[Federal Register Volume 59, Number 100 (Wednesday, May 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12461]


[[Page Unknown]]

[Federal Register: May 25, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 405, 406, 408, 410, 413, and 418

[BPD-791-FC]
RIN 0938-AG64

 

Medicare Program; Self-Implementing Coverage and Payment 
Provisions: 1993 Legislation

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

ACTION: Final rule with comment period.

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SUMMARY: This rule updates Medicare regulations to conform them to 
certain self-implementing provisions on coverage of services and 
payment requirements under the Omnibus Budget Reconciliation Act of 
1993 (OBRA 93). OBRA 93 was enacted on August 10, 1993 and several of 
the cited changes to the statute are already in effect and the others 
will be shortly. We are also implementing a related provision of the 
Omnibus Budget Reconciliation Act of 1990 (OBRA 90) as necessary for 
consistency and clarity of the OBRA 93 provisions.

DATES: Effective date: These regulations are effective June 24, 1994.
    Comment period: Comments will be considered if we receive them at 
the appropriate address, as provided below, no later than 5 p.m., July 
25, 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-791-FC, P.O. Box 26676, Baltimore, MD 21207.

    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to one of the following addresses:

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

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-791-FC. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 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 p.m. 
(phone: (202) 690-7890).

FOR FURTHER INFORMATION CONTACT: Matt Plonski, (410) 966-4662.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993 
(OBRA 93) (Pub. L. 103-66) was enacted. This law contains numerous 
provisions relating to coverage of services and payments for services 
furnished to Medicare beneficiaries. Some of these provisions are self-
implementing; that is, the provisions are stated in terms that neither 
require nor permit exercise of discretion in implementing them.
    The plain wording of the law causes a conflict with several of our 
existing regulations; in other cases, the regulations simply do not 
take the amendments into account. We are, therefore, making the 
necessary changes to incorporate the new provisions into regulations.
    A discussion of the individual legislative provisions and the 
accompanying regulations follows.

II. Reductions in Payments for Skilled Nursing Facility Services--
Elimination of Return on Equity for Proprietary Skilled Nursing 
Facilities

A. Legislative Provision

    Section 1861(v)(1)(B) of the Social Security Act (the Act) provides 
that proprietary skilled nursing facilities (SNFs) receive, in addition 
to payments for the costs of providing services, return on equity 
payments, which provide the investors in the facilities a return on 
their investment equivalent to what they would have earned had they 
invested the same amount in specified government securities. Section 
13503(c) of OBRA 93 amended sections 1861(v)(1)(B) and 1878(f)(2) of 
the Act to eliminate payments to SNFs for return on equity capital, 
applicable to portions of cost reporting periods beginning on or after 
October 1, 1993.

B. Regulations Revision

    We are revising Sec. 413.157(b)(3), Rate of return related to 
proprietary SNFs, to limit its application to services furnished before 
October 1, 1993.

III. Reductions in Payments for Hospice Services

A. Legislative Provision

    Under section 1814(i) of the Act, we pay for hospice services on a 
daily rate basis. Payments are adjusted by a market basket percentage 
increase. Section 13504 of OBRA 93 amended section 1814(i) of the Act 
to decrease the amount of the market basket (as defined by section 
1886(b)(3)(B)(iii) of the Act) percentage increase that will be applied 
in fiscal years (FY) 1994 through 1997. These decreases are:
    FY 1994--the market basket percentage increase minus 2 percentage 
points;
    FYs 1995 and 1996--the market basket percentage increase minus 1.5 
percentage points; and
    FY 1997--the market basket percentage increase minus .5 percentage 
points.
    After FY 1997, the full market basket percentage increase will 
again apply.

B. Regulations Revisions

    We are revising Sec. 418.306, Determination of payment rates, by 
updating paragraph (b)(2) to exclude FYs 1994 through 1997 from the 
application of the market basket percentage increase without 
modification and to add a new paragraph (b)(3) to add the statutory 
decreases.

IV. Reduction in Part A Premium for Certain Individuals With 30 or 
More Quarters of Social Security Coverage

A. Legislative Provision

    Under section 226(a) of the Act, individuals generally become 
entitled to benefits under Medicare Part A when they reach age 65 based 
on hospital insurance (Part A) taxes they paid under the Federal 
Insurance Contributions Act (FICA) while they were working. By paying 
the Part A portion of the FICA tax, individuals acquire quarters of 
coverage (QCs), which are used to insure them for Part A coverage. 
Insured individuals are not required to pay monthly premiums for Part A 
coverage. Under section 1818 of the Act, individuals age 65 or over who 
do not have enough QCs to be insured for premium-free Part A may enroll 
in the Part A program if they pay a monthly premium. The Part A premium 
is determined under section 1818(d) of the Act and is based on the 
actuarial value of benefits under Part A. In addition, under section 
1818A of the Act, disabled individuals who lose eligibility for 
premium-free Part A solely because they have returned to work may 
enroll in Part A if they pay a monthly premium, the amount of which is 
determined under section 1818(d).
    Section 13508 of OBRA 93 amended section 1818(d) to reduce, on a 
phased-in basis, the amount of the Part A premium for workers with 30 
or more QCs and for spouses (including surviving spouses) of these 
workers with 30 or more QCs after having been married at least one 
year. The reduction also applies to divorced spouses (including 
surviving divorced spouses) of workers with 30 or more QCs provided 
that, at the time the divorce became final, the worker had 30 or more 
QCs and the marriage had lasted for at least 10 years. The reductions 
are as follows:

1994--25 percent
1995--30 percent
1996--35 percent
1997--40 percent
1998 and later years--45 percent

The reduction will begin with premium payments beginning January 1994.

B. Regulations Revisions

    We are adding to Sec. 406.32, Monthly premiums, a new paragraph 
(b)(3) to show the year by year reductions required by the statute and 
a new paragraph (c) to show the requirements for qualifying for the 
reduction. We are redesignating paragraph (b)(3) as (b)(4) and revising 
its contents, which concern rounding off fractions of dollars, to 
specify that the paragraph applies to the unreduced and the reduced 
Part A premium. We are redesignating current paragraphs (c) through (f) 
as (d) through (g), respectively.

V. Extension of 10 Percent Reduction in Payments for Capital-
Related Costs of Outpatient Hospital Services

A. Legislative Provision

    Under 1861(v)(1)(S)(ii)(I) of the Act, Medicare pays the capital 
costs of hospitals allocated to outpatient departments on the basis of 
reasonable cost principles, subject to a 10 percent reduction through 
FY 1995. (Sole community hospitals and rural primary care hospitals are 
exempt from these reductions.) Section 13521 of OBRA 93 amended section 
1861(v)(1)(S)(ii)(I) of the Act to extend the 10 percent reduction 
through FY 1998.

B. Regulations Revisions

    We are revising Sec. 413.130(j)(1)(ii), Reduction to capital-
related costs, to extend to 1998 the year through which the 10 percent 
reduction applies.

VI. Extension of Reduction in Payments for Other Costs for 
Outpatient Hospital Services

A. Legislative Provision

    Under section 1861(v)(1)(S)(ii)(II) of the Act, Medicare payments 
for hospital outpatient services made on a reasonable cost basis and 
the cost portion of outpatient services paid on the basis of a blended 
amount are both reduced by 5.8 percent through FY 1995. Section 13522 
of OBRA 93 amended section 1861(v)(1)(S)(ii)(II) of the Act to extend 
the application of the reduction through FY 1998.

B. Regulations Revisions

    We are revising Sec. 413.124, Reduction to hospital outpatient 
operating costs, to extend to 1998 the year through which the 5.8 
percent reductions apply.

VII. Reduction in Payments for Intraocular Lenses

A. Legislative Provision

    Section 1833(i)(2)(A)(iii) of the Act includes in the cost of 
surgery to insert an intraocular lens during or after cataract surgery 
a payment that is reasonable and related to the cost of acquiring the 
class of lens involved. Section 4151 of Public Law 101-508 (the Omnibus 
Budget Reconciliation Act of 1990 (OBRA 90)) froze the amount of 
payment for the lens at $200. Section 13533 of OBRA 93 reduced the 
payment amount for intraocular lenses inserted during or after cataract 
surgery in an ambulatory surgical center on or after January 1, 1994 
and before January 1, 1999. For that period, the payment is $150.

B. Regulations Revisions

    Our regulations do not contain the specific amounts allowable for 
intraocular lenses, which are, instead, contained in our administrative 
guidelines. Therefore, we are making no changes to regulations to 
implement the legislation.

VIII. Payment for Parenteral and Enteral Nutrients, Supplies and 
Equipment During 1994 and 1995

A. Legislative Provision

    In the Omnibus Budget Reconciliation Act of 1986 (Public Law 99-
509), section 9340 provided that reasonable charges for parenteral and 
enteral nutrition supplies and equipment may not exceed the lowest 
charge levels at which the supplies and equipment are widely and 
consistently available. Under our regulations at 42 CFR 405.511(c) 
those levels are set at the 25th percentile of the charges for the 
items or services, in the locality designated by the carrier for this 
purpose, during the three month period of July 1 through September 30 
preceding the fee screen year for which the item or service was 
furnished. Section 13541 of OBRA 93 requires that in determining the 
amount of Part B payment for parenteral and enteral nutrients, supplies 
and equipment during 1994 and 1995, the charges determined to be 
reasonable with respect to these items may not exceed the charges 
determined to be reasonable for them during 1993.

B. Regulation Revision

    As our payment regulations do not specifically address payments for 
parenteral and enteral nutrients, supplies and equipment, we do not 
need to revise our regulations to implement this provision of OBRA 93 
but will make any necessary changes in our program manuals.

IX. Increase in Annual Cap on Amount of Medicare Payment for 
Outpatient Physical Therapy and Occupational Therapy Services

A. Legislative Provision

    Section 1833(g) of the Act limits the amount payable annually for 
covered outpatient physical and occupational therapy services provided 
by independently practicing physical and occupational therapists. 
Section 6133(a) of the Omnibus Budget Reconciliation of 1989 (OBRA 89) 
(Pub. L. 101-239) amended section 1833(g) of the Act to increase the 
maximum amount of incurred expenses that can be recognized for payment 
purposes from $500 to $750, for services furnished on or after January 
1, 1990, and section 13555 of OBRA 93 amended section 1833(g) of the 
Act to increase the maximum amount of incurred expenses that can be 
recognized for payment purposes from $750 to $900, effective for 
services furnished on or after January 1, 1994.

B. Regulations Revisions

    We are revising paragraph (c)(2) of 42 CFR 410.60, Outpatient 
physical therapy services: Conditions, to show the various caps since 
before 1982 through 1994 for physical therapy services furnished by 
independent physical therapists. There is currently no corresponding 
regulation section for occupational therapy but we will include the 
$900 cap when we publish final regulations on those services.

X. Rural Health Clinics and Federally Qualified Health Centers

A. Legislative Provision

    Under section 1861(aa) of the Act, Medicare pays for services 
furnished in certain qualified health centers that are known as 
Federally qualified health centers (FQHCs). Each center is: An entity 
that is receiving a grant under section 329, 330, or 340 of the Public 
Health Service Act or is under contract with the recipient of a grant 
under section 329, 330, or 340 of the Public Health Service Act and 
meets the requirements for receiving such a grant; or is determined, 
based on the recommendations of the Health Resources and Services 
Administration within the Public Health Service, to meet the 
requirements for meeting such a grant; or was treated by the Secretary 
as a comprehensive Federally funded health center as of January 1, 
1990. Section 13556 of OBRA 93 amended section 1861(aa)(4) of the Act 
to include as FQHCs outpatient programs and facilities operated by 
Indian tribes or tribal organizations under the Indian Self-
Determination Act (25 U.S.C. 450). The amendment took effect as if 
included in the enactment of section 4161(a)(2)(C) of OBRA 90, which 
was effective October 1, 1991. Section 13556 of OBRA 93 also provides 
that an outpatient health program or facility operated by an urban 
Indian organization receiving funds under Title V of the Indian Health 
Care Improvement Act (25 U.S.C. 1601ff) is included in the Medicare 
program, effective October 1, 1991.

B. Regulations Revision

    We are adding a new paragraph to the definition of Federally 
qualified health centers in Sec. 405.2401(b) to include outpatient 
health programs and facilities operated by Indian tribes under the 
Indian Self-Determination Act or by urban Indian organizations under 
title V of the Indian Health Care Improvement Act.

XI. Reduction in Payments for Epoetin

A. Legislation

    Medicare is the principle purchaser of epoetin (EPO), an anti-
anemia drug used by dialysis patients with a specified level of anemia. 
Section 1881(b)(11)(B) of the Act provides that payments to ESRD 
facilities are made based on increments of 1,000 unit doses, rounded to 
the nearest 100 units, with a maximum payment of $11 per 1,000 units. 
Under section 1861(s)(2)(P) of the Act, Medicare considers as a medical 
or other health service EPO for home dialysis patients competent to use 
the drug in the home without medical or other supervision, subject to 
methods and standards established by the Secretary by regulation for 
the safe and effective use of the drug, and items related to the use of 
the drug.
    Section 13566 of OBRA 93 decreased the maximum payment for EPO to 
$10 per 1,000 units. OBRA 93 also amended section 1861(s)(2)(P) to 
remove the word ``home'' from ``home dialysis patients'', the effect of 
which is to allow coverage of EPO when used at home by dialysis 
patients who do not dialyze at home. The effective date of section 
13566 of OBRA is January 1, 1994.

B. Regulations Revision

    The change in payment rate requires no revision to regulations 
because we announce the rate in a notice published in the Federal 
Register rather than in regulations. To implement the provision 
allowing dialysis patients who do not dialyze at home to use EPO in the 
home, we are revising Secs. 405.2137, 405.2163, 410.10(k), and 410.52 
to show the effective dates of the various sections for use of EPO at 
home by patients who do not dialyze at home.

XII. Part B Premium

A. Legislative Provision

    Section 1839(e) of the Act establishes the amount of the Medicare 
Part B premium at 50 percent of the monthly actuarial rate for 
enrollees age 65 and over for months in calendar years 1984 through 
1990; section 4301 of the Omnibus Budget Reconciliation Act of 1990 
added specific premiums for 1991 through 1995 based on Congressional 
Budget Office estimates, at the time, of premium amounts that would 
equal 50 percent of that actuarial rate. Section 13571 of OBRA 93 
amended section 1839(e) of the Act to again have the premium determined 
annually so that it equals 50 percent of the monthly actuarial rate for 
enrollees age 65 and over for calendar years 1996, 1997 and 1998.

B. Regulations Revisions

    To reflect OBRA 90 and 93 we are revising 42 CFR 408.20, Monthly 
premiums, by adding calendar years 1991 through 1995, and calendar 
years after 1998, to the heading and content of paragraph (b), which 
currently contains the methodology for the period July 1976 through 
December 1983 and the periods after 1990. We are specifying that the 
rates cited in section 1839(e)(1)(B) of the Act apply to 1991 through 
1995. To reflect OBRA 93, we are adding calendar years 1996 through 
1998 to the heading and content of paragraph (c), which currently 
discusses the methodology for determining premiums for calendar years 
1984 through 1990.

XIII. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking for a 
regulation in the Federal Register and provide a period for public 
comment. However, we may waive that procedure if we find good cause 
that prior notice and comment are impracticable, unnecessary, or 
contrary to the public interest.
    As noted earlier, this rule updates our rules to properly reflect 
explicit statutory requirements that are clear on their face and that 
we are not interpreting in any way beyond their commonly understood 
meanings. Without these changes, certain regulation requirements are in 
conflict with the statute, possibly misleading those who rely on our 
regulations. In addition, some of the statutory changes included in 
these regulations have been enacted with retroactive effective dates or 
effective dates close to the date of enactment of OBRA 93. Under these 
circumstances, prompt publication of the correct up-to-date rules best 
serves those governed by these regulations. Because this rule does not 
create any legal requirements and because publishing a notice of 
proposed rulemaking here would perpetuate conflicts between clear 
statutory directives and our regulations, we find that publishing a 
notice of proposed rulemaking before issuing this final rule would be 
unnecessary and contrary to the public interest. However, we are 
providing a 60-day comment period for public comments on the final rule 
as indicated at the beginning of this rule.

XIV. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on FR documents published for comment, we are not able to 
acknowledge or respond to them individually. We will consider all 
comments we receive by the date and time specified in the DATES section 
of this preamble, and, if we proceed with a subsequent document, we 
will respond to the comments in the preamble to that document.

XV. Regulatory Impact Statement

    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 a final rule will not 
have a significant economic impact on a substantial number of small 
entities. For purposes of the RFA, all Medicare-participating 
facilities are considered to be small entities. Individuals and States 
are not included in the definition of small entity.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis if a final rule will have a significant 
impact on the operations of a substantial number of small rural 
hospitals. This analysis must conform to the provisions of section 604 
of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 50 beds.
    This final rule with comment period updates our regulations to 
incorporate numerous self-implementing statutory provisions that are 
not interrelated. None of the regulations interprets or extends 
requirements beyond those included in the self-implementing 
legislation.
    The amendments to which this rule pertains are already in effect or 
will go into effect independent of the publication of this rule. 
Consequently, there are no actions to be taken that would flow from 
further analyses of the impact of these provisions on entities. 
Therefore, we are not preparing analyses for either the RFA or section 
1102(b) of the Act since we have determined, and the Secretary 
certifies, that this proposed rule would not result in a significant 
economic impact on a substantial number of small entities and would not 
have a significant economic impact on the operations of a substantial 
number of small rural hospitals.
    In accordance with the provisions of E.O. 12866, this final rule 
with comment period was not reviewed by the Office of Management and 
Budget.

XVI. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping 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 et seq.).

List of Subjects

42 CFR Part 405

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medicare, Reporting and recordkeeping 
requirements, Rural areas, X-rays.

42 CFR Part 406

    Health facilities, Kidney diseases, Medicare.

42 CFR Part 408

    Medicare.

42 CFR Part 410

    Health facilities, Health professions, Kidney diseases, 
Laboratories, Medicare, Rural areas, X-rays.

42 CFR Part 413

    Health facilities, Kidney diseases, Medicare, Puerto Rico, 
Reporting and recordkeeping requirements.

42 CFR Part 418

    Health facilities, Hospice care, Medicare, Reporting and 
recordkeeping requirements.

    42 CFR chapter IV is amended as follows:
    A. Part 405 is amended as follows:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

    1. Part 405, subpart U is amended to read as follows:

Subpart U--Conditions for Coverage of Suppliers of End-Stage Renal 
Disease (ESRD) Services

    a. The authority citation for part 405, subpart U continues to read 
as follow:

    Authority: Secs. 1102, 1861, 1862(a), 1871, 1874, and 1881 of 
the Social Security Act (42 U.S.C. 1302, 1395x, 1395y(a), 1395hh, 
1395kk, and 1395rr), unless otherwise noted.

    b. In Sec. 405.2137, the introductory statement of paragraph (b)(7) 
is revised to read as follows:


Sec. 405.2137  Condition: Patient long-term program and patient care 
plan.

* * * * *
    (b) Standard: Patient care plan. * * *
    (7) Beginning July 1, 1991, for a home dialysis patient, and 
beginning January 1, 1994, for any dialysis patient, who uses EPO in 
the home, the plan must provide for monitoring home use of EPO that 
includes the following:
* * * * *
    c. In Sec. 405.2163, introductory paragraphs (g) and (g)(2) are 
republished and paragraph (g)(2)(i) is revised to read as follows:


Sec. 405.2163  Condition: Minimal service requirements for a renal 
dialysis facility or renal dialysis center.

* * * * *
    (g) Use of EPO at home: Patient selection. The dialysis facility, 
or the physician responsible for all dialysis-related services 
furnished to the patient, must make a comprehensive assessment that 
includes the following:
* * * * *
    (2) Conditions the patient must meet. The assessment must find that 
the patient meets the following conditions:
    (i) On or after July 1, 1991, is a home dialysis patient or, on or 
after January 1, 1994, is a dialysis patient;
* * * * *
    2. Part 405, subpart X is amended as follows:

Subpart X--Rural Health Clinic and Federally Qualified Health 
Center Services

    a. The authority citation for subpart X is revised to read as 
follows:

    Authority: Sec. 1102, 1833, 1861(aa), 1871 of the Social 
Security Act; 42 U.S.C. 1302, 13951, 1395x(aa), and 1395hh.

    b. In the definition of ``Federally qualified health center'' in 
Sec. 405.2401(b), the introductory paragraph, and paragraphs (2) and 
(3) are revised and a new paragraph (4) is added to read as follows:


Sec. 405.2401  Scope and definitions.

* * * * *
    Federally qualified health center (FQHC) means an entity that has 
entered into an agreement with HCFA to meet Medicare program 
requirements under Secs. 405.2434 and--
* * * * *
    (2) Based on the recommendation of the PHS, is determined by HCFA 
to meet the requirements for receiving such a grant;
    (3) Was treated by HCFA, for purposes of part B, as a comprehensive 
federally funded health center (FFHC) as of January 1, 1990; or
    (4) Is an outpatient health program or facility operated by a tribe 
or tribal organizations under the Indian Self-Determination Act or by 
an Urban Indian organization receiving funds under title V of the 
Indian Health Care Improvement Act.
    B. Part 406 is amended as follows:

PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT

    1. The authority citation for part 406 is revised to read as 
follows:

    Authority: Secs. 202(t), 202(u) 226, 226A, 1102, 1818 and 1871 
of the Social Security Act (42 U.S.C. 402(t), 402(u), 426, 426-1, 
1302, 1395i-2, and 1395hh) and sec. 3103 of Pub. L. 89-97 (42 U.S.C. 
426a), unless otherwise noted.

    2. In Sec. 406.32, paragraph (b)(3) is redesignated as (b)(4) and 
paragraphs (c) through (f) are redesignated as paragraphs (d) through 
(g), respectively. New paragraphs (b)(3) and (c) are added and 
redesignated paragraph (b)(4) is revised to read as follows:


Sec. 406.32  Monthly premiums.

* * * * *
    (b) Monthly premiums: Determination of dollar amount.
* * * * *
    (3) Effective for months beginning January 1994, if an individual 
meets the requirements in paragraph (c) of this section, the monthly 
premium determined under paragraph (b)(1) of this section is reduced in 
each month in which the individual meets the requirements by 25 percent 
in 1994, 30 percent in 1995, 35 percent in 1996, 40 percent in 1997 and 
45 percent in 1998 and thereafter.
    (4) The amount determined under paragraphs (b) (1), (2), or (3) of 
this section is rounded to the next nearest multiple of $1. (Fifty 
cents is rounded to the next higher dollar.)
    (c) Qualifying for a reduction in monthly premium. An individual 
who qualifies for the reduction described in paragraph (b)(3) of this 
section must be an individual who--
    (1) Has 30 or more quarters of coverage (QCs) as defined in 20 CFR 
404.140 through 404.146;
    (2) Has been married for at least the previous one year period to a 
worker who has 30 or more QCs;
    (3) Had been married to a worker who had 30 or more QCs for a 
period of at least one year before the death of the worker;
    (4) Is divorced from, after at least 10 years of marriage to, a 
worker who had 30 or more QCs at the time the divorce became final; or
    (5) Is divorced from, after at least 10 years of marriage to, a 
worker who subsequently died and who had 30 or more QCs at the time the 
divorce became final.
* * * * *
    C. Part 408 is amended as follows:

PART 408--PREMIUMS FOR SUPPLEMENTARY MEDICAL INSURANCE

    1. The authority citation for part 408 continues to read as 
follows:

    Authority: Secs. 1102, 1818, 1837-1840, 1843, 1871, and 1881(d) 
of the Social Security Act (42 U.S.C. 1302, 1395i-2, 1395p-1395s, 
1395v, 1395hh and 1395rr(d)) and the Federal Claims Collection Act 
(31 U.S.C. 3711).

    2. In Sec. 408.20, the headings of paragraphs (b) and (c), 
introductory paragraphs (b)(1) and (c), and paragraph (b)(2) are 
revised and new paragraph (b)(3) is added to read as follows:


Sec. 408.20  Monthly premiums.

* * * * *
    (b) Criteria and procedures for the period from July 1976 through 
December 1983, the period from January 1991 through December 1995, and 
for periods after December 1998. (1) For periods from July 1976 through 
December 1983 and after December 1998, the Secretary determines and 
promulgates as the standard monthly premium (for disabled as well as 
aged enrollees) the lower of the following:
* * * * *
    (2) For periods after December 1998, the Secretary determines the 
standard monthly premium in the manner specified in paragraph (b)(1) of 
this section, but promulgates it in September for the following 
calendar year.
    (3) The premiums for calendar years 1991 through 1995 are those 
amounts as specified by section 1839(e)(1)(B) of the Act as follows:
    (i) In 1991, $29.90;
    (ii) In 1992, $31.80;
    (iii) In 1993, $36.60;
    (iv) In 1994, $41.10; and
    (v) In 1995, $46.10.
    (c) Premiums for calendar years 1984 through 1990 and 1996 through 
1998. For calendar years 1984 through 1990 and 1996 through 1998, the 
standard monthly premium for all enrollees--
* * * * *
    D. Part 410 is amended as follows:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

    1. The authority citation for part 410 is revised to read as 
follows:

    Authority: Secs. 1102, 1832, 1833, 1834, 1835, 1861 (r), (s), 
(aa), (cc), and (mm), 1871 and 1881 of the Social Security Act (42 
U.S.C. 1302, 1395k, 1395l, 1395m, 1395n, 1395x (r), (s), (aa), (cc), 
and (mm), 1395hh, and 1395rr).

    2. In Sec. 410.10, the introductory paragraph is republished and 
paragraph (k) is revised to read as follows:


Sec. 410.10  Medical and other health services: Included services.

    Subject to the conditions and limitations specified in this 
subpart, ``medical and other health services'' includes the following 
services:
* * * * *
    (k) Home dialysis supplies and equipment; on or after July 1, 1991, 
epoetin (EPO) for home dialysis patients, and, on or after January 1, 
1994, for dialysis patients, competent to use the drug; self-care home 
dialysis support services; and institutional dialysis services and 
supplies.
* * * * *
    3. In Sec. 410.52(a), the introductory paragraph is republished and 
paragraph (a)(4) is revised to read as follows:


Sec. 410.52  Home dialysis services, supplies and equipment: Scope and 
conditions.

    (a) Medicare Part B pays for the following services, supplies, and 
equipment furnished to an ESRD patient in his or her home:
* * * * *
    (4) On or after July 1, 1991, epoetin (EPO) for use at home by a 
home dialysis patient and, on or after January 1, 1994, by a dialysis 
patient, if it has been determined, in accordance with Sec. 405.2163 of 
this chapter, that the patient is competent to use the drug safely and 
effectively.
* * * * *
    4. In Sec. 410.60, the heading of paragraph (c) is republished, 
paragraph (c)(2) is revised to read as follows and footnote 2 is 
deleted:


Sec. 410.60  Outpatient physical therapy services: Conditions.

* * * * *
    (c) Special provisions for services furnished by physical 
therapists in independent practice.
* * * * *
    (2) Limitation on incurred expenses. (i) Before 1982, not more than 
$100 of reasonable charges incurred in a calendar year are recognized 
as incurred expenses.
    (ii) From 1982 through 1989, not more than $500 of reasonable 
charges incurred in a calendar year are recognized as incurred 
expenses.
    (iii) From 1990 through 1993, not more than $750 of reasonable 
charges incurred in a calendar year are recognized as incurred 
expenses.
    (iv) After 1993, not more than $900 of reasonable charges incurred 
in a calendar year are recognized as incurred expenses.
    E. Part 413 is amended as follows:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES

    1. The authority citation for part 413 continues to read as 
follows:

    Authority: Secs. 1102, 1122, 1814(b), 1815, 1833(a), 1861(v), 
1871, 1881, 1883, and 1886 of the Social Security Act (42 U.S.C. 
1302, 1320a-1, 1395f(b), 1395g, 13951(a), 1395x(v), 1395hh, 1395rr, 
and 1395ww).

    2. Section 413.124(a) is revised to read as follows:


Sec. 413.124   Reduction to hospital outpatient operating costs.

    (a) Except for sole community hospitals, as defined in Sec. 412.92, 
and rural primary care hospitals, the reasonable costs of outpatient 
hospital services (other than capital-related costs of such services) 
are reduced by 5.8 percent for services rendered during portions of 
cost reporting periods occurring on or after October 1, 1990 and before 
October 1, 1998.
* * * * *
    3. In Sec. 413.130 the introductory paragraph of paragraph (j) is 
republished and paragraph (j)(l)(ii) is revised to read as follows:


Sec. 413.130   Introduction to capital-related costs.

* * * * *
    (j) Reduction to capital-related costs. (1) Except for sole 
community hospitals and rural primary care hospitals, the amount of 
capital-related costs of all hospital outpatient services is reduced 
by--
    (i) * * *
    (ii) 10 percent for portions of cost reporting periods occurring on 
or after October 1, 1991 through September 30, 1998.
* * * * *
    4. Section 413.157(b)(3) is revised to read as follows:


Sec. 413.157   Return on equity capital of proprietary providers.

* * * * *
    (b) General rule.
* * * * *
    (3) Rate of return related to proprietary SNFs. (i) For cost 
reporting periods beginning on or after October 1, 1985, the rate used 
in determining the return for SNF services furnished before October 1, 
1993 is a percentage equal to the average of the rates of interest 
described in paragraph (b)(1) of this section.
    (ii) There is no allowance for return for SNF services furnished on 
or after October 1, 1993.
    F. Part 418 is amended as follows:

PART 418--HOSPICE CARE

    1. The authority citation for part 418 is revised to read as 
follows:

    Authority: Secs. 1102, 1812(a)(4) and (d), 1813(a)(4), 
1814(a)(7) and (i), 1816(e)(5), 1861(dd) and 1871 of the Social 
Security Act (42 U.S.C. 1302, 1395d(a)(4) and (d), 1395e(a)(4), 
1395f(a)(7) and (i), 1395h(e)(5), 1395x(dd), and 1395hh); and sec. 
353 of the Public Health Service Act (42 U.S.C. 263a).

    2. In Sec. 418.306(b), the introductory language is republished, 
paragraph (b)(2) is revised and a new paragraph (b)(3) is added to read 
as follows:


Sec. 418.306   Determination of payment rates.

* * * * *
    (b) Payment rates. The payment rates for routine home care and 
other services included in hospice care are as follows:
* * * * *
    (2) Except for the period beginning October 21, 1990 through 
December 31, 1990, the payment rates for routine home care and other 
services included in hospice care for Federal fiscal years 1991, 1992, 
and 1993 and those that begin on or after October 1, 1997, are the 
payment rates in effect under this paragraph during the previous fiscal 
year increased by the market basket percentage increase as defined in 
section 1886(b)(3)(B)(iii) of the Act, otherwise applicable to 
discharges occurring in the fiscal year. The payment rates for the 
period beginning October 21, 1990 through December 31, 1990 are the 
same as those shown in paragraph (b)(1) of this section.
    (3) For Federal fiscal years 1994 through 1997, the payment rate is 
the payment rate in effect during the previous fiscal year increased by 
a factor equal to the market basket percentage increase minus--
    (i) 2 percentage points in FY 1994;
    (ii) 1.5 percentage points in FYs 1995 and 1996; and
    (iii) 0.5 percentage points in FY 1997.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: February 15, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.

    Dated: April 7, 1994.
Donna E. Shalala,
Secretary.
[FR Doc. 94-12461 Filed 5-24-94; 8:45 am]
BILLING CODE 4120-01-P