[Federal Register Volume 59, Number 4 (Thursday, January 6, 1994)]
[Notices]
[Pages 762-767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-62]


[[Page Unknown]]

[Federal Register: January 6, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
[BPD-795-NC]
RIN: 0938-AG56

 

Medicare Program; Schedule of Limits for Skilled Nursing Facility 
Inpatient Routine Service Costs

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Final notice with comment period.

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

SUMMARY: This final notice with comment period provides that there will 
be no changes in the skilled nursing facility (SNF) cost limits for 
cost reporting periods beginning during Federal fiscal years 1994 and 
1995 and that the add-on for administrative and general costs of 
hospital-based SNFs is eliminated. This notice announces provisions of 
the Omnibus Budget Reconciliation Act of 1993 that affect the schedule 
of limits on SNF routine service costs for which payment may be made 
under the Medicare program and explains the effects of these provisions 
on the methodology used in calculating the SNF cost limits.

DATES: Effective date: The provisions set forth in this notice are 
effective for cost reporting periods beginning on or after October 1, 
1993.
    Comment date: Written comments will be considered if we receive 
them at the appropriate address, as provided below, no later than 5 
p.m. on [March 7, 1994].

ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address:

Health Care Financing Administration Department of Health and Human 
Services Attention: BPD-795-NC, P.O. Box 7571, Baltimore Maryland 
21207-0517.

    If you prefer, you may deliver your comments to one of the 
following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Ave. SW., 
Washington DC 20201, or
Room 132, East High Rise Building 6325 Security Boulevard Baltimore 
Maryland 21207.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-795-NC. Comments received timely will be available for 
public inspection as they are received, beginning approximately three 
weeks after publication of a document, in room 309-G of the 
Department's offices at 200 Independence Avenue SW., Washington DC, on 
Monday through Friday of each week from 8:30 a.m. to 5:00 p.m. (Phone: 
202-690-7890).
    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order payable to 
the Superintendent of Documents, or enclose your Visa or MasterCard 
number and expiration date. Credit card orders can also be placed by 
calling the order desk at (202) 783-3238 or by faxing to (202) 275-
6802. The cost for each copy (in paper or microfiche form) is $4.50. As 
an alternative, you can view and photocopy the Federal Register 
document at most libraries designated as U.S. Government Depository 
Libraries and at many other public and academic libraries throughout 
the country that receive the Federal Register.

FOR FURTHER INFORMATION CONTACT: Laurence Wilson, (410) 966-4603

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 1861(v)(1)(A) and 1888 of the Social Security Act (the 
Act) authorize the Secretary to set limits on allowable costs incurred 
by a provider of services for which payment may be made under Medicare. 
These limits are based on estimates of the costs necessary for the 
efficient delivery of needed health services. Implementing regulations 
appear at 42 CFR 413.30. Section 1888 of the Act directs the Secretary 
to set limits on per diem inpatient routine service costs for hospital-
based and freestanding skilled nursing facilities (SNFs) by urban or 
rural area location. Section 4008(e)(2) of the Omnibus Budget 
Reconciliation Act of 1990 (Pub. L. 101-508) amended section 1888(a) of 
the Act to require the Secretary to update the per diem SNF cost limits 
for cost reporting periods beginning on or after October 1, 1992, and 
every 2 years thereafter.
    Under the authority of section 1888 of the Act, we published a 
final notice on October 7, 1992 (57 FR 46177) announcing a schedule of 
limits for freestanding and hospital-based SNFs effective for cost 
reporting periods beginning on or after October 1, 1992. The limits 
were computed using data from cost reporting periods ending on or after 
June 30, 1989, through May 31, 1990, for freestanding SNFs and from 
cost reporting periods ending on or after October 31, 1988, through 
September 30, 1989, for hospital-based SNFs.
    The October 7, 1992 final notice contained provisions relating to:
    (1) Separate group limits for labor-related and nonlabor-related 
components of SNF per diem routine service costs;
    (2) Adjustments to the cost limits by an area wage index developed 
from hospital industry wages;
    (3) A ``market basket'' index developed to reflect changes in the 
price of goods and services purchased by SNFs;
    (4) Application of the adjusted hospital wage index to wages, 
employee benefits, health service costs, costs of business services, 
and other miscellaneous expenses;
    (5) Freestanding SNF cost limits set at 112 percent of the average 
per diem labor-related and nonlabor-related costs;
    (6) Hospital-based SNF cost limits set at the limit for 
freestanding SNFs, plus 50 percent of the difference between the 
freestanding limit and 112 percent of the average per diem routine 
service costs of hospital-based SNFs, and an add-on for administrative 
and general (A&G) costs;
    (7) Cost-of-living adjustments for Alaska, Hawaii, Puerto Rico, and 
the Virgin Islands;
    (8) Exceptions to the cost limits;
    (9) A classification system based on whether the SNF is hospital-
based or freestanding and whether it is located in an urban or rural 
area.
    In addition to the above provisions, the October 7, 1992 final 
notice also provided for a per diem add-on to recognize the costs 
incurred by SNFs in complying with the additional nursing home reform 
requirements of section 1819 of the Act (including the costs of 
conducting nurse aide training and competency evaluations). (Section 
1861(v)(1)(E) of the Act provides for Medicare payment for costs 
incurred by SNFs in complying with the requirements of section 1819 of 
the Act.) The October 7, 1992 notice also included an add-on to the 
cost limits to recognize the costs that SNFs may incur in meeting the 
universal precaution requirements of the Occupational Safety and Health 
Administration (OSHA). These requirements were described in a final 
rule published by OSHA in the Federal Register on December 6, 1991 (54 
FR 64004) that set forth a standard under section 6(b) of the 
Occupational Safety and Health Act of 1970 (29 U.S.C. 655) to eliminate 
or minimize occupational exposure to bloodborne pathogens.

II. Provisions of This Final Notice With Comment Period

A. No Changes in the Cost Limits

    On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993 
(OBRA '93), Public Law 103-66, was enacted. Section 13503(a)(1) of OBRA 
'93 requires that there be no changes in the SNF routine cost limits 
(except as may be necessary to take into account the elimination of the 
administrative and general add-on for hospital-based SNFs) for cost 
reporting periods beginning during Federal fiscal years (FY) 1994 and 
1995, that is, for cost reporting periods beginning on or after October 
1, 1993, and before October 1, 1995. The effect of this provision is 
that a SNF's latest routine cost limit for a period beginning on or 
after October 1, 1992 and before October 1, 1993, as calculated under 
the October 7, 1992 notice, without regard to any subsequent 
adjustments under section 1888(c) of the Act such as exceptions, will 
remain in effect until its cost reporting period beginning on or after 
October 1, 1995. Accordingly, there will be no changes to a SNF's cost 
limit for cost reporting periods beginning on or after October 1, 1993, 
and before October 1, 1995, to account for inflation, updates of the 
data, changes to the wage index or to MSA designations. Thus, in 
computing a provider's cost limit for cost reporting periods beginning 
on or after October 1, 1993 and before October 1, 1995, the cost 
reporting period adjustment factors that were to apply for cost 
reporting periods beginning on or after October 1, 1993, as set forth 
in Table IV of the October 7, 1992 notice (57 FR 46188), will not be 
used. Other components of the October 7, 1992 notice, specifically the 
SNF Group Limits in Table I, and the wage indexes in Tables II and III 
will continue to be used to compute the limits, with the exception in 
Table I of the add-on for administrative and general costs of hospital-
based SNFs.
    In the example below, a freestanding SNF in Dallas, Texas has a 
cost reporting period beginning date of January 1, 1993. As calculated 
under the October 7, 1992 notice, its cost limit for the 12-month 
period beginning January 1, 1993 is $96.97. Under the provisions of 
this notice, the cost limit of $96.97 will remain in effect for its 12-
month cost reporting periods beginning January 1, 1994 and January 1, 
1995. As explained above, the cost reporting period adjustment factors 
that would have been used under the October 7, 1992 notice for 
calculating the limits for the SNF's new cost reporting periods 
beginning January 1, 1994 and January 1, 1995, are not used. 
Accordingly, the provider in this example will not have any change in 
its cost limit until its cost reporting period beginning January 1, 
1996.
    Example--Calculation of Adjusted Limit for a Freestanding SNF 
Located in Dallas, Texas (using the appropriate tables from the October 
7, 1992 schedule of limits): 

Labor-Related Component.......................................................          $79.56  (Table I).      
Wage Index....................................................................        x 0.9638  (Table II).     
                                                                                                                
                                                                               ----------------                 
Adjusted Labor Component......................................................          $76.68                  
Nonlabor-Related Component....................................................          +17.08  (Table I).      
Nursing Home Reform and OSHA Per Diem Add-On..................................          +1.98.                  
                                                                                                                
                                                                               ----------------                 
Limit Prior To Inflation Adjustment $95.74                                                                      
Adjustment Factor.............................................................       x 1.01286  (Table IV).     
                                                                                                                
                                                                               ----------------                 
Inflation Adjusted Limit......................................................         $96.97                   
                                                                                                                


    As noted above, for cost reporting periods beginning on or after 
October 1, 1993 but before October 1, 1995, a SNF's cost limit will be 
its latest routine cost limit for the period beginning on or after 
October 1, 1992 and before October 1, 1993, as calculated under the 
October 7, 1992 notice and without regard to any subsequent 
adjustments, such as an exception to the limit. Thus, if the SNF in the 
above example received an exception to its cost limit for its cost 
reporting period beginning January 1, 1993, its cost limit for the cost 
reporting period beginning January 1, 1994 would not include the 
exception amount for the previous period. To receive an exception or 
other adjustment to its cost limit, the SNF would need to submit a 
request to its fiscal intermediary in accordance with the procedures 
set forth in Sec. 413.30 of the regulations.

B. Periods Other Than 12 Months

    The above methodology applies to providers with cost reporting 
periods of 12 months in duration. If a facility's cost reporting period 
is not 12 months in duration, a special adjustment factor is 
calculated. This is necessary because inflation projections are 
computed to the midpoint of a cost reporting period, and the adjustment 
factors in Table IV are based on 12-month reporting periods. For cost 
reporting periods of other than 12 months, the calculation must be made 
based on the midpoint of the specific cost reporting period. The SNF's 
intermediary obtains this adjustment factor from HCFA central office. 
This methodology results in a different cost limit than if a 12-month 
adjustment factor were used. However, since the provisions of OBRA '93 
require no changes in the cost limit on or after October 1, 1993, the 
limit calculated with the special adjustment factor will remain in 
place for subsequent cost reporting periods beginning before October 1, 
1995.

C. Providers Entering the Medicare Program

    For providers entering the Medicare program on or after October 1, 
1993 and before October 1, 1995, the applicable cost limit will be the 
cost limit for the identical period beginning on or after October 1, 
1992 through September 30, 1993. For example, if a provider enters the 
Medicare program on September 1, 1994, with a 12-month cost reporting 
period, its cost limit will be determined in the same manner as a cost 
limit for a period beginning September 1, 1993 and ending August 30, 
1994. If the provider's cost reporting period is a short period 
beginning September 1, 1994 and ending December 31, 1994, the 
provider's cost limit will be determined in the same manner as a cost 
limit for a period beginning September 1, 1993 and ending December 31, 
1993. In addition, whether the first period is a full 12-month period 
or a period other than 12 months, the cost limit determined for the 
first period will remain in effect until the provider's first cost 
reporting period beginning on or after October 1, 1995.

D. Next Update of Limits

    As discussed above, before the enactment of OBRA '93, section 
1888(a) of the Act required that the SNF routine cost limits be updated 
on October 1, 1992 and every 2 years thereafter. Section 13503(a)(1) of 
OBRA '93 amended this section to delay the next update until October 1, 
1995, and every 2 years thereafter. Accordingly, there will be no 
changes to the routine cost limits published in the October 7, 1992 
notice for inflation, changes in the wage index, geographic 
designation, or for a more recent data base until October 1, 1995.

E. Add-On for Hospital-Based SNFs

    Before the enactment of OBRA '93, section 1888(b) of the Act 
provided for an add-on to recognize the cost differences between 
hospital-based and freestanding SNFs attributable to excess overhead 
allocations, that is, an add-on for the administrative and general 
costs (A&G) of hospital-based SNFs. Section 13503(a)(3) of OBRA '93 
amended this section of the Act to repeal the requirement that we 
recognize cost differences attributable to excess overhead allocations. 
Therefore, this notice implements that provision by eliminating the A&G 
add-on for hospital-based SNFs. In addition, while section 13503(a)(1) 
of OBRA '93 requires that there be no changes in the cost limits, as 
explained above, it also states that the provision does not apply to 
the elimination of the A&G add-on for hospital-based SNFs. Therefore, 
effective for cost reporting periods beginning on or after October 1, 
1993, we will no longer apply the administrative and general add-on for 
hospital-based SNFs as shown in Table I of the October 7, 1992 schedule 
of limits. The intermediary will continue to determine the cost limits 
for hospital-based SNFs using the relevant instructions and Table I SNF 
Group Limits, as described in the October 7, 1992 notice. However, for 
cost reporting periods beginning on or after October 1, 1993, these 
limits will be calculated without using the A&G add-on.
    The example below uses information from Table I of the October 7, 
1992 schedule of limits to calculate a cost limit for a hospital-based 
SNF located in Scranton, Pennsylvania. The cost limit is for a cost 
reporting period beginning October 1, 1993. However, as discussed 
above, the A&G add-on for hospital-based SNFs is no longer applied, and 
the cost limit effective October 1, 1992 remains in effect for the cost 
reporting period beginning on or after October 1, 1993.
    Example--Calculation of Adjusted Limit Effective October 1, 1993, 
for a Hospital-Based SNF Located in Scranton, Pennsylvania: 

Labor-Related Component Limit.................................................         $112.22  (Table I).      
Wage Index....................................................................        x 0.8952  (Table II).     
                                                                               ----------------                 
    Adjusted Labor Component..................................................         $100.46                  
    Nonlabor-Related Component:                                                                                 
        Limit.................................................................           23.79  (Table I).      
        Nursing Home Reform and OSHA Per Diem Add-on..........................           +1.98                  
                                                                               ----------------                 
        Adjusted Limit........................................................         $126.23                  
                                                                                                                


F. Adjustments to the Routine Limits

    Section 1888(c) of the Act provides for appropriate adjustments to 
the SNF routine cost limits. These adjustments are set forth at 
Sec. 413.30 and include: exemptions from the cost limits for new 
providers; exceptions to the limits for atypical services and 
extraordinary circumstances; and other provisions. Section 13503(a)(1) 
of OBRA '93 mandates that the effect of allowing no changes in the SNF 
routine cost limits for cost reporting periods beginning during FYs 
1994 and 1995 not be considered in making adjustments to the routine 
cost limits under the exceptions process. Therefore, effective for cost 
reporting periods beginning on or after October 1, 1993, and before 
October 1, 1995, a provider may request an exception only for costs 
incurred above the amount that the limit would have been had the 
provisions set forth in this notice regarding no changes in the cost 
limits not been enacted. Accordingly, for the purpose of determining 
the amount of an exception to the SNF routine cost limits under the 
regulations at Sec. 413.30(f), the difference between the amount of a 
provider's cost limit as determined by the provisions set forth in this 
notice, and the amount that a provider's cost limit would have been 
under the October 7, 1992 notice had the provisions described herein 
not been enacted, is not subject to an exception to the routine cost 
limits. We note that this provision does not apply to the A&G add-on 
for hospital-based SNFs. That is, for cost reporting periods beginning 
on or after October 1, 1993, the A&G add-on for hospital-based SNFs 
will not be used in computing the amount that the hospital-based cost 
limit would have been had the provisions requiring no changes in the 
limits not been enacted. In addition, we note that this provision has 
no effect on new provider exemptions to the SNF cost limits, as set 
forth under Sec. 413.30(e)(2), since this exemption removes the 
limitation on a SNF's routine costs.
    The example below demonstrates the computation to determine the 
amount not subject to an exception under the provisions set forth in 
this notice. The provider's cost limit is computed for the cost 
reporting period beginning January 1, 1993, in accordance with the 
provisions set forth in this notice, and this limit remains in effect 
until the cost reporting period beginning January 1, 1995. The provider 
has requested an exception to its limit for the period beginning 
January 1, 1994. Again, we use the information from the October 7, 1992 
notice to calculate what the limit would have been had the OBRA '93 
provisions requiring no changes in the limits not been enacted. The 
difference of $5.04 between the actual limit and the amount the limit 
would have been is the amount not subject to an exception.
    Example--Calculation of Amount Not Subject to an Exception to the 
Limits Freestanding SNF Located in Dallas, Texas: 

Labor-Related Component.......................................................          $79.56  (Table I).      
Wage Index....................................................................        x 0.9638  (Table II).     
                                                                               ----------------                 
Adjusted Labor Component......................................................          $76.68                  
Nonlabor-Related Component....................................................          +17.08  (Table I).      
Nursing Home Reform and OSHA Per Diem Add-On..................................           +1.98                  
                                                                                                                
                                                                               ----------------                 
Limit Prior To Inflation Adjustment...........................................          $95.74                  
Adjustment Factor (January 1, 1993)...........................................       x 1.01286  (Table IV).     
                                                                               ----------------                 
Inflation Adjusted Limit (Limit in Effect for January 1, 1993, January 1,               $96.97                  
 1994, January 1, 1995).                                                                                        
Adjustment Factor (January 1, 1994 for Exception Purposes Only)...............       x 1.06553  (Table IV).     
                                                                               ----------------                 
Inflation Adjusted Limit (January 1, 1994 for Exception Purposes Only)........         $102.01                  
Amount Not Subject to Exception ($102.01-$96.97)..............................           $5.04                  
                                                                                                                

III. Impact Statement

    Executive Order 12866 (E.O. 12866) requires us to prepare an 
analysis for any rule that meets one of the E.O. 12866 criteria for a 
``significant regulatory action''; that is, that may--
     Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
     Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
     Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
     Raise a novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
E.O. 12866.
    In addition for final notices such as this, we generally prepare a 
regulatory flexibility analysis that is consistent with the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601 through 612) unless the Secretary 
certifies that this notice will not have a significant economic impact 
on a substantial number of small entities. For purposes of the RFA, all 
SNFs are treated as small entities.
    This final notice with comment period announces the provisions of 
section 13503(a) of OBRA '93, which provides for a delay in the updates 
of the limits on payments for routine SNF services through cost 
reporting periods beginning before October 1, 1995, and provides for 
the elimination of the A&G add-on for hospital-based SNFs effective for 
cost reporting periods beginning on or after October 1, 1993. None of 
the provisions of this notice interprets or extends requirements beyond 
those set forth in OBRA '93.
    Sections 13503(a)(1) and (3) of OBRA '93 will result in significant 
Federal cost savings. The impact of these provisions is discussed 
further below. This notice explains the revised methodology for 
calculating the SNF limits that results from the provisions of OBRA 
'93. We do not believe that merely reflecting these provisions in this 
notice produces any effect that will meet any of the criteria of E.O. 
12866 for a significant regulatory action or will have a significant 
effect on a substantial number of small entities. Therefore, we have 
determined and the Secretary certifies that neither an impact analysis 
under E.O. 12866 nor a regulatory flexibility analysis under the RFA 
are required.
    To the extent that a legislative provision being announced by a 
notice such as this may have a significant effect on beneficiaries or 
providers or may be viewed as controversial, we believe that we should 
address any potential concerns. In this instance, we believe it is 
desirable to inform the public of our estimate of the substantial 
budgetary effect of these statutory changes. We estimate that these 
statutory provisions will result in the following savings to the 
Medicare program:

Table 1.--Impact of Delay in the Update of SNF Limits and Elimination of
                                 Add-on*                                
------------------------------------------------------------------------
                                                    Update   Elimination
                   Fiscal year                      delay     of add-on 
------------------------------------------------------------------------
1994............................................        $30         $10 
1995............................................        120          10 
1996............................................         90          10 
1997............................................  .........          10 
1998............................................  .........         10  
------------------------------------------------------------------------
*All figures are rounded to the nearest $10 million.                    


    As illustrated in Table 2 below, the delay in updating the cost 
limits until October 1, 1995, combined with the elimination of the A&G 
add-on for hospital-based SNFs, will result in a small increase in the 
number of SNFs exceeding the SNF limits in all categories, although we 
cannot isolate the separate impact of these factors. Table 2 below 
shows the combined impact of these changes. 

                                Table 2.                                
------------------------------------------------------------------------
                                           Exceeding old   Exceeding new
                            Total SNFs        limits          limits    
------------------------------------------------------------------------
Freestanding SNFs.......            5340             911            1209
    Urban...............            4074             706             930
    Rural...............            1266             205             279
Hospital-based SNFs.....             908             518             563
    Urban...............             455             298             321
    Rural...............             453             220            242 
------------------------------------------------------------------------

    We are unable to identify the effects of these provisions on 
individual SNFs. However, we anticipate that overall SNF payments for 
FY 1994 and FY 1995 will be approximately 1.2 percent and 2.3 percent 
less, respectively, than they would have been in those years if the 
OBRA '93 provisions were not in effect. Moreover, since Medicare does 
not account for a high proportion of SNF utilization or revenue, we 
estimate that the delay in updating the limits and the elimination of 
the hospital-based add-on will not result in a significant number of 
facilities' total revenues being increased or reduced by 3 percent or 
more from the October 7, 1992 limits, adjusted for inflation. Thus, we 
have determined that the economic impact on SNFs will not be 
significant.
    Section 1102(b) of the Act requires the Secretary to prepare a 
regulatory impact analysis if a final notice such as this may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. Such an analysis must conform to the provisions of 
section 604 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital with fewer than 100 beds 
located outside of a Metropolitan Statistical Area.
    We have not prepared a rural impact statement since we have 
determined and the Secretary certifies that this final notice will not 
have a significant economic impact on the operations of a substantial 
number of small rural hospitals.

IV. Other Required Information

A. Paperwork Reduction Act

    This final notice with comment period does not impose information 
collection requirements. Consequently, it need not be reviewed by the 
Office of Management and Budget under the authority of the Paperwork 
Reduction Act of 1980 (44 U.S.C. 3501 through 3511).

B. Waiver of Proposed Notice and 30-Day Delay in the Effective Date

    In adopting notices such as this, we ordinarily publish a proposed 
notice in the Federal Register with a 60-day period for public comment 
as required under section 1871(b)(1) of the Act. We also normally 
provide a delay of 30 days in the effective date for documents such as 
this. However, we may waive these procedures if we find good cause that 
prior notice and comment or a delay in the effective date are 
impracticable, unnecessary, or contrary to the public interest.
    As discussed above, before the enactment of OBRA '93, section 
1888(a) of the Act required that the SNF routine cost limits be updated 
for cost reporting periods beginning on or after October 1, 1992 and 
every 2 years thereafter. However, section 13503(a)(1) of OBRA '93 
specifies that there be no changes in the SNF cost limits for cost 
reporting periods beginning during FYs 1994 and 1995, and section 
13503(a)(2) of OBRA '93 amended section 1888 of the Act to delay the 
next required update of the SNF limits until October 1, 1995. In 
addition, section 13503(a)(3) of OBRA '93 amended section 1888(b) of 
the Act to eliminate, effective for cost reporting periods beginning on 
or after October 1, 1993, the add-on to the SNF cost limits to 
recognize the higher administrative and general costs of hospital-based 
SNFs.
    In conformance with the clear direction of section 13503(a) of OBRA 
'93, this notice announces the new SNF provisions and explains the 
effects of these provisions on the methodology used in calculating the 
SNF cost limits. We have made no changes in this methodology beyond 
those directly required by OBRA '93, nor are there any other 
discretionary aspects to this notice. Moreover, section 13503(a) of 
OBRA '93 mandates that these provisions are effective beginning with 
cost reporting periods beginning on or after October 1, 1993. Thus, we 
have concluded that in this instance, it would be impracticable, 
unnecessary, and contrary to the public interest to publish a proposed 
notice or to provide for a 30-day delay in the effective date of this 
notice. Therefore, we find good cause to waive publication of a 
proposed notice and the 30-day delay in effective date. However, we are 
providing a 60-day period for public comment, as indicated at the 
beginning of this preamble.

C. Public Comments

    Because of the large number of items of correspondence we normally 
receive, we are not able to acknowledge or respond to them 
individually. However, we will consider all comments that we receive by 
the date and time specified in the ``Date'' section of the preamble to 
this notice. If we make any changes to this notice, we will respond to 
the comments in the preamble to the notice that incorporates the 
changes.

    Authority: (Sections 1102, 1814(b), 1861(v)(1), 1866(a), 1871, 
and 1888 of the Social Security Act (42 U.S.C. 1302, 1395f(b), 
1395x(v)(1), 1395cc(a), 1395hh, and 1395yy); section 6024 of Pub. L. 
101-239 (42 U.S.C. 1395yy(note)); section 13503 of Pub. L. 103-66 
(42 U.S.C. 1395yy(note)) and 42 CFR 413.30.)

(Catalog of Federal Domestic Assistance Program No. 93.773 Medicare-
Hospital Insurance Program)

    Dated: November 23, 1993.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
    Dated: November 28, 1993.
Donna E. Shalala,
Secretary.
[FR Doc. 94-62 Filed 1-5-94; 8:45 am]
BILLING CODE 4120-01-P