............ No ............ 01 MED ......... Spinal disorders & injuries w CC/MCC 1.6271 4.9 6.7
053 ........... No ............ No ............ 01 MED ......... Spinal disorders & injuries w/o CC/ 0.8617 3.2 4.0
jlentini on PROD1PC65 with PROPOSALS2
MCC.
054 ........... Yes .......... No ............ 01 MED ......... Nervous system neoplasms w MCC ... 1.5844 5.2 7.0
055 ........... Yes .......... No ............ 01 MED ......... Nervous system neoplasms w/o MCC 1.0781 3.8 5.1
056 ........... Yes .......... No ............ 01 MED ......... Degenerative nervous system dis- 1.6311 5.7 7.8
orders w MCC.
057 ........... Yes .......... No ............ 01 MED ......... Degenerative nervous system dis- 0.8755 3.9 5.0
orders w/o MCC.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23821
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
058 ........... No ............ No ............ 01 MED ......... Multiple sclerosis & cerebellar ataxia 1.5373 5.7 7.6
w MCC.
059 ........... No ............ No ............ 01 MED ......... Multiple sclerosis & cerebellar ataxia 0.9404 4.2 5.1
w CC.
060 ........... No ............ No ............ 01 MED ......... Multiple sclerosis & cerebellar ataxia 0.6978 3.4 4.0
w/o CC/MCC.
061 ........... No ............ No ............ 01 MED ......... Acute ischemic stroke w use of 2.8759 6.8 8.9
thrombolytic agent w MCC.
062 ........... No ............ No ............ 01 MED ......... Acute ischemic stroke w use of 1.9505 5.3 6.3
thrombolytic agent w CC.
063 ........... No ............ No ............ 01 MED ......... Acute ischemic stroke w use of 1.5168 3.9 4.5
thrombolytic agent w/o CC/MCC.
064 ........... Yes .......... No ............ 01 MED ......... Intracranial hemorrhage or cerebral in- 1.8446 5.5 7.5
farction w MCC.
065 ........... Yes .......... No ............ 01 MED ......... Intracranial hemorrhage or cerebral in- 1.1748 4.3 5.2
farction w CC.
066 ........... Yes .......... No ............ 01 MED ......... Intracranial hemorrhage or cerebral in- 0.8426 3.1 3.7
farction w/o CC/MCC.
067 ........... No ............ No ............ 01 MED ......... Nonspecific cva & precerebral occlu- 1.3899 4.4 5.8
sion w/o infarct w MCC.
068 ........... No ............ No ............ 01 MED ......... Nonspecific cva & precerebral occlu- 0.8449 2.7 3.4
sion w/o infarct w/o MCC.
069 ........... No ............ No ............ 01 MED ......... Transient ischemia .............................. 0.7143 2.4 3.0
070 ........... Yes .......... No ............ 01 MED ......... Nonspecific cerebrovascular disorders 1.8241 6.0 7.9
w MCC.
071 ........... Yes .......... No ............ 01 MED ......... Nonspecific cerebrovascular disorders 1.1307 4.4 5.6
w CC.
072 ........... Yes .......... No ............ 01 MED ......... Nonspecific cerebrovascular disorders 0.7629 2.8 3.5
w/o CC/MCC.
073 ........... No ............ No ............ 01 MED ......... Cranial & peripheral nerve disorders w 1.3037 4.7 6.2
MCC.
074 ........... No ............ No ............ 01 MED ......... Cranial & peripheral nerve disorders 0.8406 3.4 4.3
w/o MCC.
075 ........... No ............ No ............ 01 MED ......... Viral meningitis w CC/MCC ................. 1.6738 5.7 7.3
076 ........... No ............ No ............ 01 MED ......... Viral meningitis w/o CC/MCC .............. 0.8544 3.4 4.1
077 ........... No ............ No ............ 01 MED ......... Hypertensive encephalopathy w MCC 1.6225 5.2 6.7
078 ........... No ............ No ............ 01 MED ......... Hypertensive encephalopathy w CC ... 1.0050 3.6 4.4
079 ........... No ............ No ............ 01 MED ......... Hypertensive encephalopathy w/o CC/ 0.7377 2.8 3.4
MCC.
080 ........... No ............ No ............ 01 MED ......... Nontraumatic stupor & coma w MCC 1.1007 3.8 5.1
081 ........... No ............ No ............ 01 MED ......... Nontraumatic stupor & coma w/o 0.7094 2.7 3.5
MCC.
082 ........... No ............ No ............ 01 MED ......... Traumatic stupor & coma, coma >1 hr 2.0177 3.7 6.4
w MCC.
083 ........... No ............ No ............ 01 MED ......... Traumatic stupor & coma, coma >1 hr 1.3027 3.7 5.0
w CC.
084 ........... No ............ No ............ 01 MED ......... Traumatic stupor & coma, coma >1 hr 0.8720 2.4 3.1
w/o CC/MCC.
085 ........... Yes .......... No ............ 01 MED ......... Traumatic stupor & coma, coma <1 hr 2.0942 5.5 7.6
w MCC.
086 ........... Yes .......... No ............ 01 MED ......... Traumatic stupor & coma, coma <1 hr 1.2049 3.9 5.0
w CC.
087 ........... Yes .......... No ............ 01 MED ......... Traumatic stupor & coma, coma <1 hr 0.8008 2.6 3.3
w/o CC/MCC.
088 ........... No ............ No ............ 01 MED ......... Concussion w MCC ............................. 1.5774 4.2 5.9
089 ........... No ............ No ............ 01 MED ......... Concussion w CC ................................ 0.9162 3.0 3.8
090 ........... No ............ No ............ 01 MED ......... Concussion w/o CC/MCC ................... 0.6736 2.0 2.5
091 ........... Yes .......... No ............ 01 MED ......... Other disorders of nervous system w 1.5641 4.6 6.4
MCC.
092 ........... Yes .......... No ............ 01 MED ......... Other disorders of nervous system w 0.9195 3.5 4.5
jlentini on PROD1PC65 with PROPOSALS2
CC.
093 ........... Yes .......... No ............ 01 MED ......... Other disorders of nervous system w/ 0.6753 2.6 3.2
o CC/MCC.
094 ........... No ............ No ............ 01 MED ......... Bacterial & tuberculous infections of 3.3477 9.2 11.9
nervous system w MCC.
095 ........... No ............ No ............ 01 MED ......... Bacterial & tuberculous infections of 2.1934 6.9 8.6
nervous system w CC.
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23822 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
096 ........... No ............ No ............ 01 MED ......... Bacterial & tuberculous infections of 1.8297 5.0 6.2
nervous system w/o CC/MCC.
097 ........... No ............ No ............ 01 MED ......... Non-bacterial infect of nervous sys 3.2101 9.9 12.6
exc viral meningitis w MCC.
098 ........... No ............ No ............ 01 MED ......... Non-bacterial infect of nervous sys 1.8564 6.8 8.4
exc viral meningitis w CC.
099 ........... No ............ No ............ 01 MED ......... Non-bacterial infect of nervous sys 1.2533 4.6 5.9
exc viral meningitis w/o CC/MCC.
100 ........... Yes .......... No ............ 01 MED ......... Seizures w MCC ................................. 1.5064 4.7 6.4
101 ........... Yes .......... No ............ 01 MED ......... Seizures w/o MCC .............................. 0.7594 2.9 3.7
102 ........... No ............ No ............ 01 MED ......... Headaches w MCC ............................. 0.9594 3.3 4.5
103 ........... No ............ No ............ 01 MED ......... Headaches w/o MCC .......................... 0.6224 2.5 3.1
113 ........... No ............ No ............ 02 SURG ...... Orbital procedures w CC/MCC ........... 1.5656 3.8 5.6
114 ........... No ............ No ............ 02 SURG ...... Orbital procedures w/o CC/MCC ........ 0.8313 1.9 2.6
115 ........... No ............ No ............ 02 SURG ...... Extraocular procedures except orbit ... 1.0625 3.3 4.3
116 ........... No ............ No ............ 02 SURG ...... Intraocular procedures w CC/MCC ..... 1.1338 2.6 4.1
117 ........... No ............ No ............ 02 SURG ...... Intraocular procedures w/o CC/MCC .. 0.6699 1.6 2.2
121 ........... No ............ No ............ 02 MED ......... Acute major eye infections w CC/MCC 0.9556 4.4 5.5
122 ........... No ............ No ............ 02 MED ......... Acute major eye infections w/o CC/ 0.6127 3.4 4.0
MCC.
123 ........... No ............ No ............ 02 MED ......... Neurological eye disorders .................. 0.6840 2.3 2.9
124 ........... No ............ No ............ 02 MED ......... Other disorders of the eye w MCC ..... 1.0620 3.9 5.3
125 ........... No ............ No ............ 02 MED ......... Other disorders of the eye w/o MCC .. 0.6660 2.8 3.5
129 ........... No ............ No ............ 03 SURG ...... Major head & neck procedures w CC/ 2.0147 3.7 5.2
MCC or major device.
130 ........... No ............ No ............ 03 SURG ...... Major head & neck procedures w/o 1.1588 2.4 2.9
CC/MCC.
131 ........... No ............ No ............ 03 SURG ...... Cranial/facial procedures w CC/MCC 1.9768 4.0 5.7
132 ........... No ............ No ............ 03 SURG ...... Cranial/facial procedures w/o CC/ 1.1041 2.1 2.7
MCC.
133 ........... No ............ No ............ 03 SURG ...... Other ear, nose, mouth & throat O.R. 1.5491 3.6 5.3
procedures w CC/MCC.
134 ........... No ............ No ............ 03 SURG ...... Other ear, nose, mouth & throat O.R. 0.8243 1.7 2.2
procedures w/o CC/MCC.
135 ........... No ............ No ............ 03 SURG ...... Sinus & mastoid procedures w CC/ 1.6842 3.8 5.8
MCC.
136 ........... No ............ No ............ 03 SURG ...... Sinus & mastoid procedures w/o CC/ 0.9023 1.7 2.3
MCC.
137 ........... No ............ No ............ 03 SURG ...... Mouth procedures w CC/MCC ............ 1.2668 3.8 5.4
138 ........... No ............ No ............ 03 SURG ...... Mouth procedures w/o CC/MCC ......... 0.7368 1.9 2.5
139 ........... No ............ No ............ 03 SURG ...... Salivary gland procedures ................... 0.8176 1.4 1.8
146 ........... No ............ No ............ 03 MED ......... Ear, nose, mouth & throat malignancy 2.0489 6.7 9.4
w MCC.
147 ........... No ............ No ............ 03 MED ......... Ear, nose, mouth & throat malignancy 1.2486 4.3 6.1
w CC.
148 ........... No ............ No ............ 03 MED ......... Ear, nose, mouth & throat malignancy 0.8181 2.7 3.8
w/o CC/MCC.
149 ........... No ............ No ............ 03 MED ......... Dysequilibrium ..................................... 0.6086 2.2 2.7
150 ........... No ............ No ............ 03 MED ......... Epistaxis w MCC ................................. 1.2243 3.7 5.2
151 ........... No ............ No ............ 03 MED ......... Epistaxis w/o MCC .............................. 0.6018 2.3 2.9
152 ........... No ............ No ............ 03 MED ......... Otitis media & URI w MCC ................. 0.8976 3.4 4.5
153 ........... No ............ No ............ 03 MED ......... Otitis media & URI w/o MCC .............. 0.5948 2.6 3.2
154 ........... No ............ No ............ 03 MED ......... Other ear, nose, mouth & throat diag- 1.3768 4.6 6.3
noses w MCC.
155 ........... No ............ No ............ 03 MED ......... Other ear, nose, mouth & throat diag- 0.8779 3.5 4.4
noses w CC.
156 ........... No ............ No ............ 03 MED ......... Other ear, nose, mouth & throat diag- 0.6306 2.5 3.2
noses w/o CC/MCC.
157 ........... No ............ No ............ 03 MED ......... Dental & oral diseases w MCC ........... 1.4793 4.7 6.7
jlentini on PROD1PC65 with PROPOSALS2
158 ........... No ............ No ............ 03 MED ......... Dental & oral diseases w CC .............. 0.8615 3.4 4.5
159 ........... No ............ No ............ 03 MED ......... Dental & oral diseases w/o CC/MCC .. 0.5952 2.4 3.1
163 ........... Yes .......... No ............ 04 SURG ...... Major chest procedures w MCC ......... 4.9951 12.2 14.9
164 ........... Yes .......... No ............ 04 SURG ...... Major chest procedures w CC ............ 2.5982 6.7 8.1
165 ........... Yes .......... No ............ 04 SURG ...... Major chest procedures w/o CC/MCC 1.8086 4.3 5.1
166 ........... Yes .......... No ............ 04 SURG ...... Other resp system O.R. procedures w 3.6865 10.0 12.9
MCC.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23823
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
167 ........... Yes .......... No ............ 04 SURG ...... Other resp system O.R. procedures w 2.0256 6.3 8.0
CC.
168 ........... Yes .......... No ............ 04 SURG ...... Other resp system O.R. procedures 1.3443 3.9 5.3
w/o CC/MCC.
175 ........... Yes .......... No ............ 04 MED ......... Pulmonary embolism w MCC .............. 1.5777 6.0 7.3
176 ........... Yes .......... No ............ 04 MED ......... Pulmonary embolism w/o MCC ........... 1.0696 4.6 5.3
177 ........... Yes .......... No ............ 04 MED ......... Respiratory infections & inflammations 2.0391 7.2 9.1
w MCC.
178 ........... Yes .......... No ............ 04 MED ......... Respiratory infections & inflammations 1.4979 6.0 7.4
w CC.
179 ........... Yes .......... No ............ 04 MED ......... Respiratory infections & inflammations 1.0409 4.6 5.6
w/o CC/MCC.
180 ........... No ............ No ............ 04 MED ......... Respiratory neoplasms w MCC .......... 1.6938 6.0 7.9
181 ........... No ............ No ............ 04 MED ......... Respiratory neoplasms w CC ............. 1.2293 4.5 5.9
182 ........... No ............ No ............ 04 MED ......... Respiratory neoplasms w/o CC/MCC 0.8712 3.2 4.2
183 ........... No ............ No ............ 04 MED ......... Major chest trauma w MCC ................ 1.5304 5.8 7.2
184 ........... No ............ No ............ 04 MED ......... Major chest trauma w CC ................... 0.9405 3.8 4.6
185 ........... No ............ No ............ 04 MED ......... Major chest trauma w/o CC/MCC ....... 0.6755 2.9 3.4
186 ........... Yes .......... No ............ 04 MED ......... Pleural effusion w MCC ...................... 1.6200 5.7 7.4
187 ........... Yes .......... No ............ 04 MED ......... Pleural effusion w CC ......................... 1.0940 4.1 5.3
188 ........... Yes .......... No ............ 04 MED ......... Pleural effusion w/o CC/MCC ............. 0.8121 3.1 4.0
189 ........... No ............ No ............ 04 MED ......... Pulmonary edema & respiratory failure 1.3473 4.8 6.1
190 ........... Yes .......... No ............ 04 MED ......... Chronic obstructive pulmonary dis- 1.3004 5.0 6.3
ease w MCC.
191 ........... Yes .......... No ............ 04 MED ......... Chronic obstructive pulmonary dis- 0.9734 4.1 5.0
ease w CC.
192 ........... Yes .......... No ............ 04 MED ......... Chronic obstructive pulmonary dis- 0.7239 3.3 4.0
ease w/o CC/MCC.
193 ........... Yes .......... No ............ 04 MED ......... Simple pneumonia & pleurisy w MCC 1.4303 5.4 6.8
194 ........... Yes .......... No ............ 04 MED ......... Simple pneumonia & pleurisy w CC ... 1.0041 4.4 5.3
195 ........... Yes .......... No ............ 04 MED ......... Simple pneumonia & pleurisy w/o CC/ 0.7301 3.5 4.1
MCC.
196 ........... Yes .......... No ............ 04 MED ......... Interstitial lung disease w MCC .......... 1.6006 5.9 7.4
197 ........... Yes .......... No ............ 04 MED ......... Interstitial lung disease w CC ............. 1.0973 4.4 5.4
198 ........... Yes .......... No ............ 04 MED ......... Interstitial lung disease w/o CC/MCC 0.8158 3.3 4.1
199 ........... No ............ No ............ 04 MED ......... Pneumothorax w MCC ........................ 1.7383 6.4 8.3
200 ........... No ............ No ............ 04 MED ......... Pneumothorax w CC ........................... 1.0118 3.9 5.1
201 ........... No ............ No ............ 04 MED ......... Pneumothorax w/o CC/MCC ............... 0.7399 3.1 4.1
202 ........... No ............ No ............ 04 MED ......... Bronchitis & asthma w CC/MCC ......... 0.8135 3.5 4.4
203 ........... No ............ No ............ 04 MED ......... Bronchitis & asthma w/o CC/MCC ...... 0.5938 2.8 3.4
204 ........... No ............ No ............ 04 MED ......... Respiratory signs & symptoms ........... 0.6533 2.2 2.9
205 ........... Yes .......... No ............ 04 MED ......... Other respiratory system diagnoses w 1.2427 4.0 5.5
MCC.
206 ........... Yes .......... No ............ 04 MED ......... Other respiratory system diagnoses w/ 0.7266 2.7 3.4
o MCC.
207 ........... Yes .......... No ............ 04 MED ......... Respiratory system diagnosis w venti- 5.1153 12.8 15.1
lator support 96+ hours.
208 ........... No ............ No ............ 04 MED ......... Respiratory system diagnosis w venti- 2.1827 5.2 7.2
lator support <96 hours.
215 ........... No ............ No ............ 05 SURG ...... Other heart assist system implant ...... 12.3351 7.8 14.2
216 ........... Yes .......... No ............ 05 SURG ...... Cardiac valve & oth maj 1..1072 15.7 18.4
cardiothoracic proc w card cath w
MCC.
217 ........... Yes .......... No ............ 05 SURG ...... Cardiac valve & oth maj 7.0028 10.9 12.3
cardiothoracic proc w card cath w
CC.
218 ........... Yes .......... No ............ 05 SURG ...... Cardiac valve & oth maj 5.4355 8.4 9.1
cardiothoracic proc w card cath w/o
jlentini on PROD1PC65 with PROPOSALS2
CC/MCC.
219 ........... Yes .......... Yes .......... 05 SURG ...... Cardiac valve & oth maj 8.0764 11.5 14.0
cardiothoracic proc w/o card cath w
MCC.
220 ........... Yes .......... Yes .......... 05 SURG ...... Cardiac valve & oth maj 5.3066 7.7 8.6
cardiothoracic proc w/o card cath w
CC.
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00297 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23824 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
221 ........... Yes .......... Yes .......... 05 SURG ...... Cardiac valve & oth maj 4.4089 6.0 6.4
cardiothoracic proc w/o card cath w/
o CC/MCC.
222 ........... No ............ No ............ 05 SURG ...... Cardiac defib implant w cardiac cath 8.6586 10.7 13.1
w AMI/HF/shock w MCC.
223 ........... No ............ No ............ 05 SURG ...... Cardiac defib implant w cardiac cath 6.3035 4.6 6.3
w AMI/HF/shock w/o MCC.
224 ........... No ............ No ............ 05 SURG ...... Cardiac defib implant w cardiac cath 7.9767 9.2 11.4
w/o AMI/HF/shock w MCC.
225 ........... No ............ No ............ 05 SURG ...... Cardiac defib implant w cardiac cath 5.9123 4.5 5.6
w/o AMI/HF/shock w/o MCC.
226 ........... No ............ No ............ 05 SURG ...... Cardiac defibrillator implant w/o car- 6.7278 6.2 9.3
diac cath w MCC.
227 ........... No ............ No ............ 05 SURG ...... Cardiac defibrillator implant w/o car- 5.0145 1.8 2.8
diac cath w/o MCC.
228 ........... Yes .......... No ............ 05 SURG ...... Other cardiothoracic procedures w 7.8191 12.1 14.7
MCC.
229 ........... Yes .......... No ............ 05 SURG ...... Other cardiothoracic procedures w CC 5.0358 7.9 9.1
230 ........... Yes .......... No ............ 05 SURG ...... Other cardiothoracic procedures w/o 4.0677 5.6 6.5
CC/MCC.
231 ........... No ............ No ............ 05 SURG ...... Coronary bypass w PTCA w MCC ..... 7.6801 11.2 13.3
232 ........... No ............ No ............ 05 SURG ...... Coronary bypass w PTCA w/o MCC .. 5.5460 8.3 9.2
233 ........... Yes .......... No ............ 05 SURG ...... Coronary bypass w cardiac cath w 7.0378 12.4 14.2
MCC.
234 ........... Yes .......... No ............ 05 SURG ...... Coronary bypass w cardiac cath w/o 4.6193 8.3 8.9
MCC.
235 ........... Yes .......... No ............ 05 SURG ...... Coronary bypass w/o cardiac cath w 5.6992 9.5 11.2
MCC.
236 ........... Yes .......... No ............ 05 SURG ...... Coronary bypass w/o cardiac cath w/o 3.6122 6.1 6.6
MCC.
237 ........... No ............ No ............ 05 SURG ...... Major cardiovasc procedures w MCC 5.0881 7.5 10.8
or thoracic aortic aneurysm repair.
238 ........... No ............ No ............ 05 SURG ...... Major cardiovasc procedures w/o 2.8962 3.2 4.6
MCC.
239 ........... Yes .......... No ............ 05 SURG ...... Amputation for circ sys disorders exc 4.4798 12.0 15.3
upper limb & toe w MCC.
240 ........... Yes .......... No ............ 05 SURG ...... Amputation for circ sys disorders exc 2.6706 8.3 10.4
upper limb & toe w CC.
241 ........... Yes .......... No ............ 05 SURG ...... Amputation for circ sys disorders exc 1.5740 5.6 6.8
upper limb & toe w/o CC/MCC.
242 ........... Yes .......... No ............ 05 SURG ...... Permanent cardiac pacemaker implant 3.7041 6.7 8.8
w MCC.
243 ........... Yes .......... No ............ 05 SURG ...... Permanent cardiac pacemaker implant 2.5934 3.8 5.1
w CC.
244 ........... Yes .......... No ............ 05 SURG ...... Permanent cardiac pacemaker implant 2.0098 2.2 2.9
w/o CC/MCC.
245 ........... No ............ No ............ 05 SURG ...... AICD generator procedures ................ 4.0022 2.1 3.2
246 ........... No ............ No ............ 05 SURG ...... Perc cardiovasc proc w drug-eluting 3.1498 3.6 5.3
stent w MCC or 4+ vessels/stents.
247 ........... No ............ No ............ 05 SURG ...... Perc cardiovasc proc w drug-eluting 1.9134 1.7 2.2
stent w/o MCC.
248 ........... No ............ No ............ 05 SURG ...... Perc cardiovasc proc w non-drug- 2.8065 4.2 6.0
eluting stent w MCC or 4+ ves/
stents.
249 ........... No ............ No ............ 05 SURG ...... Perc cardiovasc proc w non-drug- 1.6397 1.9 2.5
eluting stent w/o MCC.
250 ........... No ............ No ............ 05 SURG ...... Perc cardiovasc proc w/o coronary ar- 2.9923 5.4 7.8
tery stent w MCC.
251 ........... No ............ No ............ 05 SURG ...... Perc cardiovasc proc w/o coronary ar- 1.6023 2.1 2.8
jlentini on PROD1PC65 with PROPOSALS2
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00298 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23825
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
256 ........... Yes .......... No ............ 05 SURG ...... Upper limb & toe amputation for circ 1.5895 5.8 7.5
system disorders w CC.
257 ........... Yes .......... No ............ 05 SURG ...... Upper limb & toe amputation for circ 1.0216 3.6 4.8
system disorders w/o CC/MCC.
258 ........... No ............ No ............ 05 SURG ...... Cardiac pacemaker device replace- 2.8434 5.4 7.4
ment w MCC.
259 ........... No ............ No ............ 05 SURG ...... Cardiac pacemaker device replace- 1.6944 2.0 2.8
ment w/o MCC.
260 ........... No ............ No ............ 05 SURG ...... Cardiac pacemaker revision except 3.4221 8.1 11.2
device replacement w MCC.
261 ........... No ............ No ............ 05 SURG ...... Cardiac pacemaker revision except 1.4398 3.0 4.2
device replacement w CC.
262 ........... No ............ No ............ 05 SURG ...... Cardiac pacemaker revision except 1.0173 2.0 2.6
device replacement w/o CC/MCC.
263 ........... No ............ No ............ 05 SURG ...... Vein ligation & stripping ...................... 1.5392 3.4 5.4
264 ........... Yes .......... No ............ 05 SURG ...... Other circulatory system O.R. proce- 2.5265 5.8 8.9
dures.
265 ........... No ............ No ............ 05 SURG ...... AICD lead procedures ......................... 2.2140 2.2 3.5
280 ........... Yes .......... No ............ 05 MED ......... Acute myocardial infarction, dis- 1.9395 5.8 7.3
charged alive w MCC.
281 ........... Yes .......... No ............ 05 MED ......... Acute myocardial infarction, dis- 1.2210 3.9 4.8
charged alive w CC.
282 ........... Yes .......... No ............ 05 MED ......... Acute myocardial infarction, dis- 0.8698 2.6 3.2
charged alive w/o CC/MCC.
283 ........... No ............ No ............ 05 MED ......... Acute myocardial infarction, expired w 1.6979 3.4 5.5
MCC.
284 ........... No ............ No ............ 05 MED ......... Acute myocardial infarction, expired w 0.9130 2.2 3.2
CC.
285 ........... No ............ No ............ 05 MED ......... Acute myocardial infarction, expired 0.6059 1.7 2.2
w/o CC/MCC.
286 ........... No ............ No ............ 05 MED ......... Circulatory disorders except AMI, w 1.9745 5.2 6.9
card cath w MCC.
287 ........... No ............ No ............ 05 MED ......... Circulatory disorders except AMI, w 1.0225 2.4 3.1
card cath w/o MCC.
288 ........... Yes .......... No ............ 05 MED ......... Acute & subacute endocarditis w 3.0720 9.2 11.8
MCC.
289 ........... Yes .......... No ............ 05 MED ......... Acute & subacute endocarditis w CC 1.9524 7.0 8.7
290 ........... Yes .......... No ............ 05 MED ......... Acute & subacute endocarditis w/o 1.4507 5.2 6.5
CC/MCC.
291 ........... Yes .......... No ............ 05 MED ......... Heart failure & shock w MCC ............. 1.4576 5.0 6.5
292 ........... Yes .......... No ............ 05 MED ......... Heart failure & shock w CC ................ 1.0053 4.1 5.0
293 ........... Yes .......... No ............ 05 MED ......... Heart failure & shock w/o CC/MCC .... 0.7205 3.1 3.7
294 ........... No ............ No ............ 05 MED ......... Deep vein thrombophlebitis w CC/ 0.9564 4.6 5.5
MCC.
295 ........... No ............ No ............ 05 MED ......... Deep vein thrombophlebitis w/o CC/ 0.6347 3.7 4.3
MCC.
296 ........... No ............ No ............ 05 MED ......... Cardiac arrest, unexplained w MCC ... 1.1910 1.9 3.0
297 ........... No ............ No ............ 05 MED ......... Cardiac arrest, unexplained w CC ...... 0.6502 1.4 1.8
298 ........... No ............ No ............ 05 MED ......... Cardiac arrest, unexplained w/o CC/ 0.4438 1.1 1.3
MCC.
299 ........... Yes .......... No ............ 05 MED ......... Peripheral vascular disorders w MCC 1.4326 5.0 6.7
300 ........... Yes .......... No ............ 05 MED ......... Peripheral vascular disorders w CC ... 0.9245 4.1 5.0
301 ........... Yes .......... No ............ 05 MED ......... Peripheral vascular disorders w/o CC/ 0.6580 3.0 3.7
MCC.
302 ........... No ............ No ............ 05 MED ......... Atherosclerosis w MCC ....................... 1.0307 3.2 4.4
303 ........... No ............ No ............ 05 MED ......... Atherosclerosis w/o MCC .................... 0.5666 2.0 2.5
304 ........... No ............ No ............ 05 MED ......... Hypertension w MCC .......................... 1.0808 3.9 5.2
305 ........... No ............ No ............ 05 MED ......... Hypertension w/o MCC ....................... 0.5900 2.3 2.9
306 ........... No ............ No ............ 05 MED ......... Cardiac congenital & valvular dis- 1.5655 4.4 6.3
jlentini on PROD1PC65 with PROPOSALS2
orders w MCC.
307 ........... No ............ No ............ 05 MED ......... Cardiac congenital & valvular dis- 0.7476 2.7 3.4
orders w/o MCC.
308 ........... No ............ No ............ 05 MED ......... Cardiac arrhythmia & conduction dis- 1.2981 4.1 5.5
orders w MCC.
309 ........... No ............ No ............ 05 MED ......... Cardiac arrhythmia & conduction dis- 0.8320 3.1 3.9
orders w CC.
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00299 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23826 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
310 ........... No ............ No ............ 05 MED ......... Cardiac arrhythmia & conduction dis- 0.5829 2.3 2.8
orders w/o CC/MCC.
311 ........... No ............ No ............ 05 MED ......... Angina pectoris .................................... 0.4969 1.9 2.3
312 ........... No ............ No ............ 05 MED ......... Syncope & collapse ............................. 0.7082 2.5 3.1
313 ........... No ............ No ............ 05 MED ......... Chest pain ........................................... 0.5312 1.7 2.1
314 ........... Yes .......... No ............ 05 MED ......... Other circulatory system diagnoses w 1.7517 5.0 7.0
MCC.
315 ........... Yes .......... No ............ 05 MED ......... Other circulatory system diagnoses w 0.9922 3.5 4.6
CC.
316 ........... Yes .......... No ............ 05 MED ......... Other circulatory system diagnoses w/ 0.6513 2.4 3.0
o CC/MCC.
326 ........... Yes .......... No ............ 06 SURG ...... Stomach, esophageal & duodenal 5.8025 13.2 17.1
proc w MCC.
327 ........... Yes .......... No ............ 06 SURG ...... Stomach, esophageal & duodenal 2.8389 7.8 10.1
proc w CC.
328 ........... Yes .......... No ............ 06 SURG ...... Stomach, esophageal & duodenal 1.4576 3.2 4.4
proc w/o CC/MCC.
329 ........... Yes .......... No ............ 06 SURG ...... Major small & large bowel procedures 5.1793 12.8 16.0
w MCC.
330 ........... Yes .......... No ............ 06 SURG ...... Major small & large bowel procedures 2.5644 8.3 9.7
w CC.
331 ........... Yes .......... No ............ 06 SURG ...... Major small & large bowel procedures 1.6250 5.2 5.9
w/o CC/MCC.
332 ........... Yes .......... No ............ 06 SURG ...... Rectal resection w MCC ..................... 4.5358 12.0 14.3
333 ........... Yes .......... No ............ 06 SURG ...... Rectal resection w CC ........................ 2.4487 7.7 8.8
334 ........... Yes .......... No ............ 06 SURG ...... Rectal resection w/o CC/MCC ............ 1.6247 4.7 5.5
335 ........... Yes .......... No ............ 06 SURG ...... Peritoneal adhesiolysis w MCC .......... 4.0903 11.6 14.1
336 ........... Yes .......... No ............ 06 SURG ...... Peritoneal adhesiolysis w CC ............. 2.2387 7.5 9.1
337 ........... Yes .......... No ............ 06 SURG ...... Peritoneal adhesiolysis w/o CC/MCC 1.4519 4.4 5.6
338 ........... No ............ No ............ 06 SURG ...... Appendectomy w complicated prin- 3.1787 8.8 10.7
cipal diag w MCC.
339 ........... No ............ No ............ 06 SURG ...... Appendectomy w complicated prin- 1.8625 6.0 7.0
cipal diag w CC.
340 ........... No ............ No ............ 06 SURG ...... Appendectomy w complicated prin- 1.2267 3.5 4.2
cipal diag w/o CC/MCC.
341 ........... No ............ No ............ 06 SURG ...... Appendectomy w/o complicated prin- 2.1659 5.3 7.1
cipal diag w MCC.
342 ........... No ............ No ............ 06 SURG ...... Appendectomy w/o complicated prin- 1.3154 3.2 4.1
cipal diag w CC.
343 ........... No ............ No ............ 06 SURG ...... Appendectomy w/o complicated prin- 0.9067 1.8 2.2
cipal diag w/o CC/MCC.
344 ........... No ............ No ............ 06 SURG ...... Minor small & large bowel procedures 3.0822 9.2 11.8
w MCC.
345 ........... No ............ No ............ 06 SURG ...... Minor small & large bowel procedures 1.6391 6.2 7.2
w CC.
346 ........... No ............ No ............ 06 SURG ...... Minor small & large bowel procedures 1.1869 4.4 4.9
w/o CC/MCC.
347 ........... No ............ No ............ 06 SURG ...... Anal & stomal procedures w MCC ...... 2.1823 6.4 8.8
348 ........... No ............ No ............ 06 SURG ...... Anal & stomal procedures w CC ......... 1.2860 4.4 5.7
349 ........... No ............ No ............ 06 SURG ...... Anal & stomal procedures w/o CC/ 0.7681 2.4 3.1
MCC.
350 ........... No ............ No ............ 06 SURG ...... Inguinal & femoral hernia procedures 2.2486 5.8 8.0
w MCC.
351 ........... No ............ No ............ 06 SURG ...... Inguinal & femoral hernia procedures 1.2638 3.4 4.6
w CC.
352 ........... No ............ No ............ 06 SURG ...... Inguinal & femoral hernia procedures 0.8131 2.0 2.5
w/o CC/MCC.
353 ........... No ............ No ............ 06 SURG ...... Hernia procedures except inguinal & 2.4935 6.4 8.4
femoral w MCC.
354 ........... No ............ No ............ 06 SURG ...... Hernia procedures except inguinal & 1.4046 4.0 5.1
jlentini on PROD1PC65 with PROPOSALS2
femoral w CC.
355 ........... No ............ No ............ 06 SURG ...... Hernia procedures except inguinal & 0.9675 2.4 2.9
femoral w/o CC/MCC.
356 ........... Yes .......... No ............ 06 SURG ...... Other digestive system O.R. proce- 3.8574 9.5 12.9
dures w MCC.
357 ........... Yes .......... No ............ 06 SURG ...... Other digestive system O.R. proce- 2.1703 6.2 8.1
dures w CC.
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00300 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23827
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
358 ........... Yes .......... No ............ 06 SURG ...... Other digestive system O.R. proce- 1.3493 3.3 4.5
dures w/o CC/MCC.
368 ........... No ............ No ............ 06 MED ......... Major esophageal disorders w MCC ... 1.6184 5.1 6.6
369 ........... No ............ No ............ 06 MED ......... Major esophageal disorders w CC ...... 1.0703 3.8 4.7
370 ........... No ............ No ............ 06 MED ......... Major esophageal disorders w/o CC/ 0.7835 2.8 3.4
MCC.
371 ........... Yes .......... No ............ 06 MED ......... Major gastrointestinal disorders & 1.9062 6.7 8.7
peritoneal infections w MCC.
372 ........... Yes .......... No ............ 06 MED ......... Major gastrointestinal disorders & 1.3025 5.6 6.9
peritoneal infections w CC.
373 ........... Yes .......... No ............ 06 MED ......... Major gastrointestinal disorders & 0.8646 4.2 4.9
peritoneal infections w/o CC/MCC.
374 ........... Yes .......... No ............ 06 MED ......... Digestive malignancy w MCC ............. 1.9057 6.3 8.6
375 ........... Yes .......... No ............ 06 MED ......... Digestive malignancy w CC ................ 1.2523 4.6 6.0
376 ........... Yes .......... No ............ 06 MED ......... Digestive malignancy w/o CC/MCC .... 0.8820 3.2 4.2
377 ........... Yes .......... No ............ 06 MED ......... G.I. hemorrhage w MCC ..................... 1.6069 4.9 6.4
378 ........... Yes .......... No ............ 06 MED ......... G.I. hemorrhage w CC ........................ 1.0048 3.7 4.4
379 ........... Yes .......... No ............ 06 MED ......... G.I. hemorrhage w/o CC/MCC ............ 0.7567 2.9 3.4
380 ........... Yes .......... No ............ 06 MED ......... Complicated peptic ulcer w MCC ........ 1.7995 5.6 7.3
381 ........... Yes .......... No ............ 06 MED ......... Complicated peptic ulcer w CC ........... 1.1138 4.2 5.2
382 ........... Yes .......... No ............ 06 MED ......... Complicated peptic ulcer w/o CC/MCC 0.8208 3.1 3.7
383 ........... No ............ No ............ 06 MED ......... Uncomplicated peptic ulcer w MCC .... 1.1789 4.4 5.5
384 ........... No ............ No ............ 06 MED ......... Uncomplicated peptic ulcer w/o MCC 0.7818 3.1 3.7
385 ........... No ............ No ............ 06 MED ......... Inflammatory bowel disease w MCC .. 1.8541 6.5 8.8
386 ........... No ............ No ............ 06 MED ......... Inflammatory bowel disease w CC ..... 1.0601 4.5 5.7
387 ........... No ............ No ............ 06 MED ......... Inflammatory bowel disease w/o CC/ 0.7746 3.5 4.3
MCC.
388 ........... Yes .......... No ............ 06 MED ......... G.I. obstruction w MCC ....................... 1.5392 5.5 7.3
389 ........... Yes .......... No ............ 06 MED ......... G.I. obstruction w CC .......................... 0.9244 4.0 5.0
390 ........... Yes .......... No ............ 06 MED ......... G.I. obstruction w/o CC/MCC .............. 0.6333 3.0 3.6
391 ........... No ............ No ............ 06 MED ......... Esophagitis, gastroent & misc digest 1.0810 3.9 5.2
disorders w MCC.
392 ........... No ............ No ............ 06 MED ......... Esophagitis, gastroent & misc digest 0.6685 2.8 3.5
disorders w/o MCC.
393 ........... No ............ No ............ 06 MED ......... Other digestive system diagnoses w 1.5367 4.9 6.9
MCC.
394 ........... No ............ No ............ 06 MED ......... Other digestive system diagnoses w 0.9489 3.8 4.8
CC.
395 ........... No ............ No ............ 06 MED ......... Other digestive system diagnoses w/o 0.6745 2.6 3.3
CC/MCC.
405 ........... Yes .......... No ............ 07 SURG ...... Pancreas, liver & shunt procedures w 5.6481 12.4 17.0
MCC.
406 ........... Yes .......... No ............ 07 SURG ...... Pancreas, liver & shunt procedures w 2.7895 7.0 9.2
CC.
407 ........... Yes .......... No ............ 07 SURG ...... Pancreas, liver & shunt procedures w/ 1.8411 4.2 5.5
o CC/MCC.
408 ........... No ............ No ............ 07 SURG ...... Biliary tract proc except only cholecyst 4.2539 12.1 15.0
w or w/o c.d.e. w MCC.
409 ........... No ............ No ............ 07 SURG ...... Biliary tract proc except only cholecyst 2.5819 8.3 9.8
w or w/o c.d.e. w CC.
410 ........... No ............ No ............ 07 SURG ...... Biliary tract proc except only cholecyst 1.6374 5.4 6.5
w or w/o c.d.e. w/o CC/MCC.
411 ........... No ............ No ............ 07 SURG ...... Cholecystectomy w c.d.e. w MCC ...... 3.7602 10.4 12.4
412 ........... No ............ No ............ 07 SURG ...... Cholecystectomy w c.d.e. w CC ......... 2.3633 7.5 8.6
413 ........... No ............ No ............ 07 SURG ...... Cholecystectomy w c.d.e. w/o CC/ 1.6896 5.0 5.9
MCC.
414 ........... Yes .......... No ............ 07 SURG ...... Cholecystectomy except by 3.5777 9.7 11.7
laparoscope w/o c.d.e. w MCC.
415 ........... Yes .......... No ............ 07 SURG ...... Cholecystectomy except by 2.0372 6.5 7.6
laparoscope w/o c.d.e. w CC.
jlentini on PROD1PC65 with PROPOSALS2
416 ........... Yes .......... No ............ 07 SURG ...... Cholecystectomy except by 1.3290 4.1 4.8
laparoscope w/o c.d.e. w/o CC/
MCC.
417 ........... No ............ No ............ 07 SURG ...... Laparoscopic cholecystectomy w/o 2.4851 6.5 8.4
c.d.e. w MCC.
418 ........... No ............ No ............ 07 SURG ...... Laparoscopic cholecystectomy w/o 1.6541 4.5 5.6
c.d.e. w CC.
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00301 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23828 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
419 ........... No ............ No ............ 07 SURG ...... Laparoscopic cholecystectomy w/o 1.1296 2.5 3.2
c.d.e. w/o CC/MCC.
420 ........... No ............ No ............ 07 SURG ...... Hepatobiliary diagnostic procedures w 4.0976 9.9 13.7
MCC.
421 ........... No ............ No ............ 07 SURG ...... Hepatobiliary diagnostic procedures w 1.8978 5.6 7.7
CC.
422 ........... No ............ No ............ 07 SURG ...... Hepatobiliary diagnostic procedures 1.2275 3.2 4.4
w/o CC/MCC.
423 ........... No ............ No ............ 07 SURG ...... Other hepatobiliary or pancreas O.R. 4.5535 11.8 15.9
procedures w MCC.
424 ........... No ............ No ............ 07 SURG ...... Other hepatobiliary or pancreas O.R. 2.5159 7.9 10.4
procedures w CC.
425 ........... No ............ No ............ 07 SURG ...... Other hepatobiliary or pancreas O.R. 1.3760 4.0 5.4
procedures w/o CC/MCC.
432 ........... No ............ No ............ 07 MED ......... Cirrhosis & alcoholic hepatitis w MCC 1.6776 5.2 7.0
433 ........... No ............ No ............ 07 MED ......... Cirrhosis & alcoholic hepatitis w CC ... 0.9378 3.8 4.9
434 ........... No ............ No ............ 07 MED ......... Cirrhosis & alcoholic hepatitis w/o CC/ 0.6551 2.9 3.7
MCC.
435 ........... No ............ No ............ 07 MED ......... Malignancy of hepatobiliary system or 1.7117 5.7 7.6
pancreas w MCC.
436 ........... No ............ No ............ 07 MED ......... Malignancy of hepatobiliary system or 1.1892 4.5 5.8
pancreas w CC.
437 ........... No ............ No ............ 07 MED ......... Malignancy of hepatobiliary system or 0.9506 3.2 4.3
pancreas w/o CC/MCC.
438 ........... No ............ No ............ 07 MED ......... Disorders of pancreas except malig- 1.6992 5.5 7.5
nancy w MCC.
439 ........... No ............ No ............ 07 MED ......... Disorders of pancreas except malig- 1.0223 4.2 5.3
nancy w CC.
440 ........... No ............ No ............ 07 MED ......... Disorders of pancreas except malig- 0.6963 3.2 3.8
nancy w/o CC/MCC.
441 ........... Yes .......... No ............ 07 MED ......... Disorders of liver except malig, cirr, 1.6580 5.1 7.0
alc hepa w MCC.
442 ........... Yes .......... No ............ 07 MED ......... Disorders of liver except malig, cirr, 0.9825 3.9 5.1
alc hepa w CC.
443 ........... Yes .......... No ............ 07 MED ......... Disorders of liver except malig, cirr, 0.6945 3.0 3.8
alc hepa w/o CC/MCC.
444 ........... No ............ No ............ 07 MED ......... Disorders of the biliary tract w MCC ... 1.5579 5.0 6.6
445 ........... No ............ No ............ 07 MED ......... Disorders of the biliary tract w CC ...... 1.0375 3.8 4.7
446 ........... No ............ No ............ 07 MED ......... Disorders of the biliary tract w/o CC/ 0.7225 2.6 3.3
MCC.
453 ........... No ............ No ............ 08 SURG ...... Combined anterior/posterior spinal fu- 9.8724 12.0 15.7
sion w MCC.
454 ........... No ............ No ............ 08 SURG ...... Combined anterior/posterior spinal fu- 7.0370 6.5 8.0
sion w CC.
455 ........... No ............ No ............ 08 SURG ...... Combined anterior/posterior spinal fu- 5.1744 3.7 4.4
sion w/o CC/MCC.
456 ........... No ............ No ............ 08 SURG ...... Spinal fus exc cerv w spinal curv/ 8.5225 11.6 14.7
malig/infec or 9+ fus w MCC.
457 ........... No ............ No ............ 08 SURG ...... Spinal fus exc cerv w spinal curv/ 5.6672 6.2 7.5
malig/infec or 9+ fus w CC.
458 ........... No ............ No ............ 08 SURG ...... Spinal fus exc cerv w spinal curv/ 4.7056 4.0 4.5
malig/infec or 9+ fus w/o CC/MCC.
459 ........... Yes .......... No ............ 08 SURG ...... Spinal fusion except cervical w MCC 5.9847 7.6 9.4
460 ........... Yes .......... No ............ 08 SURG ...... Spinal fusion except cervical w/o MCC 3.5746 3.6 4.2
461 ........... No ............ No ............ 08 SURG ...... Bilateral or multiple major joint procs 4.5636 6.8 8.4
of lower extremity w MCC.
462 ........... No ............ No ............ 08 SURG ...... Bilateral or multiple major joint procs 3.1564 3.9 4.2
of lower extremity w/o MCC.
463 ........... Yes .......... No ............ 08 SURG ...... Wnd debrid & skn grft exc hand, for 4.6669 12.0 16.6
jlentini on PROD1PC65 with PROPOSALS2
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00302 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23829
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
467 ........... Yes .......... No ............ 08 SURG ...... Revision of hip or knee replacement w 3.0720 4.8 5.5
CC.
468 ........... Yes .......... No ............ 08 SURG ...... Revision of hip or knee replacement 2.4597 3.6 3.9
w/o CC/MCC.
469 ........... Yes .......... No ............ 08 SURG ...... Major joint replacement or reattach- 3.2979 6.9 8.2
ment of lower extremity w MCC.
470 ........... Yes .......... No ............ 08 SURG ...... Major joint replacement or reattach- 2.0144 3.6 3.9
ment of lower extremity w/o MCC.
471 ........... No ............ No ............ 08 SURG ...... Cervical spinal fusion w MCC ............. 4.4277 7.0 9.8
472 ........... No ............ No ............ 08 SURG ...... Cervical spinal fusion w CC ................ 2.6200 2.8 4.1
473 ........... No ............ No ............ 08 SURG ...... Cervical spinal fusion w/o CC/MCC .... 1.9213 1.6 2.0
474 ........... Yes .......... No ............ 08 SURG ...... Amputation for musculoskeletal sys & 3.4435 9.5 12.6
conn tissue dis w MCC.
475 ........... Yes .......... No ............ 08 SURG ...... Amputation for musculoskeletal sys & 1.9768 6.5 8.4
conn tissue dis w CC.
476 ........... Yes .......... No ............ 08 SURG ...... Amputation for musculoskeletal sys & 1.1001 3.7 4.8
conn tissue dis w/o CC/MCC.
477 ........... Yes .......... Yes .......... 08 SURG ...... Biopsies of musculoskeletal system & 3.2545 8.9 11.9
connective tissue w MCC.
478 ........... Yes .......... Yes .......... 08 SURG ...... Biopsies of musculoskeletal system & 2.1266 4.6 6.6
connective tissue w CC.
479 ........... Yes .......... Yes .......... 08 SURG ...... Biopsies of musculoskeletal system & 1.4779 1.9 2.8
connective tissue w/o CC/MCC.
480 ........... Yes .......... Yes .......... 08 SURG ...... Hip & femur procedures except major 2.9050 7.8 9.3
joint w MCC.
481 ........... Yes .......... Yes .......... 08 SURG ...... Hip & femur procedures except major 1.8204 5.4 5.9
joint w CC.
482 ........... Yes .......... Yes .......... 08 SURG ...... Hip & femur procedures except major 1.4976 4.5 4.8
joint w/o CC/MCC.
483 ........... Yes .......... No ............ 08 SURG ...... Major joint & limb reattachment proc 2.2601 3.4 4.2
of upper extremity w CC/MCC.
484 ........... Yes .......... No ............ 08 SURG ...... Major joint & limb reattachment proc 1.7535 2.1 2.4
of upper extremity w/o CC/MCC.
485 ........... No ............ No ............ 08 SURG ...... Knee procedures w pdx of infection w 3.3033 9.8 12.1
MCC.
486 ........... No ............ No ............ 08 SURG ...... Knee procedures w pdx of infection w 2.1664 6.8 8.0
CC.
487 ........... No ............ No ............ 08 SURG ...... Knee procedures w pdx of infection w/ 1.5507 4.9 5.7
o CC/MCC.
488 ........... Yes .......... No ............ 08 SURG ...... Knee procedures w/o pdx of infection 1.6836 4.1 5.2
w CC/MCC.
489 ........... Yes .......... No ............ 08 SURG ...... Knee procedures w/o pdx of infection 1.1604 2.6 3.0
w/o CC/MCC.
490 ........... No ............ No ............ 08 SURG ...... Back & neck proc exc spinal fusion w 1.7221 3.0 4.3
CC/MCC or disc device/neurostim.
491 ........... No ............ No ............ 08 SURG ...... Back & neck proc exc spinal fusion w/ 0.9413 1.8 2.2
o CC/MCC.
492 ........... Yes .......... Yes .......... 08 SURG ...... Lower extrem & humer proc except 2.7705 6.8 8.5
hip,foot,femur w MCC.
493 ........... Yes .......... Yes .......... 08 SURG ...... Lower extrem & humer proc except 1.7631 4.3 5.3
hip,foot,femur w CC.
494 ........... Yes .......... Yes .......... 08 SURG ...... Lower extrem & humer proc except 1.2385 2.8 3.4
hip,foot,femur w/o CC/MCC.
495 ........... Yes .......... No ............ 08 SURG ...... Local excision & removal int fix de- 3.1782 8.1 11.0
vices exc hip & femur w MCC.
496 ........... Yes .......... No ............ 08 SURG ...... Local excision & removal int fix de- 1.7775 4.6 6.0
vices exc hip & femur w CC.
497 ........... Yes .......... No ............ 08 SURG ...... Local excision & removal int fix de- 1.1277 2.3 3.0
vices exc hip & femur w/o CC/MCC.
498 ........... No ............ No ............ 08 SURG ...... Local excision & removal int fix de- 2.0274 5.5 7.9
jlentini on PROD1PC65 with PROPOSALS2
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00303 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23830 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
504 ........... No ............ No ............ 08 SURG ...... Foot procedures w CC ........................ 1.4725 5.1 6.5
505 ........... No ............ No ............ 08 SURG ...... Foot procedures w/o CC/MCC ............ 0.9882 2.6 3.4
506 ........... No ............ No ............ 08 SURG ...... Major thumb or joint procedures ......... 1.0286 2.5 3.4
507 ........... No ............ No ............ 08 SURG ...... Major shoulder or elbow joint proce- 1.7188 3.7 5.1
dures w CC/MCC.
508 ........... No ............ No ............ 08 SURG ...... Major shoulder or elbow joint proce- 1.1156 1.7 2.1
dures w/o CC/MCC.
509 ........... No ............ No ............ 08 SURG ...... Arthroscopy ......................................... 1.1762 2.0 3.1
510 ........... Yes .......... No ............ 08 SURG ...... Shoulder,elbow or forearm proc, exc 1.9973 4.9 6.4
major joint proc w MCC.
511 ........... Yes .......... No ............ 08 SURG ...... Shoulder,elbow or forearm proc, exc 1.3434 3.2 4.0
major joint proc w CC.
512 ........... Yes .......... No ............ 08 SURG ...... Shoulder,elbow or forearm proc, exc 0.9533 1.8 2.2
major joint proc w/o CC/MCC.
513 ........... No ............ No ............ 08 SURG ...... Hand or wrist proc, except major 1.2813 3.6 5.0
thumb or joint proc w CC/MCC.
514 ........... No ............ No ............ 08 SURG ...... Hand or wrist proc, except major 0.8067 2.1 2.8
thumb or joint proc w/o CC/MCC.
515 ........... Yes .......... Yes .......... 08 SURG ...... Other musculoskelet sys & conn tiss 3.0601 7.9 10.4
O.R. proc w MCC.
516 ........... Yes .......... Yes .......... 08 SURG ...... Other musculoskelet sys & conn tiss 1.8073 4.5 6.0
O.R. proc w CC.
517 ........... Yes .......... Yes .......... 08 SURG ...... Other musculoskelet sys & conn tiss 1.3326 2.1 3.0
O.R. proc w/o CC/MCC.
533 ........... Yes .......... No ............ 08 MED ......... Fractures of femur w MCC .................. 1.4207 4.8 6.7
534 ........... Yes .......... No ............ 08 MED ......... Fractures of femur w/o MCC ............... 0.7318 3.3 4.0
535 ........... Yes .......... No ............ 08 MED ......... Fractures of hip & pelvis w MCC ........ 1.3327 4.8 6.2
536 ........... Yes .......... No ............ 08 MED ......... Fractures of hip & pelvis w/o MCC ..... 0.6934 3.4 3.9
537 ........... No ............ No ............ 08 MED ......... Sprains, strains, & dislocations of hip, 0.8871 3.6 4.5
pelvis & thigh w CC/MCC.
538 ........... No ............ No ............ 08 MED ......... Sprains, strains, & dislocations of hip, 0.5787 2.7 3.2
pelvis & thigh w/o CC/MCC.
539 ........... Yes .......... No ............ 08 MED ......... Osteomyelitis w MCC .......................... 2.0097 7.5 9.7
540 ........... Yes .......... No ............ 08 MED ......... Osteomyelitis w CC ............................. 1.3457 5.7 7.1
541 ........... Yes .......... No ............ 08 MED ......... Osteomyelitis w/o CC/MCC ................. 0.9285 4.2 5.4
542 ........... Yes .......... No ............ 08 MED ......... Pathological fractures & 1.8953 6.7 8.8
musculoskelet & conn tiss malig w
MCC.
543 ........... Yes .......... No ............ 08 MED ......... Pathological fractures & 1.1263 4.8 5.9
musculoskelet & conn tiss malig w
CC.
544 ........... Yes .......... No ............ 08 MED ......... Pathological fractures & 0.7672 3.7 4.4
musculoskelet & conn tiss malig w/o
CC/MCC.
545 ........... Yes .......... No ............ 08 MED ......... Connective tissue disorders w MCC ... 2.3477 6.5 9.1
546 ........... Yes .......... No ............ 08 MED ......... Connective tissue disorders w CC ...... 1.0951 4.4 5.5
547 ........... Yes .......... No ............ 08 MED ......... Connective tissue disorders w/o CC/ 0.7224 3.1 3.8
MCC.
548 ........... No ............ No ............ 08 MED ......... Septic arthritis w MCC ........................ 1.8776 6.7 8.9
549 ........... No ............ No ............ 08 MED ......... Septic arthritis w CC ........................... 1.1590 5.1 6.4
550 ........... No ............ No ............ 08 MED ......... Septic arthritis w/o CC/MCC ............... 0.8006 3.7 4.5
551 ........... Yes .......... No ............ 08 MED ......... Medical back problems w MCC .......... 1.5261 5.4 7.1
552 ........... Yes .......... No ............ 08 MED ......... Medical back problems w/o MCC ....... 0.7623 3.4 4.1
553 ........... No ............ No ............ 08 MED ......... Bone diseases & arthropathies w 1.0978 4.7 6.0
MCC.
554 ........... No ............ No ............ 08 MED ......... Bone diseases & arthropathies w/o 0.6305 3.0 3.7
MCC.
555 ........... No ............ No ............ 08 MED ......... Signs & symptoms of musculoskeletal 1.0014 3.6 4.8
system & conn tissue w MCC.
jlentini on PROD1PC65 with PROPOSALS2
556 ........... No ............ No ............ 08 MED ......... Signs & symptoms of musculoskeletal 0.5738 2.5 3.1
system & conn tissue w/o MCC.
557 ........... Yes .......... No ............ 08 MED ......... Tendonitis, myositis & bursitis w MCC 1.4264 5.2 6.6
558 ........... Yes .......... No ............ 08 MED ......... Tendonitis, myositis & bursitis w/o 0.8009 3.5 4.3
MCC.
559 ........... Yes .......... No ............ 08 MED ......... Aftercare, musculoskeletal system & 1.7085 5.3 7.6
connective tissue w MCC.
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00304 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23831
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
560 ........... Yes .......... No ............ 08 MED ......... Aftercare, musculoskeletal system & 0.9491 3.6 4.7
connective tissue w CC.
561 ........... Yes .......... No ............ 08 MED ......... Aftercare, musculoskeletal system & 0.5794 2.1 2.8
connective tissue w/o CC/MCC.
562 ........... Yes .......... No ............ 08 MED ......... Fx, sprn, strn & disl except femur, hip, 1.3933 4.9 6.4
pelvis & thigh w MCC.
563 ........... Yes .......... No ............ 08 MED ......... Fx, sprn, strn & disl except femur, hip, 0.6749 3.1 3.7
pelvis & thigh w/o MCC.
564 ........... No ............ No ............ 08 MED ......... Other musculoskeletal sys & connec- 1.4053 5.2 7.0
tive tissue diagnoses w MCC.
565 ........... No ............ No ............ 08 MED ......... Other musculoskeletal sys & connec- 0.8848 3.9 5.0
tive tissue diagnoses w CC.
566 ........... No ............ No ............ 08 MED ......... Other musculoskeletal sys & connec- 0.6673 3.0 3.7
tive tissue diagnoses w/o CC/MCC.
573 ........... Yes .......... No ............ 09 SURG ...... Skin graft &/or debrid for skn ulcer or 3.1703 9.6 13.1
cellulitis w MCC.
574 ........... Yes .......... No ............ 09 SURG ...... Skin graft &/or debrid for skn ulcer or 1.9362 7.1 9.3
cellulitis w CC.
575 ........... Yes .......... No ............ 09 SURG ...... Skin graft &/or debrid for skn ulcer or 1.1176 4.7 5.9
cellulitis w/o CC/MCC.
576 ........... No ............ No ............ 09 SURG ...... Skin graft &/or debrid exc for skin 3.4522 8.4 13.0
ulcer or cellulitis w MCC.
577 ........... No ............ No ............ 09 SURG ...... Skin graft &/or debrid exc for skin 1.5788 4.2 6.1
ulcer or cellulitis w CC.
578 ........... No ............ No ............ 09 SURG ...... Skin graft &/or debrid exc for skin 0.9803 2.4 3.3
ulcer or cellulitis w/o CC/MCC.
579 ........... Yes .......... No ............ 09 SURG ...... Other skin, subcut tiss & breast proc 2.7821 7.8 10.7
w MCC.
580 ........... Yes .......... No ............ 09 SURG ...... Other skin, subcut tiss & breast proc 1.4093 3.7 5.5
w CC.
581 ........... Yes .......... No ............ 09 SURG ...... Other skin, subcut tiss & breast proc 0.8606 1.9 2.6
w/o CC/MCC.
582 ........... No ............ No ............ 09 SURG ...... Mastectomy for malignancy w CC/ 0.9682 2.1 2.8
MCC.
583 ........... No ............ No ............ 09 SURG ...... Mastectomy for malignancy w/o CC/ 0.7498 1.6 1.8
MCC.
584 ........... No ............ No ............ 09 SURG ...... Breast biopsy, local excision & other 1.4344 4.0 6.0
breast procedures w CC/MCC.
585 ........... No ............ No ............ 09 SURG ...... Breast biopsy, local excision & other 0.7995 1.7 2.2
breast procedures w/o CC/MCC.
592 ........... Yes .......... No ............ 09 MED ......... Skin ulcers w MCC .............................. 1.7469 6.6 8.9
593 ........... Yes .......... No ............ 09 MED ......... Skin ulcers w CC ................................. 1.1021 5.2 6.4
594 ........... Yes .......... No ............ 09 MED ......... Skin ulcers w/o CC/MCC .................... 0.7871 4.1 5.1
595 ........... No ............ No ............ 09 MED ......... Major skin disorders w MCC ............... 1.8159 6.2 8.3
596 ........... No ............ No ............ 09 MED ......... Major skin disorders w/o MCC ............ 0.8200 3.8 4.8
597 ........... No ............ No ............ 09 MED ......... Malignant breast disorders w MCC ..... 1.6001 5.9 8.2
598 ........... No ............ No ............ 09 MED ......... Malignant breast disorders w CC ........ 1.0812 4.3 5.7
599 ........... No ............ No ............ 09 MED ......... Malignant breast disorders w/o CC/ 0.7309 2.7 3.7
MCC.
600 ........... No ............ No ............ 09 MED ......... Non-malignant breast disorders w CC/ 0.9433 4.1 5.1
MCC.
601 ........... No ............ No ............ 09 MED ......... Non-malignant breast disorders w/o 0.6539 3.1 3.9
CC/MCC.
602 ........... Yes .......... No ............ 09 MED ......... Cellulitis w MCC .................................. 1.3980 5.5 7.0
603 ........... Yes .......... No ............ 09 MED ......... Cellulitis w/o MCC ............................... 0.7988 3.9 4.7
604 ........... No ............ No ............ 09 MED ......... Trauma to the skin, subcut tiss & 1.1875 4.3 5.7
breast w MCC.
605 ........... No ............ No ............ 09 MED ......... Trauma to the skin, subcut tiss & 0.6739 2.8 3.5
breast w/o MCC.
606 ........... No ............ No ............ 09 MED ......... Minor skin disorders w MCC ............... 1.2415 4.4 6.3
jlentini on PROD1PC65 with PROPOSALS2
607 ........... No ............ No ............ 09 MED ......... Minor skin disorders w/o MCC ............ 0.6434 2.9 3.8
614 ........... No ............ No ............ 10 SURG ...... Adrenal & pituitary procedures w CC/ 2.5046 5.1 7.0
MCC.
615 ........... No ............ No ............ 10 SURG ...... Adrenal & pituitary procedures w/o 1.3782 2.7 3.2
CC/MCC.
616 ........... Yes .......... No ............ 10 SURG ...... Amputat of lower limb for endocrine, 4.6284 13.3 16.9
nutrit, & metabol dis w MCC.
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00305 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23832 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
617 ........... Yes .......... No ............ 10 SURG ...... Amputat of lower limb for endocrine, 2.0940 7.0 8.8
nutrit, & metabol dis w CC.
618 ........... Yes .......... No ............ 10 SURG ...... Amputat of lower limb for endocrine, 1.3234 5.1 6.4
nutrit, & metabol dis w/o CC/MCC.
619 ........... No ............ No ............ 10 SURG ...... O.R. procedures for obesity w MCC ... 3.3383 5.2 8.2
620 ........... No ............ No ............ 10 SURG ...... O.R. procedures for obesity w CC ...... 1.8739 2.9 3.7
621 ........... No ............ No ............ 10 SURG ...... O.R. procedures for obesity w/o CC/ 1.4269 1.9 2.2
MCC.
622 ........... Yes .......... No ............ 10 SURG ...... Skin grafts & wound debrid for endoc, 3.1268 9.4 13.2
nutrit & metab dis w MCC.
623 ........... Yes .......... No ............ 10 SURG ...... Skin grafts & wound debrid for endoc, 1.8728 6.7 8.6
nutrit & metab dis w CC.
624 ........... Yes .......... No ............ 10 SURG ...... Skin grafts & wound debrid for endoc, 1.0877 4.8 6.0
nutrit & metab dis w/o CC/MCC.
625 ........... No ............ No ............ 10 SURG ...... Thyroid, parathyroid & thyroglossal 2.1260 4.7 7.1
procedures w MCC.
626 ........... No ............ No ............ 10 SURG ...... Thyroid, parathyroid & thyroglossal 1.1284 2.1 3.1
procedures w CC.
627 ........... No ............ No ............ 10 SURG ...... Thyroid, parathyroid & thyroglossal 0.7378 1.3 1.5
procedures w/o CC/MCC.
628 ........... Yes .......... No ............ 10 SURG ...... Other endocrine, nutrit & metab O.R. 3.2732 7.5 11.2
proc w MCC.
629 ........... Yes .......... No ............ 10 SURG ...... Other endocrine, nutrit & metab O.R. 2.2931 6.9 8.7
proc w CC.
630 ........... Yes .......... No ............ 10 SURG ...... Other endocrine, nutrit & metab O.R. 1.5069 4.0 5.5
proc w/o CC/MCC.
637 ........... Yes .......... No ............ 10 MED ......... Diabetes w MCC ................................. 1.3538 4.5 6.1
638 ........... Yes .......... No ............ 10 MED ......... Diabetes w CC .................................... 0.8135 3.4 4.3
639 ........... Yes .......... No ............ 10 MED ......... Diabetes w/o CC/MCC ........................ 0.5577 2.5 3.0
640 ........... Yes .......... No ............ 10 MED ......... Nutritional & misc metabolic disorders 1.1105 3.9 5.4
w MCC.
641 ........... Yes .......... No ............ 10 MED ......... Nutritional & misc metabolic disorders 0.6798 3.1 3.8
w/o MCC.
642 ........... No ............ No ............ 10 MED ......... Inborn errors of metabolism ................ 1.0169 3.7 5.2
643 ........... Yes .......... No ............ 10 MED ......... Endocrine disorders w MCC ............... 1.6408 5.8 7.6
644 ........... Yes .......... No ............ 10 MED ......... Endocrine disorders w CC .................. 1.0437 4.4 5.5
645 ........... Yes .......... No ............ 10 MED ......... Endocrine disorders w/o CC/MCC ...... 0.7164 3.1 3.9
652 ........... No ............ No ............ 11 SURG ...... Kidney transplant ................................. 2.9787 6.6 7.8
653 ........... Yes .......... No ............ 11 SURG ...... Major bladder procedures w MCC ...... 5.8091 13.6 16.9
654 ........... Yes .......... No ............ 11 SURG ...... Major bladder procedures w CC ......... 2.9531 8.7 9.9
655 ........... Yes .......... No ............ 11 SURG ...... Major bladder procedures w/o CC/ 2.0241 5.7 6.5
MCC.
656 ........... No ............ No ............ 11 SURG ...... Kidney & ureter procedures for neo- 3.2762 8.0 10.1
plasm w MCC.
657 ........... No ............ No ............ 11 SURG ...... Kidney & ureter procedures for neo- 1.8655 5.0 6.0
plasm w CC.
658 ........... No ............ No ............ 11 SURG ...... Kidney & ureter procedures for neo- 1.3790 3.3 3.7
plasm w/o CC/MCC.
659 ........... Yes .......... No ............ 11 SURG ...... Kidney & ureter procedures for non- 3.3225 8.0 11.2
neoplasm w MCC.
660 ........... Yes .......... No ............ 11 SURG ...... Kidney & ureter procedures for non- 1.8913 4.8 6.5
neoplasm w CC.
661 ........... Yes .......... No ............ 11 SURG ...... Kidney & ureter procedures for non- 1.2600 2.6 3.3
neoplasm w/o CC/MCC.
662 ........... No ............ No ............ 11 SURG ...... Minor bladder procedures w MCC ...... 2.7078 7.4 10.3
663 ........... No ............ No ............ 11 SURG ...... Minor bladder procedures w CC ......... 1.4443 3.7 5.3
664 ........... No ............ No ............ 11 SURG ...... Minor bladder procedures w/o CC/ 0.9940 1.6 2.1
MCC.
665 ........... No ............ No ............ 11 SURG ...... Prostatectomy w MCC ........................ 2.5635 8.2 11.1
666 ........... No ............ No ............ 11 SURG ...... Prostatectomy w CC ........................... 1.5553 4.3 6.4
jlentini on PROD1PC65 with PROPOSALS2
667 ........... No ............ No ............ 11 SURG ...... Prostatectomy w/o CC/MCC ............... 0.8259 2.1 2.9
668 ........... No ............ No ............ 11 SURG ...... Transurethral procedures w MCC ....... 2.2348 6.2 8.5
669 ........... No ............ No ............ 11 SURG ...... Transurethral procedures w CC .......... 1.2049 3.1 4.4
670 ........... No ............ No ............ 11 SURG ...... Transurethral procedures w/o CC/ 0.7672 1.9 2.5
MCC.
671 ........... No ............ No ............ 11 SURG ...... Urethral procedures w CC/MCC ......... 1.4136 4.1 5.9
672 ........... No ............ No ............ 11 SURG ...... Urethral procedures w/o CC/MCC ...... 0.7962 1.9 2.5
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00306 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23833
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
673 ........... No ............ No ............ 11 SURG ...... Other kidney & urinary tract proce- 2.7645 5.8 9.7
dures w MCC.
674 ........... No ............ No ............ 11 SURG ...... Other kidney & urinary tract proce- 2.1527 4.6 7.2
dures w CC.
675 ........... No ............ No ............ 11 SURG ...... Other kidney & urinary tract proce- 1.3137 1.5 2.1
dures w/o CC/MCC.
682 ........... Yes .......... No ............ 11 MED ......... Renal failure w MCC ........................... 1.6374 5.2 7.2
683 ........... Yes .......... No ............ 11 MED ......... Renal failure w CC .............................. 1.1270 4.5 5.7
684 ........... Yes .......... No ............ 11 MED ......... Renal failure w/o CC/MCC .................. 0.7278 3.2 3.9
685 ........... No ............ No ............ 11 MED ......... Admit for renal dialysis ........................ 0.8578 2.5 3.5
686 ........... No ............ No ............ 11 MED ......... Kidney & urinary tract neoplasms w 1.6240 5.6 7.6
MCC.
687 ........... No ............ No ............ 11 MED ......... Kidney & urinary tract neoplasms w 1.0719 4.1 5.4
CC.
688 ........... No ............ No ............ 11 MED ......... Kidney & urinary tract neoplasms w/o 0.6816 2.5 3.3
CC/MCC.
689 ........... Yes .......... No ............ 11 MED ......... Kidney & urinary tract infections w 1.2271 4.9 6.2
MCC.
690 ........... Yes .......... No ............ 11 MED ......... Kidney & urinary tract infections w/o 0.7559 3.5 4.2
MCC.
691 ........... No ............ No ............ 11 MED ......... Urinary stones w esw lithotripsy w 1.4503 2.9 4.0
CC/MCC.
692 ........... No ............ No ............ 11 MED ......... Urinary stones w esw lithotripsy w/o 1.1528 1.9 2.4
CC/MCC.
693 ........... No ............ No ............ 11 MED ......... Urinary stones w/o esw lithotripsy w 1.1915 3.6 4.8
MCC.
694 ........... No ............ No ............ 11 MED ......... Urinary stones w/o esw lithotripsy w/o 0.6573 2.0 2.6
MCC.
695 ........... No ............ No ............ 11 MED ......... Kidney & urinary tract signs & symp- 1.1723 4.2 5.5
toms w MCC.
696 ........... No ............ No ............ 11 MED ......... Kidney & urinary tract signs & symp- 0.6308 2.6 3.3
toms w/o MCC.
697 ........... No ............ No ............ 11 MED ......... Urethral stricture .................................. 0.6938 2.4 3.1
698 ........... Yes .......... No ............ 11 MED ......... Other kidney & urinary tract diagnoses 1.4719 5.0 6.7
w MCC.
699 ........... Yes .......... No ............ 11 MED ......... Other kidney & urinary tract diagnoses 0.9700 3.7 4.8
w CC.
700 ........... Yes .......... No ............ 11 MED ......... Other kidney & urinary tract diagnoses 0.6813 2.8 3.6
w/o CC/MCC.
707 ........... No ............ No ............ 12 SURG ...... Major male pelvic procedures w CC/ 1.6265 3.4 4.4
MCC.
708 ........... No ............ No ............ 12 SURG ...... Major male pelvic procedures w/o CC/ 1.1839 1.8 2.1
MCC.
709 ........... No ............ No ............ 12 SURG ...... Penis procedures w CC/MCC ............. 1.8803 3.8 6.5
710 ........... No ............ No ............ 12 SURG ...... Penis procedures w/o CC/MCC .......... 1.2586 1.4 1.8
711 ........... No ............ No ............ 12 SURG ...... Testes procedures w CC/MCC ........... 2.0318 5.5 8.2
712 ........... No ............ No ............ 12 SURG ...... Testes procedures w/o CC/MCC ........ 0.8077 2.2 3.0
713 ........... No ............ No ............ 12 SURG ...... Transurethral prostatectomy w CC/ 1.1188 2.9 4.2
MCC.
714 ........... No ............ No ............ 12 SURG ...... Transurethral prostatectomy w/o CC/ 0.6333 1.7 1.9
MCC.
715 ........... No ............ No ............ 12 SURG ...... Other male reproductive system O.R. 1.7120 3.9 6.3
proc for malignancy w CC/MCC.
716 ........... No ............ No ............ 12 SURG ...... Other male reproductive system O.R. 0.9713 1.2 1.4
proc for malignancy w/o CC/MCC.
717 ........... No ............ No ............ 12 SURG ...... Other male reproductive system O.R. 1.8091 5.1 7.2
proc exc malignancy w CC/MCC.
718 ........... No ............ No ............ 12 SURG ...... Other male reproductive system O.R. 0.7849 2.2 2.8
proc exc malignancy w/o CC/MCC.
jlentini on PROD1PC65 with PROPOSALS2
722 ........... No ............ No ............ 12 MED ......... Malignancy, male reproductive system 1.5588 5.7 7.6
w MCC.
723 ........... No ............ No ............ 12 MED ......... Malignancy, male reproductive system 0.9901 4.1 5.3
w CC.
724 ........... No ............ No ............ 12 MED ......... Malignancy, male reproductive system 0.6006 2.4 3.2
w/o CC/MCC.
725 ........... No ............ No ............ 12 MED ......... Benign prostatic hypertrophy w MCC 1.0462 4.2 5.5
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00307 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23834 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
726 ........... No ............ No ............ 12 MED ......... Benign prostatic hypertrophy w/o 0.6675 2.7 3.5
MCC.
727 ........... No ............ No ............ 12 MED ......... Inflammation of the male reproductive 1.3016 5.0 6.4
system w MCC.
728 ........... No ............ No ............ 12 MED ......... Inflammation of the male reproductive 0.6911 3.3 4.0
system w/o MCC.
729 ........... No ............ No ............ 12 MED ......... Other male reproductive system diag- 1.0993 4.0 5.6
noses w CC/MCC.
730 ........... No ............ No ............ 12 MED ......... Other male reproductive system diag- 0.5963 2.4 3.1
noses w/o CC/MCC.
734 ........... No ............ No ............ 13 SURG ...... Pelvic evisceration, rad hysterectomy 2.3505 6.0 8.0
& rad vulvectomy w CC/MCC.
735 ........... No ............ No ............ 13 SURG ...... Pelvic evisceration, rad hysterectomy 1.1311 2.9 3.4
& rad vulvectomy w/o CC/MCC.
736 ........... No ............ No ............ 13 SURG ...... Uterine & adnexa proc for ovarian or 4.1736 11.2 13.8
adnexal malignancy w MCC.
737 ........... No ............ No ............ 13 SURG ...... Uterine & adnexa proc for ovarian or 1.9577 6.0 7.2
adnexal malignancy w CC.
738 ........... No ............ No ............ 13 SURG ...... Uterine & adnexa proc for ovarian or 1.1577 3.5 3.9
adnexal malignancy w/o CC/MCC.
739 ........... No ............ No ............ 13 SURG ...... Uterine, adnexa proc for non-ovarian/ 3.0131 7.8 10.2
adnexal malig w MCC.
740 ........... No ............ No ............ 13 SURG ...... Uterine, adnexa proc for non-ovarian/ 1.4661 4.3 5.2
adnexal malig w CC.
741 ........... No ............ No ............ 13 SURG ...... Uterine, adnexa proc for non-ovarian/ 1.0021 2.7 3.0
adnexal malig w/o CC/MCC.
742 ........... No ............ No ............ 13 SURG ...... Uterine & adnexa proc for non-malig- 1.3433 3.5 4.5
nancy w CC/MCC.
743 ........... No ............ No ............ 13 SURG ...... Uterine & adnexa proc for non-malig- 0.8469 2.0 2.3
nancy w/o CC/MCC.
744 ........... No ............ No ............ 13 SURG ...... D&C, conization, laparoscopy & tubal 1.3918 4.1 5.8
interruption w CC/MCC.
745 ........... No ............ No ............ 13 SURG ...... D&C, conization, laparoscopy & tubal 0.7460 2.1 2.6
interruption w/o CC/MCC.
746 ........... No ............ No ............ 13 SURG ...... Vagina, cervix & vulva procedures w 1.2662 3.0 4.2
CC/MCC.
747 ........... No ............ No ............ 13 SURG ...... Vagina, cervix & vulva procedures w/o 0.8403 1.6 1.9
CC/MCC.
748 ........... No ............ No ............ 13 SURG ...... Female reproductive system recon- 0.8193 1.5 1.7
structive procedures.
749 ........... No ............ No ............ 13 SURG ...... Other female reproductive system 2.4919 6.7 9.3
O.R. procedures w CC/MCC.
750 ........... No ............ No ............ 13 SURG ...... Other female reproductive system 0.9660 2.5 3.1
O.R. procedures w/o CC/MCC.
754 ........... No ............ No ............ 13 MED ......... Malignancy, female reproductive sys- 1.7520 6.2 8.3
tem w MCC.
755 ........... No ............ No ............ 13 MED ......... Malignancy, female reproductive sys- 1.0769 4.3 5.7
tem w CC.
756 ........... No ............ No ............ 13 MED ......... Malignancy, female reproductive sys- 0.6327 2.5 3.1
tem w/o CC/MCC.
757 ........... No ............ No ............ 13 MED ......... Infections, female reproductive system 1.5775 6.5 8.1
w MCC.
758 ........... No ............ No ............ 13 MED ......... Infections, female reproductive system 1.0621 4.9 6.1
w CC.
759 ........... No ............ No ............ 13 MED ......... Infections, female reproductive system 0.7646 3.6 4.5
w/o CC/MCC.
760 ........... No ............ No ............ 13 MED ......... Menstrual & other female reproductive 0.7917 3.0 4.0
system disorders w CC/MCC.
761 ........... No ............ No ............ 13 MED ......... Menstrual & other female reproductive 0.5008 1.9 2.4
jlentini on PROD1PC65 with PROPOSALS2
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00308 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23835
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
769 ........... No ............ No ............ 14 SURG ...... Postpartum & post abortion diagnoses 1.2935 3.2 4.6
w O.R. procedure.
770 ........... No ............ No ............ 14 SURG ...... Abortion w D&C, aspiration curettage 0.6677 1.6 2.2
or hysterotomy.
774 ........... No ............ No ............ 14 MED ......... Vaginal delivery w complicating diag- 0.6571 2.6 3.2
noses.
775 ........... No ............ No ............ 14 MED ......... Vaginal delivery w/o complicating di- 0.4830 2.0 2.2
agnoses.
776 ........... No ............ No ............ 14 MED ......... Postpartum & post abortion diagnoses 0.6192 2.5 3.3
w/o O.R. procedure.
777 ........... No ............ No ............ 14 MED ......... Ectopic pregnancy ............................... 0.7721 1.9 2.2
778 ........... No ............ No ............ 14 MED ......... Threatened abortion ............................ 0.4373 2.0 3.0
779 ........... No ............ No ............ 14 MED ......... Abortion w/o D&C ................................ 0.4871 1.6 2.1
780 ........... No ............ No ............ 14 MED ......... False labor ........................................... 0.1962 1.3 1.5
781 ........... No ............ No ............ 14 MED ......... Other antepartum diagnoses w med- 0.6154 2.6 3.8
ical complications.
782 ........... No ............ No ............ 14 MED ......... Other antepartum diagnoses w/o med- 0.3926 1.7 2.5
ical complications.
789 ........... No ............ No ............ 15 MED ......... Neonates, died or transferred to an- 1.4227 0.0 0.0
other acute care facility.
790 ........... No ............ No ............ 15 MED ......... Extreme immaturity or respiratory dis- 4.6916 0.0 0.0
tress syndrome, neonate.
791 ........... No ............ No ............ 15 MED ......... Prematurity w major problems ............ 3.2042 0.0 0.0
792 ........... No ............ No ............ 15 MED ......... Prematurity w/o major problems ......... 1.9334 0.0 0.0
793 ........... No ............ No ............ 15 MED ......... Full term neonate w major problems .. 3.2914 0.0 0.0
794 ........... No ............ No ............ 15 MED ......... Neonate w other significant problems 1.1650 0.0 0.0
795 ........... No ............ No ............ 15 MED ......... Normal newborn .................................. 0.1577 0.0 0.0
799 ........... No ............ No ............ 16 SURG ...... Splenectomy w MCC ........................... 4.7602 10.8 14.1
800 ........... No ............ No ............ 16 SURG ...... Splenectomy w CC .............................. 2.5819 6.2 7.9
801 ........... No ............ No ............ 16 SURG ...... Splenectomy w/o CC/MCC ................. 1.6484 3.8 4.9
802 ........... No ............ No ............ 16 SURG ...... Other O.R. proc of the blood & blood 3.3539 8.9 12.2
forming organs w MCC.
803 ........... No ............ No ............ 16 SURG ...... Other O.R. proc of the blood & blood 1.7689 4.7 6.7
forming organs w CC.
804 ........... No ............ No ............ 16 SURG ...... Other O.R. proc of the blood & blood 1.0613 2.5 3.4
forming organs w/o CC/MCC.
808 ........... No ............ No ............ 16 MED ......... Major hematol/immun diag exc sickle 1.9850 6.3 8.2
cell crisis & coagul w MCC.
809 ........... No ............ No ............ 16 MED ......... Major hematol/immun diag exc sickle 1.1737 4.2 5.3
cell crisis & coagul w CC.
810 ........... No ............ No ............ 16 MED ......... Major hematol/immun diag exc sickle 0.8957 3.2 4.0
cell crisis & coagul w/o CC/MCC.
811 ........... No ............ No ............ 16 MED ......... Red blood cell disorders w MCC ........ 1.2742 4.0 5.7
812 ........... No ............ No ............ 16 MED ......... Red blood cell disorders w/o MCC ..... 0.7629 2.8 3.7
813 ........... No ............ No ............ 16 MED ......... Coagulation disorders ......................... 1.3556 3.7 5.1
814 ........... No ............ No ............ 16 MED ......... Reticuloendothelial & immunity dis- 1.4932 5.0 6.7
orders w MCC.
815 ........... No ............ No ............ 16 MED ......... Reticuloendothelial & immunity dis- 0.9973 3.8 5.0
orders w CC.
816 ........... No ............ No ............ 16 MED ......... Reticuloendothelial & immunity dis- 0.6989 2.8 3.5
orders w/o CC/MCC.
820 ........... No ............ No ............ 17 SURG ...... Lymphoma & leukemia w major O.R. 5.6401 13.3 17.7
procedure w MCC.
821 ........... No ............ No ............ 17 SURG ...... Lymphoma & leukemia w major O.R. 2.2489 5.5 7.9
procedure w CC.
822 ........... No ............ No ............ 17 SURG ...... Lymphoma & leukemia w major O.R. 1.2399 2.6 3.5
procedure w/o CC/MCC.
823 ........... No ............ No ............ 17 SURG ...... Lymphoma & non-acute leukemia w 4.0990 12.1 15.4
other O.R. proc w MCC.
824 ........... No ............ No ............ 17 SURG ...... Lymphoma & non-acute leukemia w 2.1791 6.6 8.7
jlentini on PROD1PC65 with PROPOSALS2
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00309 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23836 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
828 ........... No ............ No ............ 17 SURG ...... Myeloprolif disord or poorly diff neopl 1.3050 3.0 3.8
w maj O.R. proc w/o CC/MCC.
829 ........... No ............ No ............ 17 SURG ...... Myeloprolif disord or poorly diff neopl 2.8972 7.0 10.7
w other O.R. proc w CC/MCC.
830 ........... No ............ No ............ 17 SURG ...... Myeloprolif disord or poorly diff neopl 1.0802 2.5 3.7
w other O.R. proc w/o CC/MCC.
834 ........... No ............ No ............ 17 MED ......... Acute leukemia w/o major O.R. proce- 4.5854 9.5 15.5
dure w MCC.
835 ........... No ............ No ............ 17 MED ......... Acute leukemia w/o major O.R. proce- 2.5840 6.2 10.4
dure w CC.
836 ........... No ............ No ............ 17 MED ......... Acute leukemia w/o major O.R. proce- 1.2085 3.4 5.2
dure w/o CC/MCC.
837 ........... No ............ No ............ 17 MED ......... Chemo w acute leukemia as sdx or w 6.4047 17.6 23.1
high dose chemo agent w MCC.
838 ........... No ............ No ............ 17 MED ......... Chemo w acute leukemia as sdx w 2.9669 7.9 12.3
CC or high dose chemo agent.
839 ........... No ............ No ............ 17 MED ......... Chemo w acute leukemia as sdx w/o 1.4181 5.0 6.4
CC/MCC.
840 ........... Yes .......... No ............ 17 MED ......... Lymphoma & non-acute leukemia w 2.6031 7.7 10.4
MCC.
841 ........... Yes .......... No ............ 17 MED ......... Lymphoma & non-acute leukemia w 1.5529 5.2 6.9
CC.
842 ........... Yes .......... No ............ 17 MED ......... Lymphoma & non-acute leukemia w/o 1.0261 3.4 4.6
CC/MCC.
843 ........... No ............ No ............ 17 MED ......... Other myeloprolif dis or poorly diff 1.8203 6.1 8.5
neopl diag w MCC.
844 ........... No ............ No ............ 17 MED ......... Other myeloprolif dis or poorly diff 1.2030 4.6 6.1
neopl diag w CC.
845 ........... No ............ No ............ 17 MED ......... Other myeloprolif dis or poorly diff 0.8143 3.3 4.3
neopl diag w/o CC/MCC.
846 ........... No ............ No ............ 17 MED ......... Chemotherapy w/o acute leukemia as 2.1299 5.8 8.4
secondary diagnosis w MCC.
847 ........... No ............ No ............ 17 MED ......... Chemotherapy w/o acute leukemia as 0.9436 2.7 3.4
secondary diagnosis w CC.
848 ........... No ............ No ............ 17 MED ......... Chemotherapy w/o acute leukemia as 0.7995 2.5 3.1
secondary diagnosis w/o CC/MCC.
849 ........... No ............ No ............ 17 MED ......... Radiotherapy ....................................... 1.2021 4.4 6.0
853 ........... Yes .......... No ............ 18 SURG ...... Infectious & parasitic diseases w O.R. 5.4286 12.7 16.7
procedure w MCC.
854 ........... Yes .......... No ............ 18 SURG ...... Infectious & parasitic diseases w O.R. 2.9171 9.1 11.1
procedure w CC.
855 ........... Yes .......... No ............ 18 SURG ...... Infectious & parasitic diseases w O.R. 1.8093 5.6 7.0
procedure w/o CC/MCC.
856 ........... Yes .......... No ............ 18 SURG ...... Postoperative or post-traumatic infec- 4.7315 11.5 15.4
tions w O.R. proc w MCC.
857 ........... Yes .......... No ............ 18 SURG ...... Postoperative or post-traumatic infec- 2.0472 6.6 8.5
tions w O.R. proc w CC.
858 ........... Yes .......... No ............ 18 SURG ...... Postoperative or post-traumatic infec- 1.3563 4.5 5.7
tions w O.R. proc w/o CC/MCC.
862 ........... Yes .......... No ............ 18 MED ......... Postoperative & post-traumatic infec- 1.9123 6.1 8.2
tions w MCC.
863 ........... Yes .......... No ............ 18 MED ......... Postoperative & post-traumatic infec- 0.9575 4.2 5.2
tions w/o MCC.
864 ........... No ............ No ............ 18 MED ......... Fever of unknown origin ...................... 0.8224 3.2 4.1
865 ........... No ............ No ............ 18 MED ......... Viral illness w MCC ............................. 1.4950 4.7 6.7
866 ........... No ............ No ............ 18 MED ......... Viral illness w/o MCC .......................... 0.6673 2.8 3.5
867 ........... Yes .......... No ............ 18 MED ......... Other infectious & parasitic diseases 2.3423 7.0 9.6
diagnoses w MCC.
868 ........... Yes .......... No ............ 18 MED ......... Other infectious & parasitic diseases 1.0761 4.5 5.8
jlentini on PROD1PC65 with PROPOSALS2
diagnoses w CC.
869 ........... Yes .......... No ............ 18 MED ......... Other infectious & parasitic diseases 0.7628 3.5 4.3
diagnoses w/o CC/MCC.
870 ........... Yes .......... No ............ 18 MED ......... Septicemia or severe sepsis w MV 5.7422 12.9 15.5
96+ hours.
871 ........... Yes .......... No ............ 18 MED ......... Septicemia or severe sepsis w/o MV 1.8211 5.5 7.5
96+ hours w MCC.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23837
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
872 ........... Yes .......... No ............ 18 MED ......... Septicemia or severe sepsis w/o MV 1.1188 4.7 5.7
96+ hours w/o MCC.
876 ........... No ............ No ............ 19 SURG ...... O.R. procedure w principal diagnoses 2.4279 7.8 11.9
of mental illness.
880 ........... No ............ No ............ 19 MED ......... Acute adjustment reaction & psycho- 0.5867 2.4 3.2
social dysfunction.
881 ........... No ............ No ............ 19 MED ......... Depressive neuroses ........................... 0.5784 3.1 4.2
882 ........... No ............ No ............ 19 MED ......... Neuroses except depressive ............... 0.6086 3.1 4.4
883 ........... No ............ No ............ 19 MED ......... Disorders of personality & impulse 1.0102 4.4 7.4
control.
884 ........... Yes .......... No ............ 19 MED ......... Organic disturbances & mental retar- 0.8923 4.1 5.5
dation.
885 ........... No ............ No ............ 19 MED ......... Psychoses ........................................... 0.8380 5.5 7.6
886 ........... No ............ No ............ 19 MED ......... Behavioral & developmental disorders 0.7479 4.0 6.1
887 ........... No ............ No ............ 19 MED ......... Other mental disorder diagnoses ........ 0.7275 3.0 4.6
894 ........... No ............ No ............ 20 MED ......... Alcohol/drug abuse or dependence, 0.3842 2.1 3.0
left ama.
895 ........... No ............ No ............ 20 MED ......... Alcohol/drug abuse or dependence w 0.8727 8.1 10.5
rehabilitation therapy.
896 ........... Yes .......... No ............ 20 MED ......... Alcohol/drug abuse or dependence w/ 1.3787 4.8 6.6
o rehabilitation therapy w MCC.
897 ........... Yes .......... No ............ 20 MED ......... Alcohol/drug abuse or dependence w/ 0.6152 3.3 4.1
o rehabilitation therapy w/o MCC.
901 ........... No ............ No ............ 21 SURG ...... Wound debridements for injuries w 3.8708 9.9 15.1
MCC.
902 ........... No ............ No ............ 21 SURG ...... Wound debridements for injuries w 1.6889 5.5 7.7
CC.
903 ........... No ............ No ............ 21 SURG ...... Wound debridements for injuries w/o 0.9976 3.4 4.6
CC/MCC.
904 ........... No ............ No ............ 21 SURG ...... Skin grafts for injuries w CC/MCC ...... 2.9204 7.0 11.2
905 ........... No ............ No ............ 21 SURG ...... Skin grafts for injuries w/o CC/MCC ... 1.1156 3.4 4.7
906 ........... No ............ No ............ 21 SURG ...... Hand procedures for injuries ............... 0.9941 2.1 3.1
907 ........... Yes .......... No ............ 21 SURG ...... Other O.R. procedures for injuries w 3.6871 8.0 11.6
MCC.
908 ........... Yes .......... No ............ 21 SURG ...... Other O.R. procedures for injuries w 1.9162 4.9 6.8
CC.
909 ........... Yes .......... No ............ 21 SURG ...... Other O.R. procedures for injuries w/o 1.1372 2.7 3.6
CC/MCC.
913 ........... No ............ No ............ 21 MED ......... Traumatic injury w MCC ...................... 1.2246 4.2 5.7
914 ........... No ............ No ............ 21 MED ......... Traumatic injury w/o MCC ................... 0.6625 2.7 3.4
915 ........... No ............ No ............ 21 MED ......... Allergic reactions w MCC .................... 1.2354 3.3 4.7
916 ........... No ............ No ............ 21 MED ......... Allergic reactions w/o MCC ................. 0.4409 1.7 2.1
917 ........... Yes .......... No ............ 21 MED ......... Poisoning & toxic effects of drugs w 1.4143 3.7 5.2
MCC.
918 ........... Yes .......... No ............ 21 MED ......... Poisoning & toxic effects of drugs w/o 0.5809 2.1 2.7
MCC.
919 ........... No ............ No ............ 21 MED ......... Complications of treatment w MCC .... 1.5200 4.5 6.4
920 ........... No ............ No ............ 21 MED ......... Complications of treatment w CC ....... 0.9220 3.3 4.4
921 ........... No ............ No ............ 21 MED ......... Complications of treatment w/o CC/ 0.6097 2.3 3.0
MCC.
922 ........... No ............ No ............ 21 MED ......... Other injury, poisoning & toxic effect 1.3580 4.1 6.0
diag w MCC.
923 ........... No ............ No ............ 21 MED ......... Other injury, poisoning & toxic effect 0.6142 2.4 3.2
diag w/o MCC.
927 ........... No ............ No ............ 22 SURG ...... Extensive burns or full thickness 14.0060 23.4 31.1
burns w MV 96+ hrs w skin graft.
928 ........... No ............ No ............ 22 SURG ...... Full thickness burn w skin graft or 5.0621 11.7 16.0
inhal inj w CC/MCC.
929 ........... No ............ No ............ 22 SURG ...... Full thickness burn w skin graft or 2.1574 5.3 7.7
inhal inj w/o CC/MCC.
jlentini on PROD1PC65 with PROPOSALS2
933 ........... No ............ No ............ 22 MED ......... Extensive burns or full thickness 2.1246 2.3 4.3
burns w MV 96+ hrs w/o skin graft.
934 ........... No ............ No ............ 22 MED ......... Full thickness burn w/o skin grft or 1.2949 4.4 6.2
inhal inj.
935 ........... No ............ No ............ 22 MED ......... Non-extensive burns ........................... 1.2209 3.6 5.4
939 ........... No ............ No ............ 23 SURG ...... O.R. proc w diagnoses of other con- 2.6570 6.6 10.1
tact w health services w MCC.
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23838 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS–DRGS), RELATIVE WEIGHTING FACTORS,
AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—Continued
FY 2009
FY 2009 proposed
proposed Geometric Arithmetic
MS–DRG rule MDC Type MS–DRG title Weights
rule post- mean LOS mean LOS
special pay
acute DRG DRG
940 ........... No ............ No ............ 23 SURG ...... O.R. proc w diagnoses of other con- 1.6379 3.6 5.4
tact w health services w CC.
941 ........... No ............ No ............ 23 SURG ...... O.R. proc w diagnoses of other con- 1.0782 2.1 2.7
tact w health services w/o CC/MCC.
945 ........... Yes .......... No ............ 23 MED ......... Rehabilitation w CC/MCC ................... 1.2869 8.6 10.5
946 ........... Yes .......... No ............ 23 MED ......... Rehabilitation w/o CC/MCC ................ 1.0861 6.9 7.9
947 ........... Yes .......... No ............ 23 MED ......... Signs & symptoms w MCC ................. 1.0525 3.8 5.0
948 ........... Yes .......... No ............ 23 MED ......... Signs & symptoms w/o MCC .............. 0.6473 2.8 3.5
949 ........... No ............ No ............ 23 MED ......... Aftercare w CC/MCC ........................... 0.7925 2.6 4.1
950 ........... No ............ No ............ 23 MED ......... Aftercare w/o CC/MCC ........................ 0.5548 2.4 3.5
951 ........... No ............ No ............ 23 MED ......... Other factors influencing health status 0.7442 2.2 4.7
955 ........... No ............ No ............ 24 SURG ...... Craniotomy for multiple significant 5.0969 8.6 12.3
trauma.
956 ........... Yes .......... No ............ 24 SURG ...... Limb reattachment, hip & femur proc 3.5263 7.6 9.3
for multiple significant trauma.
957 ........... No ............ No ............ 24 SURG ...... Other O.R. procedures for multiple 6.0787 10.2 14.9
significant trauma w MCC.
958 ........... No ............ No ............ 24 SURG ...... Other O.R. procedures for multiple 3.6129 8.0 10.4
significant trauma w CC.
959 ........... No ............ No ............ 24 SURG ...... Other O.R. procedures for multiple 2.3808 4.9 6.3
significant trauma w/o CC/MCC.
963 ........... No ............ No ............ 24 MED ......... Other multiple significant trauma w 2.8713 6.7 9.5
MCC.
964 ........... No ............ No ............ 24 MED ......... Other multiple significant trauma w 1.6024 4.9 6.2
CC.
965 ........... No ............ No ............ 24 MED ......... Other multiple significant trauma w/o 0.9832 3.4 4.1
CC/MCC.
969 ........... No ............ No ............ 25 SURG ...... HIV w extensive O.R. procedure w 5.3749 12.9 18.8
MCC.
970 ........... No ............ No ............ 25 SURG ...... HIV w extensive O.R. procedure w/o 2.4892 6.5 9.8
MCC.
974 ........... No ............ No ............ 25 MED ......... HIV w major related condition w MCC 2.5595 7.3 10.4
975 ........... No ............ No ............ 25 MED ......... HIV w major related condition w CC ... 1.3571 5.3 7.0
976 ........... No ............ No ............ 25 MED ......... HIV w major related condition w/o CC/ 0.8910 3.8 4.9
MCC.
977 ........... No ............ No ............ 25 MED ......... HIV w or w/o other related condition .. 1.0965 3.9 5.3
981 ........... Yes .......... No ............ ........ SURG ...... Extensive O.R. procedure unrelated to 5.0175 11.7 15.1
principal diagnosis w MCC.
982 ........... Yes .......... No ............ ........ SURG ...... Extensive O.R. procedure unrelated to 3.0780 7.5 9.7
principal diagnosis w CC.
983 ........... Yes .......... No ............ ........ SURG ...... Extensive O.R. procedure unrelated to 1.9959 3.9 5.4
principal diagnosis w/o CC/MCC.
984 ........... No ............ No ............ ........ SURG ...... Prostatic O.R. procedure unrelated to 3.3256 11.8 14.6
principal diagnosis w MCC.
985 ........... No ............ No ............ ........ SURG ...... Prostatic O.R. procedure unrelated to 2.2113 7.3 9.7
principal diagnosis w CC.
986 ........... No ............ No ............ ........ SURG ...... Prostatic O.R. procedure unrelated to 1.2767 3.5 5.3
principal diagnosis w/o CC/MCC.
987 ........... Yes .......... No ............ ........ SURG ...... Non-extensive O.R. proc unrelated to 3.4336 9.8 13.0
principal diagnosis w MCC.
988 ........... Yes .......... No ............ ........ SURG ...... Non-extensive O.R. proc unrelated to 1.8752 5.8 7.8
principal diagnosis w CC.
989 ........... Yes .......... No ............ ........ SURG ...... Non-extensive O.R. proc unrelated to 1.1032 2.9 4.1
principal diagnosis w/o CC/MCC.
998 ........... No ............ No ............ ........ ** .............. Principal diagnosis invalid as dis- 0.0000 0.0 0.0
charge diagnosis.
999 ........... No ............ No ............ ........ ** .............. Ungroupable ........................................ 0.0000 0.0 0.0
jlentini on PROD1PC65 with PROPOSALS2
MS–DRGs 998 and 999 contain cases that could not be assigned to valid DRGs.
NOTE: If there is no value in either the geometric mean length of stay or the arithmetic mean length of stay columns, the volume of cases is in-
sufficient to obtain a meaningful computation of these statistics.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23839
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23840 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
206.02 ...... Acute monocytic leukemia, in relapse ......................................................................................... CC .... 17 820, 821, 822,
834, 835, 836,
837 1, 838 1,
839 1
206.12 ...... Chronic monocytic leukemia, in relapse ..................................................................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
206.22 ...... Subacute monocytic leukemia, in relapse ................................................................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
206.82 ...... Other monocytic leukemia, in relapse ......................................................................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
206.92 ...... Unspecified monocytic leukemia, in relapse ............................................................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
207.02 ...... Acute erythremia and erythroleukemia, in relapse ..................................................................... CC .... 17 820, 821, 822,
834, 835, 836,
837 1, 838 1,
839 1
207.12 ...... Chronic erythremia, in relapse .................................................................................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
207.22 ...... Megakaryocytic leukemia, in relapse .......................................................................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
207.82 ...... Other specified leukemia, in relapse ........................................................................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
208.02 ...... Acute leukemia of unspecified cell type, in relapse .................................................................... CC .... 17 820, 821, 822,
834, 835, 836,
837 1, 838 1,
839 1
208.12 ...... Chronic leukemia of unspecified cell type, in relapse ................................................................. CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
208.22 ...... Subacute leukemia of unspecified cell type, in relapse .............................................................. CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
208.82 ...... Other leukemia of unspecified cell type, in relapse .................................................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
208.92 ...... Unspecified leukemia, in relapse ................................................................................................ CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
209.00 ...... Malignant carcinoid tumor of the small intestine, unspecified portion ........................................ CC .... 06 374, 375, 376
209.01 ...... Malignant carcinoid tumor of the duodenum ............................................................................... CC .... 06 374, 375, 376
209.02 ...... Malignant carcinoid tumor of the jejunum ................................................................................... CC .... 06 374, 375, 376
209.03 ...... Malignant carcinoid tumor of the ileum ....................................................................................... CC .... 06 374, 375, 376
209.10 ...... Malignant carcinoid tumor of the large intestine, unspecified portion ........................................ CC .... 06 374, 375, 376
209.11 ...... Malignant carcinoid tumor of the appendix ................................................................................. CC .... 06 338, 339, 340,
374, 375, 376
209.12 ...... Malignant carcinoid tumor of the cecum ..................................................................................... CC .... 06 374, 375, 376
209.13 ...... Malignant carcinoid tumor of the ascending colon ..................................................................... CC .... 06 374, 375, 376
209.14 ...... Malignant carcinoid tumor of the transverse colon ..................................................................... CC .... 06 374, 375, 376
209.15 ...... Malignant carcinoid tumor of the descending colon ................................................................... CC .... 06 374, 375, 376
209.16 ...... Malignant carcinoid tumor of the sigmoid colon ......................................................................... CC .... 06 374, 375, 376
209.17 ...... Malignant carcinoid tumor of the rectum ..................................................................................... CC .... 06 374, 375, 376
209.20 ...... Malignant carcinoid tumor of unknown primary site ................................................................... CC .... 17 843, 844, 845
209.21 ...... Malignant carcinoid tumor of the bronchus and lung .................................................................. CC .... 04 180, 181, 182
209.22 ...... Malignant carcinoid tumor of the thymus .................................................................................... CC .... 17 843, 844, 845
209.23 ...... Malignant carcinoid tumor of the stomach .................................................................................. CC .... 06 374, 375, 376
209.24 ...... Malignant carcinoid tumor of the kidney ..................................................................................... CC .... 11 656, 657, 658,
686, 687, 688
jlentini on PROD1PC65 with PROPOSALS2
209.25 ...... Malignant carcinoid tumor of foregut, not otherwise specified ................................................... CC .... 06 374, 375, 376
209.26 ...... Malignant carcinoid tumor of midgut, not otherwise specified .................................................... CC .... 06 374, 375, 376
209.27 ...... Malignant carcinoid tumor of hindgut, not otherwise specified ................................................... CC .... 06 374, 375, 376
209.29 ...... Malignant carcinoid tumor of other sites ..................................................................................... CC .... 17 843, 844, 845
209.30 ...... Malignant poorly differentiated neuroendocrine carcinoma, any site ......................................... CC .... 17 843, 844, 845
209.40 ...... Benign carcinoid tumor of the small intestine, unspecified portion ............................................ N ....... 06 393, 394, 395
209.41 ...... Benign carcinoid tumor of the duodenum ................................................................................... N ....... 06 393, 394, 395
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23841
209.42 ...... Benign carcinoid tumor of the jejunum ....................................................................................... N ....... 06 393, 394, 395
209.43 ...... Benign carcinoid tumor of the ileum ........................................................................................... N ....... 06 393, 394, 395
209.50 ...... Benign carcinoid tumor of the large intestine, unspecified portion ............................................. N ....... 06 393, 394, 395
209.51 ...... Benign carcinoid tumor of the appendix ..................................................................................... N ....... 06 393, 394, 395
209.52 ...... Benign carcinoid tumor of the cecum ......................................................................................... N ....... 06 393, 394, 395
209.53 ...... Benign carcinoid tumor of the ascending colon .......................................................................... N ....... 06 393, 394, 395
209.54 ...... Benign carcinoid tumor of the transverse colon ......................................................................... N ....... 06 393, 394, 395
209.55 ...... Benign carcinoid tumor of the descending colon ........................................................................ N ....... 06 393, 394, 395
209.56 ...... Benign carcinoid tumor of the sigmoid colon .............................................................................. N ....... 06 393, 394, 395
209.57 ...... Benign carcinoid tumor of the rectum ......................................................................................... N ....... 06 393, 394, 395
209.60 ...... Benign carcinoid tumor of unknown primary site ........................................................................ N ....... 17 843, 844, 845
209.61 ...... Benign carcinoid tumor of the bronchus and lung ...................................................................... N ....... 04 180, 181, 182
209.62 ...... Benign carcinoid tumor of the thymus ........................................................................................ N ....... 16 814, 815, 816
209.63 ...... Benign carcinoid tumor of the stomach ...................................................................................... N ....... 06 393, 394, 395
209.64 ...... Benign carcinoid tumor of the kidney .......................................................................................... N ....... 11 656, 657, 658,
686, 687, 688
209.65 ...... Benign carcinoid tumor of foregut, not otherwise specified ........................................................ N ....... 06 393, 394, 395
209.66 ...... Benign carcinoid tumor of midgut, not otherwise specified ........................................................ N ....... 06 393, 394, 395
209.67 ...... Benign carcinoid tumor of hindgut, not otherwise specified ....................................................... N ....... 06 393, 394, 395
209.69 ...... Benign carcinoid tumor of other sites ......................................................................................... N ....... 17 843, 844, 845
238.77 ...... Post-transplant lymphoproliferative disorder (PTLD) .................................................................. CC .... 21 919, 920, 921
249.00 ...... Secondary diabetes mellitus without mention of complication, not stated as uncontrolled, or N ....... PRE 008, 010
unspecified. 10 637, 638, 639
249.01 ...... Secondary diabetes mellitus without mention of complication, uncontrolled .............................. N ....... PRE 008, 010
10 637, 638, 639
249.10 ...... Secondary diabetes mellitus with ketoacidosis, not stated as uncontrolled, or unspecified ...... MCC PRE 008, 010
10 637, 638, 639
249.11 ...... Secondary diabetes mellitus with ketoacidosis, uncontrolled ..................................................... MCC PRE 008, 010
10 637, 638, 639,
249.20 ...... Secondary diabetes mellitus with hyperosmolarity, not stated as uncontrolled, or unspecified MCC PRE 008, 010
10 637, 638, 639
249.21 ...... Secondary diabetes mellitus with hyperosmolarity, uncontrolled ............................................... MCC PRE 008, 010
10 637, 638, 639
249.30 ...... Secondary diabetes mellitus with other coma, not stated as uncontrolled, or unspecified ........ MCC PRE 008, 010
10 637, 638, 639
249.31 ...... Secondary diabetes mellitus with other coma, uncontrolled ....................................................... MCC PRE 008, 010
10 637, 638, 639
249.40 ...... Secondary diabetes mellitus with renal manifestations, not stated as uncontrolled, or unspec- N ....... PRE 008, 010
ified. 11 698, 699, 700
249.41 ...... Secondary diabetes mellitus with renal manifestations, uncontrolled ........................................ N ....... PRE 008, 010
11 698, 699, 700
249.50 ...... Secondary diabetes mellitus with ophthalmic manifestations, not stated as uncontrolled, or N ....... PRE 008, 010
unspecified. 02 124, 125
249.51 ...... Secondary diabetes mellitus with ophthalmic manifestations, uncontrolled ............................... N ....... PRE 008, 010
02 124, 125
249.60 ...... Secondary diabetes mellitus with neurological manifestations, not stated as uncontrolled, or N ....... PRE 008, 010
unspecified. 01 073, 074
249.61 ...... Secondary diabetes mellitus with neurological manifestations, uncontrolled ............................. N ....... PRE 008, 010
01 073, 074
249.70 ...... Secondary diabetes mellitus with peripheral circulatory disorders, not stated as uncontrolled, N ....... PRE 008, 010
or unspecified. 05 299, 300, 301
249.71 ...... Secondary diabetes mellitus with peripheral circulatory disorders, uncontrolled ....................... N ....... PRE 008, 010
05 299, 300, 301
249.80 ...... Secondary diabetes mellitus with other specified manifestations, not stated as uncontrolled, N ....... PRE 008, 010
or unspecified. 10 637, 638, 639
249.81 ...... Secondary diabetes mellitus with other specified manifestations, uncontrolled ......................... N ....... PRE 008, 010
10 637, 638, 639
249.90 ...... Secondary diabetes mellitus with unspecified complication, not stated as uncontrolled, or un- N ....... PRE 008, 010
specified. 10 637, 638, 639
249.91 ...... Secondary diabetes mellitus with unspecified complication, uncontrolled ................................. N ....... PRE 008, 010
10 637, 638, 639
259.50 ...... Androgen insensitivity, unspecified ............................................................................................. N ....... 10 643, 644, 645
259.51 ...... Androgen insensitivity syndrome ................................................................................................. N ....... 10 643, 644, 645
259.52 ...... Partial androgen insensitivity ....................................................................................................... N ....... 10 643, 644, 645
jlentini on PROD1PC65 with PROPOSALS2
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23842 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
25 977
337.00 ...... Idiopathic peripheral autonomic neuropathy, unspecified ........................................................... N ....... 01 073, 074
337.01 ...... Carotid sinus syndrome ............................................................................................................... N ....... 01 073, 074
337.09 ...... Other idiopathic peripheral autonomic neuropathy ..................................................................... N ....... 01 073, 074
339.00 ...... Cluster headache syndrome, unspecified ................................................................................... N ....... 01 102, 103
339.01 ...... Episodic cluster headache .......................................................................................................... N ....... 01 102, 103
339.02 ...... Chronic cluster headache ............................................................................................................ N ....... 01 102, 103
339.03 ...... Episodic paroxysmal hemicrania ................................................................................................. N ....... 01 102, 103
339.04 ...... Chronic paroxysmal hemicrania .................................................................................................. N ....... 01 102, 103
339.05 ...... Short lasting unilateral neuralgiform headache with conjunctival injection and tearing ............. N ....... 01 102, 103
339.09 ...... Other trigeminal autonomic cephalgias ....................................................................................... N ....... 01 102, 103
339.10 ...... Tension type headache, unspecified ........................................................................................... N ....... 01 102, 103
339.11 ...... Episodic tension type headache ................................................................................................. N ....... 01 102, 103
339.12 ...... Chronic tension type headache ................................................................................................... N ....... 01 102, 103
339.20 ...... Post-traumatic headache, unspecified ........................................................................................ N ....... 01 102, 103
339.21 ...... Acute post-traumatic headache ................................................................................................... N ....... 01 102, 103
339.22 ...... Chronic post-traumatic headache ............................................................................................... N ....... 01 102, 103
339.3 ........ Drug induced headache, not elsewhere classified ..................................................................... N ....... 01 102, 103
339.41 ...... Hemicrania continua .................................................................................................................... N ....... 01 102, 103
339.42 ...... New daily persistent headache ................................................................................................... N ....... 01 102, 103
339.43 ...... Primary thunderclap headache ................................................................................................... N ....... 01 102, 103
339.44 ...... Other complicated headache syndrome ..................................................................................... N ....... 01 102, 103
339.81 ...... Hypnic headache ......................................................................................................................... N ....... 01 102, 103
339.82 ...... Headache associated with sexual activity ................................................................................... N ....... 01 102, 103
339.83 ...... Primary cough headache ............................................................................................................ N ....... 01 102, 103
339.84 ...... Primary exertional headache ....................................................................................................... N ....... 01 102, 103
339.85 ...... Primary stabbing headache ......................................................................................................... N ....... 01 102, 103
339.89 ...... Other headache syndromes ........................................................................................................ N ....... 01 102, 103
346.02 ...... Migraine with aura, without mention of intractable migraine with status migrainosus ............... N ....... 01 102, 103
346.03 ...... Migraine with aura, with intractable migraine, so stated, with status migrainosus ..................... N ....... 01 102, 103
346.12 ...... Migraine without aura, without mention of intractable migraine with status migrainosus .......... N ....... 01 102, 103
346.13 ...... Migraine without aura, with intractable migraine, so stated, with status migrainosus ................ N ....... 01 102, 103
346.22 ...... Variants of migraine, not elsewhere classified, without mention of intractable migraine with N ....... 01 102, 103
status migrainosus.
346.23 ...... Variants of migraine, not elsewhere classified, with intractable migraine, so stated, with sta- N ....... 01 102, 103
tus migrainosus.
346.30 ...... Hemiplegic migraine, without mention of intractable migraine without mention of status N ....... 01 102, 103
migrainosus.
346.31 ...... Hemiplegic migraine, with intractable migraine, so stated, without mention of status N ....... 01 102, 103
migrainosus.
346.32 ...... Hemiplegic migraine, without mention of intractable migraine with status migrainosus ............ N ....... 01 102, 103
346.33 ...... Hemiplegic migraine, with intractable migraine, so stated, with status migrainosus .................. N ....... 01 102, 103
346.40 ...... Menstrual migraine, without mention of intractable migraine without mention of status N ....... 01 102, 103
migrainosus.
346.41 ...... Menstrual migraine, with intractable migraine, so stated, without mention of status N ....... 01 102, 103
migrainosus.
346.42 ...... Menstrual migraine, without mention of intractable migraine with status migrainosus .............. N ....... 01 102, 103
346.43 ...... Menstrual migraine, with intractable migraine, so stated, with status migrainosus .................... N ....... 01 102, 103
346.50 ...... Persistent migraine aura without cerebral infarction, without mention of intractable migraine N ....... 01 102, 103
without mention of status migrainosus.
346.51 ...... Persistent migraine aura without cerebral infarction, with intractable migraine, so stated, with- N ....... 01 102, 103
out mention of status migrainosus.
346.52 ...... Persistent migraine aura without cerebral infarction, without mention of intractable migraine N ....... 01 102, 103
with status migrainosus.
346.53 ...... Persistent migraine aura without cerebral infarction, with intractable migraine, so stated, with N ....... 01 102, 103
status migrainosus.
346.60 ...... Persistent migraine aura with cerebral infarction, without mention of intractable migraine with- CC .... 01 102, 103
out mention of status migrainosus.
346.61 ...... Persistent migraine aura with cerebral infarction, with intractable migraine, so stated, without CC .... 01 102, 103
mention of status migrainosus.
346.62 ...... Persistent migraine aura with cerebral infarction, without mention of intractable migraine with CC .... 01 102, 103
status migrainosus.
346.63 ...... Persistent migraine aura with cerebral infarction, with intractable migraine, so stated, with CC .... 01 102, 103
status migrainosus.
jlentini on PROD1PC65 with PROPOSALS2
346.70 ...... Chronic migraine without aura, without mention of intractable migraine without mention of N ....... 01 102, 103
status migrainosus.
346.71 ...... Chronic migraine without aura, with intractable migraine, so stated, without mention of status N ....... 01 102, 103
migrainosus.
346.72 ...... Chronic migraine without aura, without mention of intractable migraine with status N ....... 01 102, 103
migrainosus.
346.73 ...... Chronic migraine without aura, with intractable migraine, so stated, with status migrainosus .. N ....... 01 102, 103
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23843
346.82 ...... Other forms of migraine, without mention of intractable migraine with status migrainosus ....... N ....... 01 102, 103
346.83 ...... Other forms of migraine, with intractable migraine, so stated, with status migrainosus ............ N ....... 01 102, 103
362.20 ...... Retinopathy of prematurity, unspecified ...................................................................................... N ....... 02 124, 125
362.22 ...... Retinopathy of prematurity, stage 0 ............................................................................................ N ....... 02 124, 125
362.23 ...... Retinopathy of prematurity, stage 1 ............................................................................................ N ....... 02 124, 125
362.24 ...... Retinopathy of prematurity, stage 2 ............................................................................................ N ....... 02 124, 125
362.25 ...... Retinopathy of prematurity, stage 3 ............................................................................................ N ....... 02 124, 125
362.26 ...... Retinopathy of prematurity, stage 4 ............................................................................................ N ....... 02 124, 125
362.27 ...... Retinopathy of prematurity, stage 5 ............................................................................................ N ....... 02 124, 125
364.82 ...... Plateau iris syndrome .................................................................................................................. N ....... 02 124, 125
372.34 ...... Pingueculitis ................................................................................................................................. N ....... 02 124, 125
414.3 ........ Coronary atherosclerosis due to lipid rich plaque ....................................................................... N ....... 05 302, 303
511.81 ...... Malignant pleural effusion ........................................................................................................... CC .... 04 180, 181, 182
511.89 ...... Other specified forms of effusion, except tuberculous ................................................................ CC .... 04 186, 187, 188
15 791 2, 793 2
569.44 ...... Dysplasia of anus ........................................................................................................................ N ....... 06 393, 394, 395
571.42 ...... Autoimmune hepatitis .................................................................................................................. N ....... 07 441, 442, 443
599.70 ...... Hematuria, unspecified ................................................................................................................ N ....... 11 695, 696
15 791 2, 793 2
599.71 ...... Gross hematuria .......................................................................................................................... N ....... 11 695, 696
15 791 2, 793 2
599.72 ...... Microscopic hematuria ................................................................................................................. N ....... 11 695, 696
15 791 2, 793 2
611.81 ...... Ptosis of breast ............................................................................................................................ N ....... 09 600, 601
611.82 ...... Hypoplasia of breast .................................................................................................................... N ....... 09 600, 601
611.83 ...... Capsular contracture of breast implant ....................................................................................... N ....... 09 600, 601
611.89 ...... Other specified disorders of breast ............................................................................................. N ....... 09 600, 601
612.0 ........ Deformity of reconstructed breast ............................................................................................... N ....... 09 600, 601
612.1 ........ Disproportion of reconstructed breast ......................................................................................... N ....... 09 600, 601
625.70 ...... Vulvodynia, unspecified ............................................................................................................... N ....... 13 742, 743, 760,
761
625.71 ...... Vulvar vestibulitis ......................................................................................................................... N ....... 13 742, 743, 757,
758, 759
625.79 ...... Other vulvodynia .......................................................................................................................... N ....... 13 742, 743, 760,
761
649.70 ...... Cervical shortening, unspecified as to episode of care or not applicable .................................. CC .... 14 998
649.71 ...... Cervical shortening, delivered, with or without mention of antepartum condition ...................... CC .... 14 765, 766, 767,
768, 774, 775
649.73 ...... Cervical shortening, antepartum condition or complication ........................................................ CC .... 14 781, 782
678.00 ...... Fetal hematologic conditions, unspecified as to episode of care or not applicable ................... N ....... 14 998
678.01 ...... Fetal hematologic conditions, delivered, with or without mention of antepartum condition ....... N ....... 14 765, 766, 767,
768, 774, 775
678.03 ...... Fetal hematologic conditions, antepartum condition or complication ......................................... N ....... 14 781, 782
678.10 ...... Fetal conjoined twins, unspecified as to episode of care or not applicable ............................... N ....... 14 998
678.11 ...... Fetal conjoined twins, delivered, with or without mention of antepartum condition ................... N ....... 14 765, 766, 767,
768, 774, 775
678.13 ...... Fetal conjoined twins, antepartum condition or complication ..................................................... N ....... 14 781, 782
679.00 ...... Maternal complications from in utero procedure, unspecified as to episode of care or not ap- N ....... 14 765, 766, 767,
plicable. 768, 774, 775
679.01 ...... Maternal complications from in utero procedure, delivered, with or without mention of N ....... 14 765, 766, 767,
antepartum condition. 768, 774
679.02 ...... Maternal complications from in utero procedure, delivered, with mention of postpartum com- N ....... 14 765, 766, 767,
plication. 768, 774
679.03 ...... Maternal complications from in utero procedure, antepartum condition or complication ........... N ....... 14 781, 782
679.04 ...... Maternal complications from in utero procedure, postpartum condition or complication ........... N ....... 14 769, 776
679.10 ...... Fetal complications from in utero procedures, unspecified as to episode of care or not appli- N ....... 14 998
cable.
679.11 ...... Fetal complications from in utero procedures, delivered, with or without mention of N ....... 14 765, 766, 767,
antepartum condition. 768, 774, 775
679.12 ...... Fetal complications from in utero procedures, delivered, with mention of postpartum com- N ....... 14 765, 766, 767,
plication. 768, 774, 775
679.13 ...... Fetal complications from in utero procedures, antepartum condition or complication ............... N ....... 14 781, 782
679.14 ...... Fetal complications from in utero procedures, postpartum condition or complication ............... N ....... 14 769, 776
695.10 ...... Erythema multiforme, unspecified ............................................................................................... N ....... 09 595, 596
jlentini on PROD1PC65 with PROPOSALS2
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23844 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
695.51 ...... Exfoliation due to erythematous condition involving 10–19 percent of body surface ................ N ....... 09 606, 607
695.52 ...... Exfoliation due to erythematous condition involving 20–29 percent of body surface ................ N ....... 09 606, 607
695.53 ...... Exfoliation due to erythematous condition involving 30–39 percent of body surface ................ CC .... 09 606, 607
695.54 ...... Exfoliation due to erythematous condition involving 40–49 percent of body surface ................ CC .... 09 606, 607
695.55 ...... Exfoliation due to erythematous condition involving 50–59 percent of body surface ................ CC .... 09 606, 607
695.56 ...... Exfoliation due to erythematous condition involving 60–69 percent of body surface ................ CC .... 09 606, 607
695.57 ...... Exfoliation due to erythematous condition involving 70–79 percent of body surface ................ CC .... 09 606, 607
695.58 ...... Exfoliation due to erythematous condition involving 80–89 percent of body surface ................ CC .... 09 606, 607
695.59 ...... Exfoliation due to erythematous condition involving 90 percent or more of body surface ......... CC .... 09 606, 607
707.20 ...... Pressure ulcer, unspecified stage ............................................................................................... N ....... 09 573, 574, 575,
592, 593, 594
707.21 ...... Pressure ulcer, stage I ................................................................................................................ N ....... 09 573, 574, 575,
592, 593, 594
707.22 ...... Pressure ulcer, stage II ............................................................................................................... N ....... 09 573, 574, 575,
592, 593, 594
707.23 ...... Pressure ulcer, stage III .............................................................................................................. MCC 3 09 573, 574, 575,
592, 593, 594
707.24 ...... Pressure ulcer, stage IV .............................................................................................................. MCC 3 09 573, 574, 575,
592, 593, 594
729.90 ...... Disorders of soft tissue, unspecified ........................................................................................... N ....... 08 555, 556
729.91 ...... Post-traumatic seroma ................................................................................................................ N ....... 08 555, 556
729.92 ...... Nontraumatic hematoma of soft tissue ....................................................................................... N ....... 08 555, 556
729.99 ...... Other disorders of soft tissue ...................................................................................................... N ....... 08 555, 556
760.61 ...... Newborn affected by amniocentesis ........................................................................................... N ....... 15 794
760.62 ...... Newborn affected by other in utero procedure ........................................................................... N ....... 15 794
760.63 ...... Newborn affected by other surgical operations on mother during pregnancy ............................ N ....... 15 794
760.64 ...... Newborn affected by previous surgical procedure on mother not associated with pregnancy .. N ....... 15 794
777.50 ...... Necrotizing enterocolitis in newborn, unspecified ....................................................................... MCC 15 791 4, 793 4
777.51 ...... Stage I necrotizing enterocolitis in newborn ............................................................................... MCC 15 791 4, 793 4
777.52 ...... Stage II necrotizing enterocolitis in newborn .............................................................................. MCC 15 791 4, 793 4
777.53 ...... Stage III necrotizing enterocolitis in newborn ............................................................................. MCC 15 791 4, 793 4
780.72 ...... Functional quadriplegia ............................................................................................................... MCC 01 052, 053
788.91 ...... Functional urinary incontinence ................................................................................................... N ....... 11 695, 696
788.99 ...... Other symptoms involving urinary system .................................................................................. N ....... 11 695, 696
795.07 ...... Satisfactory cervical smear but lacking transformation zone ...................................................... N ....... 13 742, 743, 760,
761
795.10 ...... Abnormal glandular Papanicolaou smear of vagina ................................................................... N ....... 13 742, 743, 760,
761
795.11 ...... Papanicolaou smear of vagina with atypical squamous cells of undetermined significance N ....... 13 742, 743, 760,
(ASC–US). 761
795.12 ...... Papanicolaou smear of vagina with atypical squamous cells cannot exclude high grade squa- N ....... 13 742, 743, 760,
mous intraepithelial lesion (ASC–H). 761
795.13 ...... Papanicolaou smear of vagina with low grade squamous intraepithelial lesion (LGSIL) ........... N ....... 13 742, 743, 760,
761
795.14 ...... Papanicolaou smear of vagina with high grade squamous intraepithelial lesion (HGSIL) ......... N ....... 13 742, 743, 760,
761
795.15 ...... Vaginal high risk human papillomavirus (HPV) DNA test positive ............................................. N ....... 13 742, 743, 760,
761
795.16 ...... Papanicolaou smear of vagina with cytologic evidence of malignancy ...................................... N ....... 13 742, 743, 760,
761
795.18 ...... Unsatisfactory vaginal cytology smear ........................................................................................ N ....... 13 742, 743, 760,
761
795.19 ...... Other abnormal Papanicolaou smear of vagina and vaginal HPV ............................................. N ....... 13 742, 743, 760,
761
796.70 ...... Abnormal glandular Papanicolaou smear of anus ...................................................................... N ....... 06 393, 394, 395
796.71 ...... Papanicolaou smear of anus with atypical squamous cells of undetermined significance N ....... 06 393, 394, 395
(ASC–US).
796.72 ...... Papanicolaou smear of anus with atypical squamous cells cannot exclude high grade squa- N ....... 06 393, 394, 395
mous intraepithelial lesion (ASC–H).
796.73 ...... Papanicolaou smear of anus with low grade squamous intraepithelial lesion (LGSIL) ............. N ....... 06 393, 394, 395
796.74 ...... Papanicolaou smear of anus with high grade squamous intraepithelial lesion (HGSIL) ........... N ....... 06 393, 394, 395
796.75 ...... Anal high risk human papillomavirus (HPV) DNA test positive .................................................. N ....... 06 393, 394, 395
796.76 ...... Papanicolaou smear of anus with cytologic evidence of malignancy ......................................... N ....... 06 393, 394, 395
796.77 ...... Satisfactory anal smear but lacking transformation zone ........................................................... N ....... 06 393, 394, 395
jlentini on PROD1PC65 with PROPOSALS2
796.78 ...... Unsatisfactory anal cytology smear ............................................................................................ N ....... 06 393, 394, 395
796.79 ...... Other abnormal Papanicolaou smear of anus and anal HPV .................................................... N ....... 06 393, 394, 395
997.31 ...... Ventilator associated pneumonia ................................................................................................ CC .... 04 205, 206
15 791 2, 793 2
997.39 ...... Other respiratory complications ................................................................................................... CC .... 04 205, 206
15 791 2, 793 2
998.30 ...... Disruption of wound, unspecified ................................................................................................ CC .... 21 919, 920, 921
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23845
998.33 ...... Disruption of traumatic wound repair .......................................................................................... CC .... 21 919, 920, 921
999.81 ...... Extravasation of vesicant chemotherapy .................................................................................... CC .... 05 314, 315, 316
15 791 2, 793 2
999.82 ...... Extravasation of other vesicant agent ......................................................................................... CC .... 05 314, 315, 316
15 791 2, 793 2
999.88 ...... Other infusion reaction ................................................................................................................ N ....... 05 314, 315, 316
15 791 2, 793 2
999.89 ...... Other transfusion reaction ........................................................................................................... N ....... 15 791 2, 793 2
16 811, 812
V07.51 ...... Prophylactic use of selective estrogen receptor modulators (SERMs) ...................................... N ....... 23 951
V07.52 ...... Prophylactic use of aromatase inhibitors .................................................................................... N ....... 23 951
V07.59 ...... Prophylactic use of other agents affecting estrogen receptors and estrogen levels .................. N ....... 23 951
V13.51 ...... Personal history of pathologic fracture ........................................................................................ N ....... 23 951
V13.52 ...... Personal history of stress fracture .............................................................................................. N ....... 23 951
V13.59 ...... Personal history of other musculoskeletal disorders .................................................................. N ....... 23 951
V15.21 ...... Personal history of undergoing in utero procedure during pregnancy ....................................... N ....... 23 951
V15.22 ...... Personal history of undergoing in utero procedure while a fetus ............................................... N ....... 23 951
V15.29 ...... Personal history of surgery to other organs ................................................................................ N ....... 23 951
V15.51 ...... Personal history of traumatic fracture ......................................................................................... N ....... 23 951
V15.59 ...... Personal history of other injury ................................................................................................... N ....... 23 951
V23.85 ...... Pregnancy resulting from assisted reproductive technology ...................................................... N ....... 14 998
V23.86 ...... Pregnancy with history of in utero procedure during previous pregnancy ................................. N ....... 14 998
V28.81 ...... Encounter for fetal anatomic survey ........................................................................................... N ....... 23 951
V28.82 ...... Encounter for screening for risk of pre-term labor ...................................................................... N ....... 23 951
V28.89 ...... Other specified antenatal screening ............................................................................................ N ....... 23 951
V45.11 ...... Renal dialysis status .................................................................................................................... N ....... 23 951
V45.12 ...... Noncompliance with renal dialysis .............................................................................................. N ....... 23 951
V45.87 ...... Transplanted organ removal status ............................................................................................. N ....... 23 951
V46.3 ........ Wheelchair dependence .............................................................................................................. N ....... 23 951
V51.0 ........ Encounter for breast reconstruction following mastectomy ........................................................ N ....... 09 606, 607
V51.8 ........ Other aftercare involving the use of plastic surgery ................................................................... N ....... 09 606, 607
V87.01 ...... Contact with and (suspected) exposure to arsenic ..................................................................... N ....... 23 951
V87.09 ...... Contact with and (suspected) exposure to other hazardous metals .......................................... N ....... 23 951
V87.11 ...... Contact with and (suspected) exposure to aromatic amines ...................................................... N ....... 23 951
V87.12 ...... Contact with and (suspected) exposure to benzene .................................................................. N ....... 23 951
V87.19 ...... Contact with and (suspected) exposure to other hazardous aromatic compounds ................... N ....... 23 951
V87.2 ........ Contact with and (suspected) exposure to other potentially hazardous chemicals ................... N ....... 23 951
V87.31 ...... Contact with and (suspected) exposure to mold ........................................................................ N ....... 23 951
V87.39 ...... Contact with and (suspected) exposure to other potentially hazardous substances ................. N ....... 23 951
V87.41 ...... Personal history of antineoplastic chemotherapy ....................................................................... N ....... 23 949, 950
V87.42 ...... Personal history of monoclonal drug therapy ............................................................................. N ....... 23 949, 950
V87.49 ...... Personal history of other drug therapy ........................................................................................ N ....... 23 949, 950
V88.01 ...... Acquired absence of both cervix and uterus .............................................................................. N ....... 13 742, 743, 760,
761
V88.02 ...... Acquired absence of uterus with remaining cervical stump ....................................................... N ....... 13 742, 743, 760,
761
V88.03 ...... Acquired absence of cervix with remaining uterus ..................................................................... N ....... 13 742, 743, 760,
761
V89.01 ...... Suspected problem with amniotic cavity and membrane not found ........................................... N ....... 23 951
V89.02 ...... Suspected placental problem not found ...................................................................................... N ....... 23 951
V89.03 ...... Suspected fetal anomaly not found ............................................................................................. N ....... 23 951
V89.04 ...... Suspected problem with fetal growth not found .......................................................................... N ....... 23 951
V89.05 ...... Suspected cervical shortening not found .................................................................................... N ....... 23 951
V89.09 ...... Other suspected maternal and fetal condition not found ............................................................ N ....... 23 951
1 Secondary diagnosis of acute leukemia
2 Secondary diagnosis of major problem.
3 The pressure ulcer site specific codes (707.00–707.09) will be non-CCs. The pressure ulcer stage III and IV codes will be classified as
MCCs.
4 Principal or secondary diagnosis of major problem.
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23846 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
17.11 ........ Laparoscopic repair of direct inguinal hernia with graft or prosthesis ........................................ Y ....... 06 350, 351, 352
17.12 ........ Laparoscopic repair of indirect inguinal hernia with graft or prosthesis ..................................... Y ....... 06 350, 351, 352
17.13 ........ Laparoscopic repair of inguinal hernia with graft or prosthesis, not otherwise specified ........... Y ....... 06 350, 351, 352
17.21 ........ Laparoscopic bilateral repair of direct inguinal hernia with graft or prosthesis .......................... Y ....... 06 350, 351, 352
17.22 ........ Laparoscopic bilateral repair of indirect inguinal hernia with graft or prosthesis ....................... Y ....... 06 350, 351, 352
17.23 ........ Laparoscopic bilateral repair of inguinal hernia, one direct and one indirect, with graft or Y ....... 06 350, 351, 352
prosthesis.
17.24 ........ Laparoscopic bilateral repair of inguinal hernia with graft or prosthesis, not otherwise speci- Y ....... 06 350, 351, 352
fied.
17.31 ........ Laparoscopic multiple segmental resection of large intestine .................................................... Y ....... 06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
17.32 ........ Laparoscopic cecectomy ............................................................................................................. Y ....... 05 264
06 329, 330, 331
21 907, 908, 909
24 957, 958, 959
17.33 ........ Laparoscopic right hemicolectomy .............................................................................................. Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
17.34 ........ Laparoscopic resection of transverse colon ................................................................................ Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
17.35 ........ Laparoscopic left hemicolectomy ................................................................................................ Y ....... 05 264
06 329, 330, 331
10 628, 629, 630
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
17.36 ........ Laparoscopic sigmoidectomy ...................................................................................................... Y ....... 06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
17.39 ........ Other laparoscopic partial excision of large intestine ................................................................. Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
37.36 ........ Excision or destruction of left atrial appendage (LAA) ............................................................... N.
37.55 ........ Removal of internal biventricular heart replacement system ...................................................... Y ....... PRE 001, 002
05 237, 238
38.23 ........ Intravascular spectroscopy .......................................................................................................... N.
45.81 ........ Laparoscopic total intra-abdominal colectomy ............................................................................ Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
45.82 ........ Open total intra-abdominal colectomy ......................................................................................... Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
jlentini on PROD1PC65 with PROPOSALS2
45.83 ........ Other and unspecified total intra-abdominal colectomy .............................................................. Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
48.40 ........ Pull-through resection of rectum, not otherwise specified .......................................................... Y ....... 06 332, 333, 334
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23848 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
............
45.8 .......... Total intra-abdominal colectomy ................................................................................................. Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
48.5 .......... Abdominoperineal resection of rectum ........................................................................................ Y ....... 06 332, 333, 334
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
53.7 .......... Repair of diaphragmatic hernia, abdominal approach ................................................................ Y ....... 04 163, 164, 165
06 326, 327, 328
21 907, 908, 909
24 957, 958, 959
203.00 ...... Multiple myeloma, without mention of having achieved remission ............................................. CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23849
203.10 ...... Plasma cell leukemia, without mention of having achieved remission ....................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
203.80 ...... Other immunoproliferative neoplasms, without mention of having achieved remission ............. CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
204.00 ...... Acute lymphoid leukemia, without mention of having achieved remission ................................. CC .... 17 820, 821, 822,
834, 835, 836,
837 1, 838 1,
839 1
204.10 ...... Chronic lymphoid leukemia, without mention of having achieved remission ............................. CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
204.20 ...... Subacute lymphoid leukemia, without mention of having achieved remission ........................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
204.80 ...... Other lymphoid leukemia, without mention of having achieved remission ................................. CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
204.90 ...... Unspecified lymphoid leukemia, without mention of having achieved remission ....................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
205.00 ...... Acute myeloid leukemia, without mention of having achieved remission ................................... CC .... 17 820, 821, 822,
834, 835, 836,
837 1, 838 1,
839 1
205.10 ...... Chronic myeloid leukemia, without mention of having achieved remission ............................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
205.20 ...... Subacute myeloid leukemia, without mention of having achieved remission ............................. CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
205.30 ...... Myeloid sarcoma, without mention of having achieved remission .............................................. CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
205.80 ...... Other myeloid leukemia, without mention of having achieved remission ................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
205.90 ...... Unspecified myeloid leukemia, without mention of having achieved remission ......................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
206.00 ...... Acute monocytic leukemia, without mention of having achieved remission ............................... CC .... 17 820, 821, 822,
834, 835, 836,
837 1, 838 1,
839 1
206.10 ...... Chronic monocytic leukemia, without mention of having achieved remission ............................ CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
206.20 ...... Subacute monocytic leukemia, without mention of having achieved remission ......................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
206.80 ...... Other monocytic leukemia, without mention of having achieved remission ............................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
206.90 ...... Unspecified monocytic leukemia, without mention of having achieved remission ..................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
207.00 ...... Acute erythremia and erythroleukemia, without mention of having achieved remission ............ CC .... 17 820, 821, 822,
834, 835, 836,
837 1, 838 1,
839 1
207.10 ...... Chronic erythremia, without mention of having achieved remission .......................................... CC .... 17 820, 821, 822,
823, 824, 825,
jlentini on PROD1PC65 with PROPOSALS2
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23850 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
208.00 ...... Acute leukemia of unspecified cell type, without mention of having achieved remission .......... CC .... 17 820, 821, 822,
834, 835, 836,
837 1, 838 1,
839 1
208.10 ...... Chronic leukemia of unspecified cell type, without mention of having achieved remission ....... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
208.20 ...... Subacute leukemia of unspecified cell type, without mention of having achieved remission .... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
208.80 ...... Other leukemia of unspecified cell type, without mention of having achieved remission .......... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
208.90 ...... Unspecified leukemia, without mention of having achieved remission ....................................... CC .... 17 820, 821, 822,
823, 824, 825,
840, 841, 842
346.00 ...... Migraine with aura, without mention of intractable migraine without mention of status N ....... 01 102, 103
migrainosus.
346.01 ...... Migraine with aura, with intractable migraine, so stated, without mention of status N ....... 01 102, 103
migrainosus.
346.10 ...... Migraine without aura, without mention of intractable migraine without mention of status N ....... 01 102, 103
migrainosus.
346.11 ...... Migraine without aura, with intractable migraine, so stated, without mention of status N ....... 01 102, 103
migrainosus.
346.20 ...... Variants of migraine, not elsewhere classified, without mention of intractable migraine without N ....... 01 102, 103
mention of status migrainosus.
346.21 ...... Variants of migraine, not elsewhere classified, with intractable migraine, so stated, without N ....... 01 102, 103
mention of status migrainosus.
346.80 ...... Other forms of migraine, without mention of intractable migraine without mention of status N ....... 01 102, 103
migrainosus.
346.81 ...... Other forms of migraine, with intractable migraine, so stated, without mention of status N ....... 01 102, 103
migrainosus.
386.00 ...... Ménière’s disease, unspecified ................................................................................................... N ....... 03 149
386.01 ...... Active Ménière’s disease, cochleovestibular ............................................................................... N ....... 03 149
386.02 ...... Active Ménière’s disease, cochlear ............................................................................................. N ....... 03 149
386.03 ...... Active Ménière’s disease, vestibular ........................................................................................... N ....... 03 149
386.04 ...... Inactive Ménière’s disease .......................................................................................................... N ....... 03 149
707.00 ...... Pressure ulcer, unspecified site .................................................................................................. N 2 ..... 09 573, 574, 575,
592, 593, 594
707.01 ...... Pressure ulcer, elbow .................................................................................................................. N 2 ..... 09 573, 574, 575,
592, 593, 594
707.02 ...... Pressure ulcer, upper back ......................................................................................................... N 2 ..... 09 573, 574, 575,
592, 593, 594
707.03 ...... Pressure ulcer, lower back .......................................................................................................... N 2 ..... 09 573, 574, 575,
592, 593, 594
707.04 ...... Pressure ulcer, hip ...................................................................................................................... N 2 ..... 09 573, 574, 575,
592, 593, 594
707.05 ...... Pressure ulcer, buttock ................................................................................................................ N 2 ..... 09 573, 574, 575,
592, 593, 594
707.06 ...... Pressure ulcer, ankle ................................................................................................................... N 2 ..... 09 573, 574, 575,
592, 593, 594
707.07 ...... Pressure ulcer, heel .................................................................................................................... N 2 ..... 09 573, 574, 575,
592, 593, 594
707.09 ...... Pressure ulcer, other site ............................................................................................................ N 2 ..... 09 573, 574, 575,
592, 593, 594
776.9 ........ Unspecified hematological disorder specific to newborn ............................................................ N ....... 15 794
795.08 ...... Unsatisfactory cervical cytology smear ....................................................................................... N ....... 13 742, 743, 760,
761
998.31 ...... Disruption of internal operation (surgical) wound ....................................................................... CC .... 21 919, 920, 921
V28.3 ........ Encounter for routine screening for malformation using ultrasonics .......................................... N ....... 23 951
V45.71 ...... Acquired absence of breast and nipple ...................................................................................... N ....... 23 951
jlentini on PROD1PC65 with PROPOSALS2
1
Secondary diagnosis of acute leukemia.
2
The pressure ulcer site specific codes (707.00–707.09) will be non-CCs. The pressure ulcer stage III and IV codes will be classified as
MCCs.
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23851
37.52 ........ Implantation of internal biventricular heart replacement system ................................................ Y ....... PRE 001 1, 002 1
37.53 ........ Replacement or repair of thoracic unit of (total) replacement heart system .............................. Y ....... 05 215
37.54 ........ Replacement or repair of other implantable component of (total) replacement heart system ... Y ....... 05 215
45.71 ........ Open and other multiple segmental resection of large intestine ................................................ Y ....... 06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
45.72 ........ Open and other cecectomy ......................................................................................................... Y ....... 05 264
06 329, 330, 331
21 907, 908, 909
24 957, 958, 959
45.73 ........ Open and other right hemicolectomy .......................................................................................... Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
45.74 ........ Open and other resection of transverse colon ............................................................................ Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
45.75 ........ Open and other left hemicolectomy ............................................................................................ Y ....... 05 264
06 329, 330, 331
10 628, 629, 630
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
45.76 ........ Open and other sigmoidectomy .................................................................................................. Y ....... 06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
45.79 ........ Other and unspecified partial excision of large intestine ............................................................ Y ....... 05 264
06 329, 330, 331
17 820, 821, 822,
826, 827, 828
21 907, 908, 909
24 957, 958, 959
53.01 ........ Other and open repair of direct inguinal hernia .......................................................................... Y ....... 06 350, 351, 352
53.02 ........ Other and open repair of indirect inguinal hernia ....................................................................... Y ....... 06 350, 351, 352
53.03 ........ Other and open repair of direct inguinal hernia with graft or prosthesis .................................... Y ....... 06 350, 351, 352
53.04 ........ Other and open repair of indirect inguinal hernia with graft or prosthesis ................................. Y ....... 06 350, 351, 352
53.11 ........ Other and open bilateral repair of direct inguinal hernia ............................................................ Y ....... 06 350, 351, 352
53.12 ........ Other and open bilateral repair of indirect inguinal hernia ......................................................... Y ....... 06 350, 351, 352
53.13 ........ Other and open bilateral repair of inguinal hernia, one direct and one indirect ......................... Y ....... 06 350, 351, 352
53.14 ........ Other and open bilateral repair of direct inguinal hernia with graft or prosthesis ...................... Y ....... 06 350, 351, 352
53.15 ........ Other and open bilateral repair of indirect inguinal hernia with graft or prosthesis ................... Y ....... 06 350, 351, 352
53.16 ........ Other and open bilateral repair of inguinal hernia, one direct and one indirect, with graft or Y ....... 06 350, 351, 352
prosthesis.
53.41 ........ Other and open repair of umbilical hernia with graft or prosthesis ............................................ Y ....... 06 353, 354, 355
53.49 ........ Other open umbilical herniorrhaphy ............................................................................................ Y ....... 06 353, 354, 355
21 907, 908, 909
24 957, 958, 959
53.61 ........ Other open incisional hernia repair with graft or prosthesis ....................................................... Y ....... 06 353, 354, 355
21 907, 908, 909
24 957, 958, 959
53.69 ........ Other and open repair of other hernia of anterior abdominal wall with graft or prosthesis ....... Y ....... 06 353, 354, 355
81.65 ........ Percutaneous vertebroplasty ....................................................................................................... Y ....... 08 515, 516, 517
jlentini on PROD1PC65 with PROPOSALS2
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23852 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00326 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23853
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00327 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23854 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00328 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23855
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00329 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23856 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00330 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23857
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00331 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23858 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00332 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23859
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00333 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23860 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00334 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23861
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00335 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23862 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7A.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V25.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS-DRG discharges mean LOS percentile percentile percentile percentile percentile
11,387,276
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00336 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23863
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00337 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23864 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00338 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23865
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00339 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23866 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00340 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23867
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00341 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23868 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00342 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23869
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00343 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23870 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00344 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23871
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00345 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23872 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00346 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23873
TABLE 7B.—MEDICARE PROSPECTIVE PAYMENT SYSTEM SELECTED PERCENTILE LENGTHS OF STAY: FY 2007 MEDPAR
UPDATE—DECEMBER 2007 GROUPER V26.0 MS–DRGS—Continued
Number of Arithmetic 10th 25th 50th 75th 90th
MS–DRG discharges mean LOS percentile percentile percentile percentile percentile
11,387,276
North Dakota ........ 0.428 0.457 District of Columbia .................... 0.022 Vermont ...................................... 0.045
Ohio ...................... 0.338 0.522 Florida ......................................... 0.022 Virginia ........................................ 0.036
Oklahoma ............. 0.293 0.383 Georgia ....................................... 0.028 Washington ................................. 0.03
Oregon .................. 0.452 0.415 Hawaii ......................................... 0.03 West Virginia .............................. 0.034
Pennsylvania ........ 0.267 0.413 Idaho ........................................... 0.038 Wisconsin ................................... 0.037
Puerto Rico * ......... 0.474 .................. Illinois .......................................... 0.026 Wyoming ..................................... 0.044
Rhode Island * ...... 0.388 .................. Indiana ........................................ 0.037
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00347 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23874 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23875
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00349 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23876 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00350 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23877
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00351 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
23878 Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules
VerDate Aug<31>2005 19:42 Apr 29, 2008 Jkt 214001 PO 00000 Frm 00352 Fmt 4701 Sfmt 4702 E:\FR\FM\30APP2.SGM 30APP2
Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23879
180002 ................................................................................................................................ 18 49
180005 ................................................................................................................................ 18 26580
180011 ................................................................................................................................ 18 30460
180012 ................................................................................................................................ 21060 31140
180013 ................................................................................................................................ 14540 34980
180017 ................................................................................................................................ 18 21060
180024 ................................................................................................................................ 18 31140
180027 ................................................................................................................................ 18 17300
180029 ................................................................................................................................ 18 30460
180043 ................................................................................................................................ 18 44
180044 ................................................................................................................................ 18 26580
180048 ................................................................................................................................ 18 31140
180049 ................................................................................................................................ 18 30460
180050 ................................................................................................................................ 18 28700
180066 ................................................................................................................................ 18 34980
180069 ................................................................................................................................ 18 26580
180078 ................................................................................................................................ 18 26580
180080 ................................................................................................................................ 18 28940
180093 ................................................................................................................................ 18 21780
180102 ................................................................................................................................ 18 17300
180104 ................................................................................................................................ 18 17300
180116 ................................................................................................................................ 18 14
180124 ................................................................................................................................ 14540 34980
180127 ................................................................................................................................ 18 31140
180132 ................................................................................................................................ 18 30460
190003 ................................................................................................................................ 19 29180
190015 ................................................................................................................................ 19 35380
190017 ................................................................................................................................ 19 29180
190086 ................................................................................................................................ 19 33740
190088 ................................................................................................................................ 19 43340
190106 ................................................................................................................................ 19 10780
190144 ................................................................................................................................ 19 43340
190164 ................................................................................................................................ 19 10780
190167 ................................................................................................................................ 19 29180
190184 ................................................................................................................................ 19 33740
190191 ................................................................................................................................ 19 29180
190208 ................................................................................................................................ 19 04
190218 ................................................................................................................................ 19 43340
190257 ................................................................................................................................ 19 33740
200020 ................................................................................................................................ 38860 40484
200024 ................................................................................................................................ 30340 38860
200034 ................................................................................................................................ 30340 38860
200039 ................................................................................................................................ 20 38860
200050 ................................................................................................................................ 20 12620
220001 ................................................................................................................................ 49340 14484
220002 ................................................................................................................................ 15764 14484
220008 ................................................................................................................................ 39300 14484
220010 ................................................................................................................................ 37764 14484
220011 ................................................................................................................................ 15764 14484
220019 ................................................................................................................................ 49340 14484
220020 ................................................................................................................................ 39300 14484
220025 ................................................................................................................................ 49340 14484
220029 ................................................................................................................................ 37764 14484
220033 ................................................................................................................................ 37764 14484
220035 ................................................................................................................................ 37764 14484
220049 ................................................................................................................................ 15764 14484
220058 ................................................................................................................................ 49340 14484
220062 ................................................................................................................................ 49340 14484
220063 ................................................................................................................................ 15764 14484
220070 ................................................................................................................................ 15764 14484
220073 ................................................................................................................................ 39300 14484
220074 ................................................................................................................................ 39300 14484
220077 ................................................................................................................................ 44140 25540
220080 ................................................................................................................................ 37764 14484
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Proposed Rules 23881